Crown Hosting given £500m four-year extension as CCS says risk to national infrastructure prevents competitive process

Flagship co-location deal given extra 48 months as CCS says reliance on services has exceeded expectations

Crown Commercial Service has cited the risk of disruption to critical national infrastructure as the primary reason why it bypassed the usual competitive processes to sign a £500m four-year extension to the Crown Hosting Services framework.

CCS will retain the services of Crown Hosting Data Centres (CHDC) Limited for a further 48-month period, beginning on 16 March 2019 – the day after the current deal expires. 

The contract to provide the public sector with datacentre co-location services was awarded without any form of competition. CCS claims this decision was not in contravention of EU or UK law, and was taken as the procurement agency found itself in a position that “was more than simply a complex or difficult situation where it would be convenient to remain with the incumbent”.

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The contract award notice said: “A decision has been reached that, due to the level of critical national infrastructure (CNI) which has been moved into the CHDC datacentre facilities, and the requirement to take the approach which maximises risk reduction when the contract involves CNI, it is technically necessary to enter into an extension of the framework agreement. It would not be sensible or without risk to the disruption of CNI to risk having to move incumbents to a new solution in the next few years. It had not been appreciated the level of CNI that would rely on this solution when the framework was set up.”

The notice added: “In making the decision, we also recognised the need for current customers to have the ability to bring on board other wider areas of their business to connect and operate with. These wider customers would need to have the ability to individually contract within the framework agreement. If new customers were unable to utilise the framework, this would cause significant inconvenience and a substantial duplication of costs for customers having to pause their transformation and seek impractical solutions.”

As with the incumbent deal, public-sector organisations can use the new Crown Hosting Services framework to procure co-location services on contracts of between one month and five years in length – plus a further two optional one-year extensions. 

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Under the terms of the new deal, Crown Hosting Data Centres will provide “datacentre space and the related services – energy, cooling, connectivity and physical security – necessary to house and provide an operating environment for physical computing infrastructure… from at least two separate locations”. 

This will mean that Crown Hosting Data Centres must open one new datacentre location by mid-2019, with another expected by the end of 2020, the contract notice said. These two new facilities must have respective capacities of 15 and 20 megawatts.

The locations must all constitute “readily available secure campus environments” that are assured by a range of government bodies and agencies, including the Centre for the Protection of National Infrastructure and the National Cyber Security Centre. CHDC will be expected to offer “fully enabled communication networks readily available onsite, enabling provision from multiple carriers”. Facilities must also demonstrate a minimum level of power-usage effectiveness.

Extending the existing joint venture was the only option for delivering all this without any risk of a break in service provision, according to CCS.

The contract notice said: “Any operator must, for the sake of the country’s CNI, have the capability and capacity from the ‘word go’ to provide the expected services seamlessly without increased risk to the customers; it cannot be a phased ramp of service capability and therefore, for technical reasons, it is not possible to run a competitive process.”

CHDC was established in 2015 as a joint venture between the government and UK hosting firm Ark Data Centres – with the latter holding 749 shares and the Cabinet Office possessing a minority stake of 251. Ark became the government’s partner of choice following a tender process launched in 2014.

The original framework, which went live in May 2015, came with an estimated worth of between £50m and £700m. The £500m value attached to the new four-year deal suggests that usage during the last 39 months has been towards the higher end of expectations.

“Any operator must, for the sake of the country’s critical national infrastructure, have the capability and capacity from the ‘word go’… for technical reasons, it is not possible to run a competitive process.”

The services provided by CHDC are designed to allow government departments and the wider public sector to incrementally migrate away from legacy infrastructure in a way that allows them to “pivot” towards the cloud. Crown Hosting Services went live with three customers already on board – the Department for Work and Pensions, the Highways Agency, and the Home Office – and many more have joined since.

Speaking to PublicTechnology earlier this year, CHDC chief executive Steve Hall claimed that customers did not need to be worried about the impending March 2019 conclusion of the initial framework.

“It is not a cause for concern for them,” he said. “They can buy off the framework, or extend their engagement, right up to its last day – and that could give them seven years extra. That is plenty of time to sort out their transformation for the cloud world.”

Hall identified making greater inroads into the police and NHS markets as his biggest priorities for the final year of the Crown Hosting Services deal.

Sam Trendall

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