The UK Crown Commercial Service is facing questions about its decision to increase its hosting agreement with Amazon Web Services (AWS) by 89 percent.

As reported by ComputerWeekly, this increase mid-contract is not strictly allowed according to procurement rules.

UK Government
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The deal was signed in February 2023 through the G-Cloud 13 framework, at the time valued at £1.3 million ($1.63m) and spanning 36 months. According to the CW report, this was increased to £2.5 million ($3.13m) in May of this year.

Contract value increases are allowed to be increased, though only up to 50 percent of the original value under Regulation 72 of the Public Contracts Regulations 2015.

A public sector IT expert told CW: “The contract was awarded under G-Cloud 13, and is obviously governed by PCR15. There’s no argument with that. But the CCS has not provided a plausible explanation for the uplift in contract value following the CCN, which clearly puts it in the threshold that requires further competition.”

There is a loophole in Regulation 72 which enables departments to increase in 50 percent increments, though the CCS Change Control Notice does not specify if this is the case.

AWS declined to comment.

AWS is a major contract winner when it comes to the UK government, with several departments signing contracts including the UK Health and Care Institute, the Home Office, the Department of Work and Pensions, the Competition and Markets Authority, and Defra.

AWS has also of late committed to investing £8 billion ($10.47bn) in data centers in the UK.

The UK's Competition and Markets Authority (CMA) notably has an investigation ongoing into the cloud computing industry (despite the CMA being an AWS customer itself). While much of that investigation is focused on licensing practices by the big cloud computing providers, the government has been accused of pricing out smaller cloud providers from contractual agreements.

Earlier this year, the CCS increased its minimum insurance cover for cloud computing within the G-Cloud framework to £20 million, which could be cost-prohibitive for many smaller providers.