Global cloud giant Amazon Web Services has signed a three-year $57.6 million whole-of-government agreement with the New South Wales Department of Customer Service cluster through a non-tender direct negotiation.
The deal started on Wednesday and will run for three years to 2025.
It was signed with the New South Wales Department of Customer Service and represents the cluster’s anticipated spend to host computer and storage infrastructure in AWS cloud services.
AWS already holds a federal whole-of-government agreement in Australia which state and territory governments can access, including New South Wales. The federal deal has ballooned in value by more than 10 times to $390 million since 2019 and was extended for another three years in April.
Tender details posted on Tuesday show Amazon’s newest New South Wales whole-of-government arrangement is expected to be worth $57,640,000 over three years.
It was signed with the Department of Customer Service (DCS), which headlines one of the state government’s 10 clusters that also includes Service NSW.
A spokesperson for the Department of Customer Service said the contract value is the anticipated spend between the DCS cluster and AWS over the next three years and has been established under a whole-of-government agreement.
“The NSW Government uses the Commonwealth Government’s enterprise agreement with AWS. It is mandatory for NSW agencies to use the whole-of-government agreement when receiving services from AWS. However, the use of AWS services is not mandatory,” the spokesperson told InnovationAus.com
“This renewed agreement consolidates previous separate consumptions of AWS for the DCS ICT (including GovConnect), Spatial Services, Government Technology Platforms, Data Analytics Centre and Cyber Security NSW business units.
“The renewed agreement will provide a substantial saving across the life of the contract due to the benefits provided from using the Commonwealth Government’s enterprise agreement with AWS.”
The New South Wales government currently holds a sourcing arrangement for AWS services with a cloud purchasing arrangement for its agencies
That agreement, which started in 2020, requires agencies to procure AWS cloud services through the federal Digital Transformation Agency’s whole-of-government deal with AWS.
Agencies have been told to migrate existing AWS services to the cloud purchasing arrangement when their existing contracts reached the end of their initial term.
The $57.6 million New South Wales contract comes as AWS parent Amazon faces mounting pressure on tax transparency.
One in five of the company’s shareholders last week voted for the tech giant to adopt the new GRI standard and provide a country-by-country breakdown of its income, revenue and taxes in Australia and the other countries that it operates in.
Australia – where Amazon’s cloud business reported $600 million in revenue but paid only $16 million in tax in the 2020 financial year – was used as evidence for the global transparency push.
This article has been updated to include comments from the Department of Customer Service.
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What happened to the work of the Sovereign Procurement Taskforce? Why are we still signing these ludicrous deals?