Crown Commercial Service
A Memorandum of Understanding (MoU) is a non-legally binding agreement between two parties, which shows intended common actions.
During cross-departmental working initiatives, Crown Commercial Service identified a need for a new cross-departmental cloud MoU as part of the One Government Cloud Strategy (OGCS). This MoU is a commercial tool for maximising the value of total government spend with any cloud service provider (CSP).
Crown Commercial Service have negotiated a common MoU cloud procurement process with multiple CSPs and continue to roll this out to additional providers. This MoU aims to set out special terms and pricing for CSPs products and services which the provider will then make available to all public sector organisations.
CSPs signing an MoU should view the government as a single customer with multiple points of purchase and consumption.
For example, if a single department commits to spending a large amount with a provider, they might receive a discount on the published rate. If another organisation also commits to spend the same amount, they too would receive the same discount. Under a cross-departmental MoU, the 2 organisations would combine their spend commitments and receive a larger discount. Also, any new departments/agencies joining the scheme would also benefit from the larger discount rather than the cost of entering into a single customer contract with that provider. Any discounts agreed can vary between CSP.
Using the Memorandums of Understanding
The terms agreed within the MoU are automatically passed on to qualifying organisations (typically, all public sector organisations) who fulfil criteria agreed with the provider, irrespective of the procurement route chosen. The agreed clauses are then incorporated into the contract signed between the organisation and the CSP.
Potential benefits of the MoUs include:
- agreeing a baseline of commercial, technical, security and legal principles with each CSP
- using the governments scalability to achieve better commercial outcomes, such as negotiating larger discounts for smaller departments
- allowing flexibility for departments to add additional requirements
- reducing combined negotiation time for departments and providers
- making sure the contract is with a UK provider
The MoUs have a standard exit support clause. All organisations can use this asa baseline for exit clause discussions. This standard clause also refers to a baseline level of resources and support from the CSP to enable smooth and efficient migration to a different CSP.
The value of the MoUs for government and the CSPs comes from the standard negotiated terms and conditions which they can use as a default in the majority of cases. Deviating too far from the standard terms and conditions reduces the value of the MoU.
The Crown Commercial Service will regularly review the MoUs and modify them if both parties find that the current terms and conditions are no longer appropriate.
Current Memorandums of Understanding
Crown Commercial Service continues to negotiate MoUs with all of the major CSPs currently used within government.
MoUs that are currently in place and active include:
Organisations needing further information or assistance with the MoUs can email mou@crowncommercial.gov.uk
Last updated 21 March 2023 +show all updates
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List of MOU updated
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First published.