Department – an ‘anchor customer’ for Amazon’s public sector-wide OGVA deal – has added £40m to the worth of the new contract issued under the second iteration of the government discount scheme

The Department for Work and Pensions has signed a new three-year cloud deal with Amazon Web Services, worth almost £40m more than the contract it replaces.

In 2020, the department was an “anchor customer” for the One Government Value Agreement (OGVA) – a memorandum of understanding between AWS and the Crown Commercial Service. By effectively treating them as a single customer, the arrangement saw the cloud firm offer public sector clients baseline discounts of 18% on hosting services and various other benefits – in return for signing up to three-year contracts.

Hundreds of millions of pounds was spent via the arrangement, including the DWP’s previous deal with Amazon – valued at £57m – which came into effect concurrently with the OGVA, on 1 December 2020.

The department has also taken immediate advantage of the recently confirmed second iteration of the discount scheme: OGVA 2.

On 1 December 2023, the DWP signed another three-year deal for “hyperscale public cloud” services, according to a newly published procurement notice. The document reveals that the contract – which runs until 30 November 2026 – is worth £94.15m. This equates to more than £31m for each year of the contract and represents a rise of £37m over the lifetime of the engagement, when compared with its predecessor.

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When the original OGVA came into effect, the DWP was one of a number of departments that was already partway through an existing AWS deal – which it chose to replace with a new arrangement under the improved terms offered by the MoU, when compared with the vendor’s other discount schemes.

“In August 2019, DWP created a strategic, two-year… contract with AWS to future-proof hosting delivery and take advantage of new preferential commercial terms to improve value for money,” the department said, in commercial documents published in 2020. “The contract is currently not delivering best value for money and DWP looked to find a replacement with improved discounts, which has been developed through Cabinet Office’s One Government Value Agreement to which DWP signed up as an anchor customer.”

After the implementation of the first iteration of the OGVA, the Home Office and HM Revenue and Customs also replaced major incumbent AWS contracts that were only months into their intended term.

The Home Office has also acted swiftly to take advantage of OGVA 2, awarding a bumper £400m-plus deal to the public cloud provider.

It is not year clear whether the new version of the programme offers the same core discounts of 18-20% as its predecessor – as exclusively revealed by PublicTechnology.