CCS urged to do more to make Cloud Compute 2 framework more accessible to SMEs
The Crown Commercial Service (CCS) stands accused of “paying lip service” to smaller suppliers after embarking on a revamp of the “underused” Cloud Compute Framework to make it more accessible to SMEs.
The authorities’s procurement arm is inviting submissions from potential suppliers for the £1.35bn Cloud Compute 2 framework till 21 August 2023, however Computer Weekly has acquired quite a few complaints from involved SMEs in regards to the framework since its tender paperwork had been printed on-line final month.
According to the suppliers Computer Weekly has spoken to, many on situation of anonymity, the tweaks CCS has launched to make the framework more SME-friendly fail to go far sufficient, with the complainants claiming the obstacles to entry to the framework are too excessive for smaller suppliers.
For occasion, suppliers have taken situation with the “onerous” vetting procedures CCS has in place to assess the monetary well being of potential individuals. And they’re additionally sad in regards to the truth CCS is limiting the variety of obtainable slots on the framework for SMEs, whereas there isn’t a cap on the variety of spots obtainable to the bigger, hyperscale cloud suppliers.
“The level of financial scrutiny, not to mention the administrative burden tied into that, is going to exclude the vast majority of SMEs and put them off applying anyway,” stated a provider supply, who works for an SME cloud service supplier.
“And when you look at the [tender requirements], it’s almost as if the hyperscalers have been guiding CCS’s hand when they’ve been writing down the requirements to this. They say they want to open it up to SMEs, but when you look at the fine print, they’re paying lip service to competition. Nothing more.”
However, a supply inside CCS advised Computer Weekly that any suggestion that the framework is anti-SME needs to be thought of vast of the mark.
“CCS has a clear and driven focus on making it easier for businesses to bid for work. We understand how important it is to have a diverse range of suppliers working with the public sector,” the supply stated.
“SMEs continue to be a key component of the commercial agreements we create. This new agreement [Cloud Compute 2] supports the government’s SME agenda .”
Following the primary
The first iteration of the Cloud Compute framework is due to expire in May 2024. It was initially pitched as a substitute procurement route for public sector consumers with large-scale cloud tasks that had beforehand been pushed by way of the more SME-focused G-Cloud framework.
Seven of the 9 suppliers listed on the only Lot Cloud Compute 1 framework are US-based hyperscalers, together with Amazon Web Services (AWS), Google, Microsoft, IBM and Oracle, with UK-based Fordway and UKFast rounding out the remainder of the record.
The second iteration of the Framework, in the meantime, has seen the variety of Lots expanded by three to permit for the inclusion of two separate Lots which are particularly focused at SMEs.
(*2*) Rob Anderson, analysis director at IT market watcher GlobalData Technology, advised Computer Weekly.
Proof of that may be seen within the G-Cloud contract information printed by CCS by way of its Digital Marketplace portal, which confirms AWS as being that framework’s prime provider when it comes to the quantity of IT spend it has accrued from public sector organisations.
The information exhibits that AWS has secured a complete of £661.25m in public sector cloud spend to-date, with the vast majority of that enterprise coming its manner within the wake of its opening its UK datacentre area in late 2016.
According to the Digital Marketplace figures, AWS had secured a complete of £4.5m in public sector cloud spend throughout its time on the framework up to the 2016/2017 monetary yr, however – within the yr after its UK datacentre area opened – this determine shot up to £21.3m and has continued to rise ever since.
Microsoft’s figures comply with a really related pattern, with The Digital Marketplace information confirming – by the point of the 2016/2017 monetary yr – that it had secured a complete of £7.1m in public sector cloud by way of the framework. And, within the yr following its UK datacentre opening, this determine had risen to £20.4m.
Some of the deal sizes AWS, particularly, have secured by way of G-Cloud have raised eyebrows among the many provider group, and this is among the explanation why CCS created the Cloud Compute framework within the first place, it’s claimed.
“The reason the Cloud Compute framework exists is because large central government departments were doing substantially sized, direct award deals through G-Cloud, which was considered a misuse of what G-Cloud was originally intended for,” a supply, with shut working data of presidency procurement frameworks advised Computer Weekly on situation of anonymity.
“A prime example is the £120m deal the Home Office struck with AWS, which was done under direct award through G-Cloud.”
Despite the framework being particularly created to funnel high-value cloud contracts by way of, this supply claims Cloud Compute 1 has generated only a few offers because it went reside in May 2021.
“It is no secret that Cloud Compute 1 was a complete disaster for CCS. It is impossible to use and no-one wanted to use it,” the supply continued.
