Exclusive! YPO* and Amazon To Partner

Big news from the world of digital transformation in the public sector, as YPO* agrees a major deal with Amazon to use the firm’s technology for the YPO collaborative buying platform.

This was announced last week via a “Voluntary ex ante transparency notice published on the European Commission Tenders Electronic Daily website last week, and spotted by one of the our eagle-eyed friends, Rob Knott, who Tweeted here.  There hasn’t been an official announcement yet but no doubt we will hear more soon.

I don’t think I have ever seen a voluntary ex ante transparency notice before, and it describes an interesting process. YPO issued a PIN at the end of May (prior indicative notice), but they say only one firm responded – Amazon, clearly.  So that means they are entitled to negotiate and agree a contract with Amazon directly, and YPO does not have to openly advertise the opportunity, issue an RFP and so on.

“..the Authority has only received one compliant expression of interest. In consequence YPO intend entering into a contract governed by the Concessions Contract Regulations 2016.  YPO believes that the proposed contractor, being an established mature B2B marketplace provider with a range offering of over 1 000 000 products from thousands of sources, is the only viable contractor currently operating in the market”.

That’s not surprising – when the PIN was published, on May 29th, our sources said it was just a compliance issue, YPO had basically decided on Amazon. And to move to contract award from the PIN in just six weeks is unusual, to say the least!

We’re not clear whether Amazon will be building a marketplace for YPO, re-purposing their own, or linking YPO to Amazon Business with just some YPO re-badging. The description said “The Authority has a requirement for a Digital Marketplace capable of providing a wide range of competitively priced products to the Education, Local Government, Emergency Services, Social Care Sectors and all other public sector organisations with a single point of access for customers and suppliers.”

The original PIN talked about a "procurement portal to supplement its already extensive product catalogue”.  But one might assume that the YPO products would sit within the same marketplace? And what about services?

In any case, this is indicative of YPO’s forward-thinking mindset and a sign that while central government seems to be struggling with its technology approach (see here for our report on the recent Crown Commercial Service Marketplace setback), some players in the wider public sector are moving ahead.

NEPO in the north-east has shown innovation in areas such as their NEPRO consulting framework, and in their approach to social value as well, but YPO is making a play here to move beyond their roots in education and local government in Yorkshire and Lancashire. The organisation is owned by some 13 local authorities; but put it like this. If YPO were a publicly quoted company, this move would be a “buy” signal - for me anyway.

* YPO is the organisation formally known as the Yorkshire Purchasing Organisation!  I did not know it had formally changed its name until today...

Voices (3)

  1. Alan Hobbs:

    “Amazon paid just £15m in tax on European revenues of £19.5bn
    Online retailer’s UK warehouse and logistics operation more than halved its corporation tax bill from £15.8m to £7.4m”………………how good a deal is this for the British Tax payer ?

  2. Joe bloggs:

    I work for ypo in yorkshire and they have told its workforce today that all of this is ‘fake news’, i know who i believe!!!!

  3. Bill Atthetill:

    An extraordinary procurement in so many ways. One area of interest (for me) is how they estimated the value of the concession contract (£600m).

    Is this the total throughput (total cost of delivered products) through the contract ie: £600m worth of products over 5 years?

    Or

    Is this the fee that would be paid to Amazon by suppliers (let’s tag this at 10%), including the likelihood of the standard 0.5% kickback to YPO for hosting it, suggesting an estimated 5-year throughput of circa £6bn pa?

    If the latter, then, it’s ground-breaking. But also a little worrying if concluded within a few weeks.

    Reading this guidance, section 8, was helpful (sort of).

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/528062/20160607_Handbook_for_the_Concession_Contracts_Regulations_2016_final.pdf

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