Public Services > Central Government

CCS may be set to review G-Cloud’s standard two-year contract length

David Bicknell Published 05 October 2016

CCS seems minded to respond positively to the MoD and some vendors over a rethink over the duration of framework contracts, including, but “not necessarily restricted to” G-Cloud

 

The Crown Commercial Service (CCS) appears ready to reconsider the standard contract terms for G-Cloud, including the two-year contract length.

That could mean a move to a standard three-year contract were there to be sufficient desire and a compelling case for change from both buyers and suppliers.

It is understood that as part of CCS and the Government Digital Services (GDS) user research for G-Cloud 9,  CCS will be reviewing all terms and conditions, including the current contract lengths.

The move comes as the Ministry of Defence (MoD) has been making its own case for an alternative contract length.

At the recent Defence Information Symposium, a session included discussions as to whether there was a case for a longer standard contract length, not only for G-Cloud but also other frameworks.

An MoD spokesperson told Government Computing , “The MoD aims to increase ICT spend through Government Frameworks from 20% to around 45% for standardised ICT goods and services.  This will allow us to acquire standardised, cross-government ICT in a more agile and cost effective way. Defence as a Platform (Future) - DaaP(F) - is a prime example of this approach.  

“There are certain complex ICT goods and services specific to Defence. We will continue to employ a variety of contractual approaches for their procurement, depending on individual requirements.

“The MOD is in discussion with CCS about framework contracts generally. One issue under consideration is the duration of upcoming framework contracts, but these discussions are not necessarily restricted to G-Cloud.”

It is understood that after reviewing all its terms and conditions, including contract lengths, CCS would be willing to set up sessions with the MoD if it would like to engage in more detailed discussions.

CCS has pointed out that in terms of the standard, two-year contract terms, it was based on the original GDS design principles in getting customers to break away from large, SI type, contract lock-ins. But it is understood that CCS is willing to consider whether a changed government procurement landscape might now provide sufficient impetus for a change in standard contract length.

Recent discussions held within techUK’s influence have, it is understood, not provided any clear-cut drive yet for a change in standard contract length. But some procurement specialists do have strong opinions advocating a move towards a three-year contract.

One, who has a detailed knowledge of government frameworks, recently suggested, “My personal thoughts are that three years makes a lot of sense.  The current two-year contract isn’t really long enough for those applications that have moved across into the cloud but are fairly complex and need a fair investment of time to implement and bed down.

“This means the organisation has less than two years’ effective use of the application, before having to go through the procurement process again. Although the catalogue streamlines this process, there is still the requirement to run an informal market assessment to demonstrate value for money, instead of just extending the contract. And the supplier also has to spend time and money to hold on to the customer.

It is understood some vendors are now choosing to put their solutions on the catalogue associated with RM1059, Local Authority Software Applications (LASA), if they can fit into the rather constricting lot descriptions, because it has contract maximum period of 5 +2 years.

John Glover, sales and marketing director of Kahootz, which has contracts with the MoD and the Department of Health said, “The practical issues with regard to managing transition arrangements is not really catered for at the moment and this is where the introduction of +1 yr contract extension could be a useful option to help avoid premature service wind-down and ensure the value of the initial 2-year term is maximised by both parties.

He added, “The published advice on renewals seems straight-forward enough. It actually mirrors what I've been told in that contract renewal could be a relatively simple desk study if material change is not required. It should however include advice on the use of MEAT principles to factor in transition and disruption costs to any new service.

“We need to make the buyer/user feel more empowered with regard to being able to rely on a service and to manage any transition arrangements to another service via a contract extension.”

One procurement specialist working in local government offered a nuanced view that reflects the impact G-Cloud has had on the public sector procurement landscape.

“G-Cloud’s changing the expectation about contract term has been an important part of the shift towards deals that are more-focused and better value. There might be a case for rather longer G-Cloud contracts for applications, but it’s important not to dilute the G-Cloud ethos and for really major applications with significant cost of change we’d look to frameworks like LASA,” he said.

“The longer-term aspiration has to be to make applications easier to change: that requires making authentication, data structures and so on less proprietary, and the next G-Cloud iteration could perhaps further promote apps that are easier to integrate and swap out.”








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