Public Services > Central Government

G-Cloud 9 to offer revised contract length flexibility

Neil Merrett Published 07 March 2017

Revised framework allows call-off contracts to be extended beyond two years for first time, although concerns are raised that conditional nature of option creates additional complexity for stakeholders


Applications for G-Cloud 9 have been opened up to suppliers today, presenting both a revised lot structure and allowance for contract extensions beyond the maximum two year limit associated with the framework – albeit under certain restrictions for Whitehall bodies.

The Government Digital Service (GDS) has announced it was now taking applications for the latest iteration of the agreement, which is expected to go live by May of this year as part of plans to introduce broader overhauls to the framework.

Rather than a blanket extension, one major supplier has argued that the conditional terms for central government buyers to undertake two annual extensions beyond the two year maximum contract length will create additional complexities for framework users.

According to the contract documentation for G-Cloud 9, any call off deals from the agreement will continue to carry a maximum two year length, but with the option for two additional twelve months extensions under certain conditions that will apply exclusively for central government organisations.

The documents stipulate that in accordance with Whitehall spend controls, central government bodies wishing to extend beyond the initial two year contract length must obtain prior approval from GDS and demonstrate they will be transferring services to a replacement supplier during the extension period.

Other requirements include ensuring that there is no vendor lock-in to the existing supplier by the time of exiting the arrangement, as well as guaranteeing there is no impact on service continuity.  Any exit from the extended contact must also “be commercially reasonable and acceptable to the buyer.”

Nicky Stewart, commercial director for supplier UKCloud, described the amendment as a “tiny step in the right direction” to reform public sector cloud service procurement.  Yet Stewart said the changes fell short of broadening up contract length for more flexible agreements as some suppliers have called for. 

“The incremental 12 month extensions only apply for the purpose of buyers migrating away from a service,” she said. 

Stewart noted that in the case of central government, the requirements to obtain GDS spend control approval, display a need for a buyer to give itself the right to extend an agreement at the contract award process and also have suppliers setting out advance exit plans, would serve to restrict options for stakeholders.

“None of us support lock-in, but when termination for no cause is already baked into G-Cloud contracts, I do struggle to understand why – for example - a three year term wouldn’t be acceptable,” she said.

Stewart said that the third lot of the Technology Services 2 agreement, for example, offered a commoditised service option that allowed for a maximum five year contract term.

A security consultant with experience of the framework said that the contract extension had been a feature that some local government organisations had been asking for, which demonstrated that GDS has been listening to buyer needs in its planning.

However, the same individual argued that there were concerns that the changes could serve as a blocker for other organisations from using the framework, as well as a possible risk of misuse by some stakeholders.

“Other new elements in G–Cloud include the exclusion of Contractor Agencies or contingency labour, which has been explicitly barred, as well as the exclusion of Cyber Security Consultancy (as there is now a separate framework for that),” said the consultant.

“ Personally, I was surprised at the omission of the requirement for Cyber Essentials on Suppliers.”

Another stakeholder involved in the G-Cloud process said the revised option for a '2+1+1 year' contract period was a good development, having previously had to use the Local Authority Software Application catalogue in place of the framework to get around the two year restriction.

The same source argued that other changes to contract terms were not critical, although the previously announced decision to categorise services within three, as opposed to four lots, represented a significant change.

These three lots are defined as:

  • Cloud Hosting
  • Cloud Software
  • Cloud Support

This new structure was designed to try and more clearly define the services being offered as part of ongoing reforms to the procurement framework.

G-Cloud, which is among a number of agreements hosted on the government’s Digital Marketplace platform, underwent an extended discovery phase last year designed to try and introduce more significant overhauls of how the public sector acquires commodity cloud services.

The resulting amendments include dropping a commitment to run two consecutive versions of G-Cloud at the same time, as has been previously the case.  It will also see an increase in the management charge rate to use the framework, which is being raised from 0.5% to 0.75%.

Despite welcoming CCS’ commitment to revise and reform G-Cloud’s functions for its ninth iteration, a number of stakeholders, particularly from the supplier community, have previously expressed hope for wider reaching changes to cloud procurement as a result of the ‘discovery process’ for the agreement. 

Some suppliers in particular had wished for more attention to be paid to issues such as the two year maximum contract length, local government uptake and whether off the shelf or even open source coding could provide a more effective platform than the Digital Marketplace.

Related articles:

G-Cloud 9 to launch with revised 3-lot structure

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

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