CCS holding firm on G-Cloud 14 insurance requirements for prospective Lot 4 suppliers

The Crown Commercial Service (CCS) is refusing to extend its decision to revise down the amount of insurance cover required by prospective G-Cloud 14 suppliers to all four of the framework’s Lots, despite pleas from suppliers to do so.

The government’s procurement arm is coming under growing pressure from prospective G-Cloud 14 Lot 4 suppliers to reconsider its decision to keep the amount of insurance they need to participate in the framework agreement at £25m, Computer Weekly has learned.

This is in the wake of CCS back-tracking on its plans to “disproportionately hike” the amount of insurance cover suppliers would need to participate in G-Cloud 14’s first three Lots by £20m.

Previous iterations of the framework required suppliers to hold £5m in employers’ liability insurance, but for G-Cloud 14, CCS initially stated they would also need to have separate public liability and professional indemnity cover of at least £10m. 

CCS confirmed on 7 March 2024 that it had reconsidered its position on the levels of liability insurance mandated for prospective suppliers. As such, participants in Lots 1 to 3 of the framework would now only need £1m of cover for public liability and professional indemnity, as well as the £5m in employers’ liability.

Suppliers looking to secure a place on the fourth and final Lot of G-Cloud 14 would, however, still need a total of £25m insurance cover.

The decision to retain these elevated insurance levels for Lot 4 has not landed well with prospective suppliers, which have repeatedly called on CCS to change its mind, according to a copy of the qualifying questions for Lot 4 seen by Computer Weekly.

“I can see the level of insurance needed has been queried on Lots 1 to 3 and it has been changed to a lower level,” wrote one prospective supplier. “Will the insurance level required for Lot 4 professional indemnity also be lowered to below £2.5m?”

In light of the professional indemnity insurance for some of the other Lots having been reduced, another prospective supplier said: “We would ask CCS to reconsider [its] position on the professional indemnity insurance for Lot 4 and ask that this is reduced from £10m to £5m.”

In response to many of these questions, a representative for CCS stated: “The insurance levels will remain as drafted.”

Computer Weekly further understands that CCS has justified its actions by telling suppliers that “insurance levels are assessed on an individual basis”, and because G-Cloud 14 Lot 4 is operated as a standalone framework to the other three G-Cloud 14 Lots, it is permissible for it to have different insurance requirements.

Lot 4 is geared towards helping public sector IT buyers acquire the cloud support, security and migration services needed to carry out large-scale projects, but – as confirmed by CCS – only £25,000 of spending has been put through Lot 4 of G-Cloud 13 since it went live in March 2023.

This is despite guidance from CCS advising public sector IT buyers that the maximum contract value for Lots 1-to-3 is £250,000 and anything that exceeds that should be processed through Lot 4. No similar spending guidance has been issued for G-Cloud 14.

As previously reported by Computer Weekly, the insurance requirements for Lot 4 have drawn criticism in light of how much spending has been put through Lot 4 on G-Cloud 13.

Owen Sayers, a senior partner at IT security consultancy Secon Solutions, previously told Computer Weekly that given how little business has been transacted through Lot 4, the amount of insurance CCS is looking for seems disproportionately high.

“Lot 4 has always been something of an outlier in G-Cloud, arriving late and for an unclear purpose,” he told Computer Weekly. “The fact it has processed only £25,000 of business is therefore both surprising and yet not.”

Computer Weekly contacted CCS to see if it had anything further to add in response to this story, and received the following statement in response.

“G-Cloud 14 is a live procurement. Suppliers should submit questions about the procurement directly through the official clarification process, where they will be reviewed and addressed appropriately,” said a CCS spokesperson.