When Computer Weekly requested CCS in regards to the quantity and worth of offers which were transacted by way of the Cloud Compute 1 framework to-date, a spokesperson stated it doesn’t “hold details” of contracts signed through this procurement route.
“Public information is available direct from departments on their spends and also through Contracts Finder,” the spokesperson stated.
There is just one deal (valued at £750,000) that overtly references the Cloud Compute 1 framework on the federal government’s Contract Finder portal, which concerned the availability of Oracle cloud services to the Department for Work and Pensions (DWP) for a proof of concept research project.
Another supply, working for a public sector analyst agency that tracks authorities IT spend confirmed the above contract is the one call-off that maps again to Cloud Compute 1 in its database, and equally described it as a “significantly underused framework”.
This is among the explanation why sources declare the federal government has made strikes to open up the second iteration of the framework to SMEs, with CCS describing model two as “expanding on the benefits” of Cloud Compute 1.
“Lessons learnt from [the framework’s first iteration] and feedback we have received during pre-market engagement tells us that SMEs are well positioned to play a critical role in supplying Lot Two (value-added services) and Lot Three (professional services),” stated CCS, in a provider and purchaser continuously requested questions doc, printed on-line.
The “value-added services” Lot is geared toward firms that need to resell the companies of the hyperscale cloud suppliers that safe spots on Lot 1. Lot 3, in the meantime, is for SMEs that present skilled companies – resembling cloud-related consultancy, coaching and auditing – to the general public sector on a short-term foundation.
The framework’s fourth and closing “Cloud Secure+” Lot, in the meantime, is geared toward public sector customers – specifically these within the defence and regulation enforcement sectors – that want a cloud computing atmosphere able to processing and storing information with a safety classification of UK Secret.
The choice to open the framework up to SME resellers and consultancies is sensible, stated Danny Quinn, managing director of Glasgow-based datacentre companies supplier DataVita, in a post on the professional social networking site LinkedIn.
“Many smaller public sector entities are not structured to deal directly with these large [hyperscale cloud] providers,” he stated.
He additionally used the submit to air issues that Computer Weekly has heard different members of the SME cloud group echo in latest weeks about how the obstacles to entry onto Cloud Compute 2 could show too excessive for a lot of smaller suppliers.
He used the LinkedIn submit to draw particular consideration to the actual fact CCS needs potential suppliers to present a signed buyer reference with a contract worth of more than £20m as a part of their framework software, which could show troublesome for a lot of SMEs to do.
“While I understand the importance of financial due diligence in such frameworks, it seems this requirement primarily excludes a considerable number of organisations from bidding and disproportionately benefits larger US tech companies,” he wrote within the submit. “In my view, this type of restriction stifles competition and puts other providers at a disadvantage, undermining a fair and level playing field.”
According to CCS sources, the £20m buyer reference is taken into account an optionally available further that potential bidders can present if they’re in a position to, however it’s not obligatory.
“No SME (or any other bidder) will be excluded from being able to participate if they are unable to provide this information,” the supply added.
Anti-SME monetary compliance checks
Computer Weekly has additionally heard issues raised by different sources inside the SME cloud group in regards to the “onerous” and “daunting” vetting procedures that CCS will likely be implementing to assess the monetary well being of potential Cloud Compute 2 suppliers.
Under the Bronze, Silver and Gold system the Cabinet Office makes use of to classify how necessary authorities contracts are, Cloud Compute 2 is categorised as Gold general, which suggests it’s a top-tier framework when it comes to complexity and criticality.
“Gold contracts are typically larger, longer contracts for complex or critical works and services,” as acknowledged within the authorities’s Assessing and monitoring the economic and financial standing of bidders and suppliers June 2023 steering notice.
Lot One and Four on the framework are categorised as being Gold, whereas Lots Two and Three are categorised as being Silver and Bronze, respectively.
Suppliers wishing to make it onto Lots One and Four will likely be topic to a “very detailed financial assessment” to “assess the bidders’ financial capacity to perform the contract” and to stop “financially challenged suppliers” being appointed to authorities frameworks, in accordance to the federal government’s steering notice.
Suppliers vying for a spot on Lot Two and Three will likely be topic to much less onerous monetary checks, as a result of contracts awarded by way of these Lots usually have a tendency to be shorter in size and canopy work that’s thought of to be necessary, however non-critical.
Even so, a supply with shut working data of the framework, stated whereas Lot Two and Three suppliers will likely be topic to a more primary stage of monetary evaluation, the method concerned will likely be very time- and resource-consuming for the typical SME.
