Contract offers 11% discount under vendor’s Volume Commitment Programme
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The Government Digital Service has signed a two-year hosting contract with Amazon Web Services.
The deal, which came into effect on 1 July, will be worth £12m to the cloud provider. It follows on directly from a one-year £6.6m contract that expired on 30 June – which itself succeeded another 12-month engagement worth £3.35m.
The new contract is signed under the terms of Amazon’s UK Volume Commitment Programme (UKVCP), which offers incrementally larger discounts to customers that sign a two-year contract with a commitment to a certain level of spending equivalent to at least about £3m per year.
The contract indicates that GDS will receive the entry-tier 11% discount “in consideration of an upfront UKVCP payment each year for a two-year term”.
The upfront payment and discount applies to hosting services, although any professional services added during the term of the contract are also eligible for the same level of discount.
The decision to sign the deal under the terms of the UKVCP scheme means that GDS is not eligible to take advantage of the public sector-wide One Government Value Agreement. Signed last year, the OGVA offers customers signing a three-year deal with AWS a discount of 18% on hosting services – plus an additional 2% saving for customers that pay upfront. Buyers can obtain a 15% discount on the cloud firm’s professional services.
Since the agreement came into effect, deals cumulatively worth more than £300m have been signed with a range of public-sector customers, including a £120m contract with the Home Office, a £94m engagement with HM Revenue and Customers, and a Department for Work and Pensions deal worth £57m.
The new GDS contract, the main objective of which is to provide the agency with a “flexible hosting environment for digital products”, covers two primary areas of service provision: cloud hosting; and enterprise support.
Additionally, AWS may be called upon to provide any of a range of more than 200 “associated services” across the three lots of the G-Cloud 12 framework through which the deal is awarded: Cloud Hosting; Cloud Software; and Cloud Support.
Meanwhile, other newly published procurement documents reveal that the Driver and Vehicle Standards Agency earlier this year joined took advantage of the OGVA and signed a three-year deal with AWS worth an estimated £7.7m.
The contract came into effect on 1 February and lasts until 31 January 2024.