Department says it was necessary to skip competitive process and award contract – which includes early access to Microsoft products – directly to vendor

Credit: Niall Carson/PA Archive/Press Association Images

The Ministry of Defence has directly awarded to Microsoft a £20m deal for Azure cloud hosting that it claims is the first of its kind.

The MoD had previously concluded, via a competitive process, that Microsoft’s Azure technology was the best platform on which to base the “bespoke private cloud infrastructure” that it wishes to implement to serve its technology needs for the coming years.

The ministry said that, in doing so, it will become “the first and largest customer in the UK and Europe” to run Azure cloud services that are hosted from UK-based datacentres.

The project – dubbed Microsoft Unite – will require a range of implementation, support, and consultancy services that, the MoD said, only Microsoft itself would be equipped to deliver. 

Having concluded that a technology consultancy or Microsoft reseller partner would not be equipped to meet its needs, the MoD has awarded a 23-month support contract directly to the vendor – without a competitive tender process.

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The deal, which is worth £17.75m plus VAT, commences on 1 June and lasts until 30 April 2022.

The deal will see the MoD signed up to receive the Microsoft Premier support package, which the vendor claims can offer its largest customers “complete, end-to-end managed support across the full Microsoft platform”. 

The ministry will also benefit from the ability to take part in pilot programmes for all new Microsoft cloud services, and will be one of “only a handful of organisations around the world [to] get early access to products before they are released”.

“Having this early exposure gives the MOD the opportunity to influence and shape the products to suit our future defence needs; we will not get this access without a direct relationship with Microsoft,” the MoD said.

The ministry added that: “Without Microsoft direct support, the level of technical risk to MoD’s transition from existing monolithic contract arrangements would be too high to be appropriate for defence.”

Although the MoD believes it requires direct access to the “expertise in [Microsoft’s] US product groups” to mitigate these risks, it said that it will also work with “on-site SMEs – who provide the context of the often non-standard deployment of Microsoft technologies across defence”.

Office 365
The department has already moved core productivity applications to Microsoft’s Office 365 and, during that migration process, found that “regular and extensive access to the Microsoft product developers in the US – in liaison with security-cleared Microsoft consultants in the UK – was essential, considering the critical and complexity which MoD represents as a customer”.

For the switch to Azure cloud infrastructure, the ministry “mandates data sovereignty and reliability – and this non-negotiable requirement can only be supported by Microsoft for these services at this scale”. 

“The current requirements cannot be delivered without the direct access to Microsoft support,” the ministry said, in a newly published contract-award notice. “With the scale of the MoD’s Azure cloud exploitation, the level of expertise required will not be available if we contract with a third-party consultancy. Furthermore, we have the evidence that by having direct links to product developers, we have been able to solve issues with the service that are unique to MOD’s future requirements.”

It added: “One aspect of exploiting cloud services is the use of power applications which MoD has already invested in. At the same time, there are several key initiatives that only Microsoft have the knowledge breadth and skills depth to deliver the scope of work which includes the power platform applications capability.”

UPDATE: In response to this article, the MoD issued the following statement: “The contract we intend to award is predominantly for Microsoft Unified support which can only be sourced via Microsoft and is not delivered by a partner or any other third-party globally. There is only a very limited provision of support within the proposed contract for our existing Azure environment which can only be sourced from Microsoft”.