Government IT procurement: how to avoid ‘vendor lock-in’ and other pitfalls?

The digitization of government is irreversible. From SaaS solutions and hardware purchases to the development of complex customized applications, ICT is crucial to modern public service delivery. Yet in Belgium, the rigid rules of public procurement legislation are often at odds with the fast-paced, flexible reality of the IT world.

The success of an ICT procurement depends on strategic choices you make beforehand. A wrong qualification, too tight a procedure or ignoring the risks of a ‘vendor lock-in’ can lead to budgetary dramas and a service that gets bogged down.

The placement phase: the strategic foundations

The choices you make when drafting the specifications and choosing the procedure will determine the entire subsequent course of the contract.

The basics: supply or service?

A seemingly simple question, but with major implications. Qualifying as a ‘supply’ or ‘service’ affects the applicable thresholds and procedural rules.

• Delivery: This applies to the purchase, rental or leasing of hardware. Importantly, the purchase of standard “off-the-shelf” software licenses (such as Adobe or Google licenses) is also considered a supply.
• Service: This includes custom software development (customization) and maintenance of software or hardware.

For mixed contracts (e.g. custom development with purchase of standard licenses), the item with the highest estimated value determines the main subject of the contract. Don't underestimate the value of standard licenses here; they can nevertheless legally tilt an assignment that feels like a ‘service’ into a ‘delivery’.

The right procedure: flexibility is key

Although open and restricted procedures remain the rule in traditional sectors, they are rarely ideal for complex ICT projects. These projects often require customization, coordination and therefore negotiation.

The competition procedure with negotiation is the appropriate procedure for this. The law allows this in specific cases that are common in IT, such as the need for innovative solutions or the complexity of the contract that requires negotiation. For large IT projects, this procedure is even explicitly recommended.

The biggest danger: The ‘vendor lock-in’

The most significant risk in ICT procurement is ‘vendor lock-in’.

What is vendor lock-in? You are ‘locked in’ to one specific supplier. This occurs when purchased systems operate with specific interfaces or protocols that are not compatible with other systems. Switching to a competitor thereby becomes technically impossible or involves disproportionately high switching costs.

The NPwPP trap There is a temptation, once locked in, to award follow-on contracts (such as maintenance or expansions) directly to the incumbent supplier through the negotiated procedure without prior publication (NPwPP), for perceived “technical reasons”.

However, this should be treated with great caution. Recent case law of the Court of Justice (9 Januaru 2025, c-578/23) clearly states that you cannot rely on this if you created the situation of exclusivity yourself. You must be able to prove that you did everything possible to avoid the lock-in at the time of the initial purchase AND that you had no reasonable economic means to break the exclusivity afterwards.

How to avoid a lock-in contractually? Prevention is key. You must address this risk as early as the initial specification:

1. Require open standards: Require the vendor to use standards, interfaces and protocols that are open and transparent so that other vendors can connect to them.
2. Arrange the ‘exit. Include a clause requiring the incumbent supplier to make all necessary data and information available to the successor at the end of the contract at no additional cost.
3. Share transition costs: You can even stipulate that any transfer costs be shared between you and the incumbent supplier.

Strategic choices at inception

Pricing: fixed price versus time & material The choice of pricing has a direct impact on budget and flexibility.

• Global price (fixed price): This provides budgetary certainty, since the risk for additional work is basically with the contractor. The downside is that bidders will price in this risk, leading to higher bids.
• Price list (time & material): Working with hourly rates offers a lot of flexibility to make adjustments during the project. The risk here, of course, is that the budget is used up faster than anticipated.

Duration: Longer than 4 years? In traditional sectors, the maximum contract term (including extensions) is limited to four years. For large ICT investments, this is often too short. The law allows exceptions, subject to a thorough justification. The Council of State has accepted, for example, that a longer period (e.g., 10 years) may be justified for accounting reasons, such as the necessary amortization period for software development investments.

The implementation phase: flexible management

Even after the contract is signed, flexibility is essential, but freedom is not unlimited.

Flexibility within the RD Execution

Especially with framework agreements, which are often used for IT services, the procurer enjoys great flexibility. For the ‘subcontracts’ placed under the framework agreement, one can deviate in the contract documents from many provisions of the Royal Decree Execution.

However, this freedom is not a blank check. A procurer who uses this flexibility to impose unreasonable conditions (e.g., unreasonably shortening a deadline for notice of default ) may be committing an abuse of law. Based on Article 5.73 of the Civil Code a judge may moderate such unreasonable clauses or hold them for non-written.

Realistic sanctions: tailored penalties

It is perfectly possible to provide special penalties in the specifications (or in a Service Level Agreement - SLA) for specific deficiencies. Consider penalties for not meeting a certain ‘uptime’ or response time.

However, these penalties must be reasonable and proportionate to the offense. Excessive penalties will inevitably lead to contestation. In this case, the contractor may request partial restitution of the penalty on the basis of Article 51 RD Execution if there is a disproportion between the penalty and the extent of the breach.

Tracking the market: changes and benchmarking

In the rapidly evolving ICT sector, it is crucial to be able to respond to changes. Article 38 of the RD Execution allows for contractual change clauses.

For long-term ICT contracts, it is highly recommended to work with a benchmarking clause. Such a clause allows contractually agreed prices to be compared with current market prices at fixed intervals. This mechanism provides an objective basis for adjusting prices to the reality of a sector where prices (both upward and downward) can fluctuate widely.

Conclusion: strategic purchasing is a necessity

Public contracts for ICT are complex, expensive and vital to your operations. Belgian legislation does offer the necessary flexibility in terms of procedures, duration and execution, but it requires an active and strategic approach on the part of the contracting authority. By focusing from the outset on the right procedure, realistic pricing models and, above all, the contractual countering of vendor lock-in, you lay the foundation for a successful and future-proof ICT project.