Amazon enters public sector marketplace in £600M deal with YPO

Amazon has been awarded a 5-year digital marketplace contract from the local authority owned Yorkshire Purchasing Organisation (now known as “YPO”) worth up to £600M without a full public procurement process after Amazon provided the only compliant expression of interest to a prior information notice published in the Official Journal of the European Union.

The voluntary ex-ante transparency notice announcing the contract award states that the YPO chose to enter into a contract with Amazon after it was the only firm to submit a compliant expression of interest. It also said YPO believed Amazon to be “the only viable contractor currently operating in the market”.

Yorkshire Purchasing Organisation is a publicly owned central purchasing body based in Wakefield, Yorkshire. It is owned and governed by a consortium of county, metropolitan and borough councils in Yorkshire and the North West England.

The new e-procurement platform will allow participating schools, social care services, local governments and emergency services to buy goods through a single online marketplace and will help YPO expand its services which already includes some 30,000 product lines.

It is unclear whether Amazon will build a stand-alone marketplace for YPO, or if the marketplace will be integrated into Amazon’s existing B2B e-commerce platform, Amazon Business, which launched in April 2018 which includes features such as VAT-exclusive pricing and a tracking system for purchasing ­managers.

While this is the first time Amazon has struck such a deal with a UK region, it has similar agreements in place in the United States. Last year, it agreed to supply parts of the public sector through the US Communities government purchasing alliance.