IT systems procurement in government is no longer a back-office support function, but a critical requirement of modern state capacity. Traditional public procurement frameworks are ill-equipped for digital infrastructure. Rapid technological evolution creates an "incomplete contract" problem, rendering perfect ex-ante requirements impossible and leading to frequent change requests that trigger costly lifecycle disruptions. The continuous need for system iteration blurs the "make-or-buy" boundary, because robust internal technical expertise is needed even when development is outsourced. Building on three case-studies of public IT procurement in India, this article argues for a paradigm shift in how governments plan, procure, and maintain IT systems. It outlines an responsive framework centered on flexible contracting, early concept verification, expert-led dispute resolution, and strategic investments in state HR capabilities to successfully navigate the digital marketplace.

Better procurement for government IT systems: navigating the incomplete contract problem, Susan Thomas, Chapter in Public Finance in the Digital Era: Emerging Themes 2026, edited by Cathal Long and Ameya Naik, published by ODI Global, April 2026.