Dear oh dear! You poor fools! Some years ago I was a manager of a division of a company that did IT outsourcing, let me tell you how it works.....
1. Governments are afraid of (a) Staff numbers and (b) Public debt.
2. We find a department of government that has its own computers and support staff. We decide to target them. We do some research, then we tell the Sun. Headlines start appearing "Government spends billions on computer systems that don't work!", "Lazy public servants play computer games all day". You know the drill.
3. Our glossy brochures on outsourcing miraculously turn up. It doesn't take much for the Minister to realise that this problem will go away if he out sources it because the costs will be hidden in current expenditure overheads.
4. The Minister directs that a request for tender be written and issued. This takes at least a year, by which time the IT requirements have changed.
5. The IT industry responds with a quotation. This takes a year to write and often consists of Three volumes.
6. The tender Board evaluates and awards the tender after another year of deliberation.
7. We now have a contract to provide what the Department thought it wanted Three years ago. We hire the Departments best IT staff and fire the rest. The Minister is happy. The head count is down.
8. Now the fun really starts. Since we are a lying pack of weasels that would sell our own grandmothers, we compare what the Departments wants now with what was specified in the contract then. Needless to say, we find "discrepancies", always in our favour. Want an iPhone App? Sure! Must have! Twenty million. Need a new fax machine? We are your sole supplier, Three thousand quid.
9. Now the miracle happens, and this is very important..
About nine months into this contract, a keen accountant realises that we, the contractor, are lying rotten dirty thieving weasels who would sell their grandmothers He tells the press, and they ask us to confirm that we charged Twenty million for a Two bob iPhone App, and Three thousand for a Two hundred quid fax machine.........
So we say "Sure we did, but don't blame us, blame the Government for writing the contract and awarding it to us!
..And the media lambast the government, and the howling mob of taxpayers chase the Minister down the street.
Meanwhile us rich dirty rotten weasels are trying to leverage our Twenty million dollar iPhone application into a Thirty million dollar iPad application "upgrade".....
To put it another way, if you paid Twenty Two quid for a light bulb, somebody, somewhere wrote you out an invoice for Twenty Two quid and presented it to you with a straight face.
To put it yet another way, don't ever outsource anything that is not a bog standard item or service that there is already a thriving market for with multiple sources of supply.
Take office cleaning. Now try and price office cleaning with security cleared cleaners. My guess that the price would multiply by Ten. It is exactly the same as putting the word "Organic" or "Aviation" in front of the name of a simple household product. The price immediately doubles.