Wednesday, 22 May 2013

Is CloudStore entirely legal?

Hosting GOV.UK in the cloud to cost GDS record-breaking £600,000

Government Digital Service signed a deal with Skyscape last month

By Derek du Preez | Computerworld UK | Published 10:29, 10 October 12

(GDS) infrastructure-as-a-service (IaaS) deal with Skyscape to host single domain website GOV.UK, which was procured through the G-Cloud, is worth an estimated £600,000.
There are rules for us members of the EU. Procurement rules. Procurement rules we have to abide by:
EC Procurement Thresholds
The European public contracts directive (2004/18/EC) applies to public authorities including, amongst others, government departments, local authorities and NHS Authorities and Trusts. The European utilities contracts directive (2004/17/EC) applies to certain utility companies operating in the Energy, Water, and Transport sectors.
Click on the link and you'll see that above certain threshold values, contracts can't be awarded without competition. They have to be announced – an onerous business – in OJEU, the Official Journal of the European Union, and all suppliers have to be able to bid. Please see also ERDF National Procurement Requirements – (ERDF-GN-1-004), a document issued jointly by the European Union and the Department for Communities and Local Government (p.2):
Robust and transparent procurement is required to ensure that Grant Recipients:
  • Consider value for money (VFM)
  • Maximise the efficient use of public money and;
  • Maintain competitiveness and fairness across the EU.
The above considerations should be applied on all occasions, regardless of whether or not the value of the procurement is above or below the OJEU thresholds and regardless of whether or not the Grant Recipient is a contracting authority subject to public procurement rules.
There are various thresholds:

PUBLIC CONTRACTS REGULATIONS 2006 - FROM 1 JANUARY 2012

SUPPLIESSERVICESWORKS
Entities listed in Schedule 1£113,057
(€130,000)
£113,057
(€130,000)
£4,348,350
(€5,000,000)
Other public sector contracting authorities£173,934
(€200,000)
£173,934
(€200,000)
£4,348,350
(€5,000,000)
Indicative Notices£652,253
(€750,000)
£652,253
(€750,000)
£4,348,350
(€5,000,000)
Small lots£69,574
(€80,000)
£69,574
(€80,000)
£869,670
(€1,000,000)
Is GDS's £600,000 contract with Skyscape above the relevant threshold? If so, is the award of the contract through CloudStore illegal? Should the invitation to tender have been published in OJEU?

The UK's G-Cloud team are currently having a bit of a purple patch, congratulating themselves on government departments and local authorities now beginning to use CloudStore for millions of pounds-worth of procurements:
G-Cloud celebrates three major milestones

Posted on May 4, 2013 by denisemcdonagh

A little over a year since we launched the CloudStore, we are starting to see sales gain a real head of steam, with nearly 1,000 invoiced purchases, sales of over £18.2m to the end of March, and many more going through. At the Home Office alone,  where I am IT director, we are in the middle of putting through more than £6m of orders, and I’m expecting to see those numbers keep on rising, both in my department and across government. For getting us this far, I’d like to say a huge thanks to my team and to all you G-Cloud supporters out there, not least our growing number of suppliers.
Are all these contracts legal or are some of them side-stepping the European public contracts directive (2004/18/EC)?

1 comment:

Anonymous said...

*sigh*

The G-Cloud framework *is* procured through the OJEU process (every 6 months, hence we are on G-Cloud III now - see the official notice here: http://ted.europa.eu/udl?uri=TED:NOTICE:14199-2013:TEXT:EN:HTML&src=0). Once a framework has been established, public sector organisations can procure from that framework without the need for OJEU (because the suppliers on that framework have already been through the process). Page 7 of the document you quote has the relevant guidance (note that a mini-competition can be run by the buyer against the framework).

This is exactly the same as any one of the 104 framework agreements that the Government currently has in place (see: http://gps.cabinetoffice.gov.uk/i-am-buyer/find-a-product-or-service). Also note that this isn't just the UK - in 2010, 21,500 framework agreements were awarded across the EU (see: http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/cost-effectiveness_en.pdf)

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