The Crown Commercial Service (CCS) has recently come under scrutiny for its decision to increase its cloud hosting spend with Amazon Web Services (AWS) by 89% midway through a contract, raising concerns about potential breaches in procurement regulations. The core of the controversy lies in whether CCS failed to adhere to procurement regulations by not re-tendering a contract with AWS, which saw a substantial rise in its value after just 15 months. Initially, CCS had established a £1.3 million, 36-month contract with AWS in February 2023 through the G-Cloud 13 framework. This contract aimed to manage the migration of workloads from the Government Digital Service’s (GDS) defunct Gov.uk platform-as-a-service (PaaS) to the AWS cloud. However, in May 2024, CCS issued a Change Control Notice (CCN) that increased the contract value to £2.5 million, representing an 89% rise. Such a significant increase has sparked questions about compliance with procurement regulations.
Concerns center on whether CCS’s actions adhere to the terms of Regulation 72 of the Public Contracts Regulations 2015 (PCR15). This regulation stipulates that contracts may be modified without initiating a new procurement procedure, provided the price increase does not exceed 50% of the original contract’s value. Given the 89% increase in the AWS contract valuation, there are questions about why CCS did not re-tender or introduce further competition once it became evident that the initial contract would be insufficient to cover project costs. The apparent discrepancy has led to a closer examination of CCS’s procurement decisions and practices.
Regulation 72 and Procurement Compliance
The heart of the procurement compliance issue lies in how CCS implemented Regulation 72, a critical piece of legislation within PCR15. While the regulation allows for modifications without a new procurement procedure, it explicitly restricts price increases to no more than 50% of the original contract’s value. An unnamed public sector IT procurement expert underscored that while the contract was indeed awarded under the G-Cloud 13 framework, governed by PCR15, the lack of a plausible justification for the contract value increase necessitates that CCS addresses the issue within the bounds of permissible procurement frameworks. Public procurement adviser Martin Medforth noted that while Regulation 72 does allow for incremental application of the 50% increase multiple times if needed, doing so all at once raises questions. However, it remains unclear from the CCN notice if CCS utilized this clause correctly.
With the controversy surrounding the CCS decision, the public sector IT procurement expert and Medforth’s concerns amplify the demand for transparency and adherence to regulatory frameworks. The sudden and substantial increase in the contract value without clear, robust justifications is at the core of the scrutiny. Transparency, fairness, and compliance are paramount in maintaining trust in public procurement processes, and thus, CCS’s actions are being looked at through this rigorous lens. The debates around the decision to forgo re-tendering or further competition once the inadequacy of the initial contract value became apparent further add to the complexity of the issue.
CCS’s Defense and Industry Reactions
In response to the criticisms, CCS has firmly defended its actions, affirming compliance with procurement legislation and assuring that all government contracts, including this one with AWS, were awarded fairly and transparently in adherence to the G-Cloud 13 framework. CCS’s defense centers on their claim of transparency and fairness throughout the contract awarding process. However, this stance has not quelled the growing concerns among industry experts and watchdogs. Nicky Stewart of the Open Cloud Coalition (OCC) emphasizes the importance of high-profile public bodies like CCS in demonstrating good practices when procuring cloud services. Stewart asserts that open and transparent procurement processes are crucial for allowing all potential providers, including smaller, challenger cloud entities, to have legitimate opportunities.
Further expert insight comes from Owen Sayers, an enterprise architect with extensive experience in national policing systems, who questions how CCS could have miscalculated the contract’s scope so significantly from the outset. Sayers indicates that a necessity to nearly double the initial £1.3 million contract only a third of the way through its timeline highlights serious oversight in the initial cost assessment and requirements understanding. This points to a broader issue of inadequate initial resource planning and due diligence, potentially leading to costly mid-contract adjustments.
The Call for Better Foresight and Transparency
The Crown Commercial Service (CCS) has been scrutinized for increasing its cloud hosting spending with Amazon Web Services (AWS) by 89% midway through a contract, raising questions about procurement regulation compliance. The controversy centers on whether CCS adhered to procurement regulations by not re-tendering a contract that significantly increased in value just 15 months in. Initially, in February 2023, CCS established a £1.3 million, 36-month contract with AWS through the G-Cloud 13 framework. This contract was intended to manage the migration from the Government Digital Service’s (GDS) defunct Gov.uk platform-as-a-service (PaaS) to AWS’s cloud.
However, in May 2024, CCS issued a Change Control Notice (CCN), increasing the contract value to £2.5 million—an 89% rise. This significant increase raised questions about adherence to procurement regulations. Specifically, concerns are about compliance with Regulation 72 of the Public Contracts Regulations 2015 (PCR15). This regulation allows contract modifications without a new procurement process provided the price increase does not exceed 50% of the original contract’s value. Given the 89% increase, questions arise as to why CCS did not re-tender or introduce more competition, prompting scrutiny of CCS’s procurement practices.
