Massive dependency: Switzerland rents Microsoft software without tendering

The Swiss Federal Office for Buildings and Logistics (BBL) is paying Microsoft up to 165 million euros for temporary software licenses. There was no invitation to tender, so the authority did not give other software providers a chance.

The contract for Microsoft's office software such as the MS 365 office package, including updates and support, was awarded shortly before Christmas as a "direct award", i.e. without the tendering process actually required for procurements of this scope. The extended "Enterprise Agreement", from which the federal authorities can draw, runs from the beginning of 2025 to the end of 2027.

The basic order for these three years amounts to just under 93 million euros. A further 58 million euros are marked as an "option". In its award decision published on the Simap platform, the FOBL justifies the contract awarded to Microsoft without competition by stating that the service purchase is "still absolutely necessary": "Due to interoperability and compatibility requirements, the deep integration into the existing system landscape and the multi-layered dependencies in the specialist applications, there is currently no alternative that could ensure seamless operation in line with requirements."

On January 9, the BBL also purchased additional support services from Microsoft for 13.2 million Swiss francs (equivalent to 14 million euros). The authority did not consider a tender to be necessary for this contract either. For technical and legal reasons, only Microsoft is currently able to provide the necessary "Unified Enterprise Support" . According to Inside TI magazine, the costs are "at the upper end" of the usual price range. In view of the 43,000 employees in the federal administration, a better price would have been possible.

Taxpayers feel ripped off

The deals are causing criticism. "What a fat Christmas present from us taxpayers," complained Matthias Stürmer, Bernese professor of administrative digitization, on Microsoft's social media portal Linkedin. "All without a tender, of course, without competition, out of pure dependency." The Federal Administration is being controlled by others, complains National Councillor Gerhard Andrey from the Green Party to the newspaper Blick. There are now very good alternatives in the office sector, including from Switzerland. The federal government should at least rely on free software for the planned Swiss Government Cloud.

In 2009, open source providers attempted to lodge an appeal with the Federal Administrative Court against another private contract with Microsoft worth CHF 42 million. However, the court did not recognize their right to appeal, meaning that no substantive decision was reached. In Germany, too, the costs for Microsoft licenses for the federal government in 2023 remained high at 197.7 million euros. In a 2019 study, auditors referred to "pain points in the federal administration" due to its dependence on Microsoft.

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