“It will be hellish process for the big providers, let alone SMEs,” stated the supply. “The financial risk assessment template that all bidders will need to complete is going to be very daunting for SMEs.”
Constraining the market
Another factor of the framework that suppliers have taken points with is the actual fact CCS is limiting the variety of suppliers who can take part in Lots Two and Three, but it surely has imposed no limits on the variety of hyperscalers who can take part in Lots One and Four.
There are areas for 30 suppliers on Lot Two, whereas the quantity who can take part in Lot Three is restricted to 60.
Owen Sayers, an information safety lawyer with more than 20 years’ expertise of engaged on public sector IT contracts, is amongst these baffled by the choice to impose limits on the Lots that seem to present probably the most quantity of alternative for SMEs to take part on this framework.
“While HM government will allow anyone who meets the basic quality requirements on to Lot One and Lot Four, the market is very constrained in Lot Two and Lot Three, which is arguably where the UK has the greatest mass [of SMEs],” Sayers advised Computer Weekly.
And whereas SMEs aren’t explicitly banned from making use of for a spot on Lot One or Lot Four, the chance of a smaller provider succeeding on that entrance is low, Sayers continued.
“To be in Lot One, you must operate your own cloud platform at Official or Official-Secret, and there are not many of those [types of SMEs] around now. To be in Lot Four, the same is true but at Secret [level], and they are even rarer,” he stated. “How do SMEs get a slice of any of those pieces when up against the big names?”
Another bone of competition with the framework centres on the way in which Lots One and Lots Two are linked collectively, as a result of Lot Two is geared toward SMEs that need to resell cloud companies of the hyperscalers in Lot One.
As per the phrases and situations of the framework, potential Lot Two individuals should stipulate of their submissions which cloud suppliers they need to resell the companies of, they usually will be unable to make any adjustments to that over the course of the framework’s lifetime.
A CCS supply stated this rule exists to “enable compliant awards at the call-off” stage however Lot Two suppliers won’t face any restrictions on the variety of cloud suppliers they need to title of their bid, which ought to allay their issues on this level.
Elsewhere within the phrases and situations of the Cloud Compute 2 framework, it does state that if the cloud suppliers the SME needs to resell the companies of are unsuccessful in securing a spot on Cloud Compute 2, the reseller in query may even be denied a spot on the framework.
“Resellers can initially name as many cloud service supplier partners as they wish as part of this process to be appointed to the framework, but a successful bidder to Lot Two once on the framework may only offer to resell a cloud service which has also successfully been appointed to Lot One under any Lot Two call-off procedure,” the phrases and situations doc acknowledged.
“For the avoidance of doubt, Lot Two bidders’ lists will be considered final at [the] tender submission… [so] successful Lot Two bidders cannot increase their cloud service supplier list available to buyers on this framework throughout the lifetime of this agreement because they will be pre-qualified on the basis of the experience they have of the initially named cloud services.”
According to a supply working for a consultancy that advises IT suppliers on how to win authorities enterprise, an unexpected situation that some would-be Lot 2 suppliers are battling is that their favoured hyperscaler won’t say if they’re planning to apply for a spot on the framework or not.
And so the SME resellers are left weighing up whether or not or not it’s value their whereas making use of for inclusion on Cloud Compute 2, given the executive burden concerned.
“That is the big problem with Lot Two,” the supply stated. “If you’re bidding for resale, you need to be sure that your chosen hyperscalar is bidding to be part of Lot One, and nobody can seem to get an answer out of AWS or Microsoft on that,” they added.
What may make the framework more interesting to SMEs is the problems that some are having with the thirteenth iteration of G-Cloud. This is amid claims inflation is consuming into the margins of some suppliers to such an extent it’s thought of to be a commercially unviable framework for them.
Computer Weekly shared the suggestions from the SME provider group in regards to the Cloud Compute 2 Framework with a spokesperson for the Cabinet Office, which acts because the sponsoring division for CCS.
In response the spokesperson stated the division is working to decrease the obstacles to entry for SMEs within the cloud market utilizing the framework by “providing additional Lots and expending the agreement’s scope”.
In addition to this, the spokesperson identified that CCS has elevated its spend with SME suppliers by “over £300m” through the 2022-2023 monetary yr, and over 70% of the suppliers it engages may be categorised as micro, small or medium-sized enterprises.
The spokesperson added: “We want to make it as easy as possible for small businesses to win government contracts and we design commercial agreements with SMEs in mind, including through engaging with them before contracts are put out to tender.”
