Amazon closes £600m public sector supply deal
Amazon has secured a £600m deal with the Yorkshire Purchasing Organization in which it has agreed to supply everything from paper clips to plasters for the public sector in Yorkshire. The deal includes schools, emergency services, local government and social care.
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The five-year agreement marks the first time Amazon has signed such a deal in the UK and covers 13 local authorities all of whose operating needs will be provided by the retail giant.
Amazon signed the deal with the Yorkshire Purchasing Organisation (YPO), a procurement body owned by local authorities which makes mass deals with suppliers to help push the cost of goods down for the the public sector.
According to The Telegraph, Gus Tugendhat from data company Tussell said: “Having revolutionised consumers’ retail habits, Amazon's next step may be to do the same for public sector purchasing."
The newspaper reported that a contract notice published by the YPO said Amazon was “the only viable contractor currently operating in the market”. Nevertheless, the deal generated complaints from local suppliers.
Amazon already has similar arrangements in place with local authorities in the United States. Last year, it closed a deal to supply parts of the public sector through purchasing organisation US Communities.