G-Cloud is the UK public sector framework through which public bodies can purchase cloud services.
It is now well-established and consists of a series of framework agreements with suppliers, from which public sector organisations can buy services without needing to run a full tender or competition procurement process and an online store – the “Digital Marketplace” (previously “CloudStore”) – that allows public sector bodies to search for services based on their requirements that are covered by the G-Cloud frameworks. Versions 7 and 8 of G-Cloud had a total of 2726 suppliers (90% SMEs) offering over 26,000 services to the UK public sector. The list of suppliers is here: https://digitalmarketplace.blog.gov.uk/2016/08/04/g-cloud-8-supplier-statistics/
Version 9 of G-Cloud is now open for applications. The application deadline is 5pm BST, 11 April 2017. G-Cloud 9 services will be available to UK public sector organisations to buy on the Digital Marketplace towards the end of May.
G-Cloud is in effect a long list of approved service providers, divided into 3 lots (previously 4 lots in other versions of the framework):
  • cloud hosting, for example content delivery networks or load balancing services;
  • cloud software, for example accounting tools or customer service management software; and
  • cloud support, for example migration services or ongoing support.
Being on the framework does not guarantee business, but it is the mandated procurement route for UK public bodies to purchase cloud services so it is the main way for cloud suppliers to obtain direct contracts with UK public bodies. In order to apply, an organisation must be able to accept and work with the terms of (i) the Framework Agreement, which is the agreement between the government and suppliers for the basic terms and conditions of buying and selling G-Cloud 9 services; and (ii) the Call-Off Contract, which is an individual contract between the buyer and supplier specifying the service terms, conditions and prices of the services being bought.  The Framework Agreement and Call-Off Contract remain non-negotiable and the Crown Commercial Service (which operates G-Cloud) will not accept non-compliant bids in the G-Cloud procurement process. Some of these terms are unusual for cloud vendors and often involve a materially different balance of risk, transparency and control to their standard terms. Typically, suppliers undertake a gap analysis between their standard terms and the G-Cloud terms before deciding to bid.   
Suppliers can use the additional schedules to a Call-Off Contract as a mechanism to mitigate risks highlighted by such a gap analysis by closing gaps and clarifying conditions (but not varying the express terms of the Call-Off Contract).  These additional schedules include a collaboration agreement (required by buyers when the G-Cloud supplier is required to integrate its services with the buyer’s other third party suppliers), alternative clauses and guarantee. Liability caps for Call Off Contracts are specified in the relevant order form at the time. Suppliers need to consider whether they fix a standard value or whether they will consider negotiating with individual customers based on contract value.
Summarised below are some of the key changes for G-Cloud 9: 
A single version of G-Cloud: Since G-Cloud 2, two iterations of the G-Cloud framework have run in parallel, however G-Cloud 9 will replace both G-Cloud 7 and G-Cloud 8 to create a single iteration of G-Cloud.  This will provide consistent information about all services and enable buyers and suppliers to use one set of contracts for all their G-Cloud services.  All existing suppliers who wish to continue to offer G-Cloud services will need to re-apply to G-Cloud 9 as G-Cloud 7 and G-Cloud 8 services will be removed from the Digital Marketplace when G-Cloud 9 services go live in May 2017.
Lot structure: G-Cloud 9 introduces three ‘lots’ rather than the previous four, renaming and categorising some services.  Suppliers will need to check the lot classification of their services.  The questions for each lot have been amended to enable suppliers to provide greater detail and differentiate their services from their competitors.  Some suppliers may need to adapt their internal processes to collate the information they need to complete their application.
Contract structure: In G-Cloud 9, a number of terms of the Framework Agreement (listed in clause 2.1 of the Call-Off Contract) are incorporated within the Call-Off Contract, meaning suppliers need to understand how both documents apply to each of their customer arrangements. This is more about structure and drafting than a substantive change but will let buyers enforce some of the terms in the Framework agreement directly against suppliers, rather than referring such issues to CCS to address.
Term: Since the very early days of the G-Cloud framework, one of the central principles has been that government buyers are limited to signing contracts that can only last for two years.  G-Cloud 9 has addressed concerns that this time frame is too short and now permits, under certain conditions, 24 month contracts to be extended by the buyer for two 12 month periods, increased from 6 months in G-Cloud 8.
Please contact Barry Jennings (barry.jennings@twobirds.com), Roger Bickerstaff (roger.bickerstaff@twobirds.com) or Christina Pennock (christina.pennock@twobirds.com) if you would like more details of the G-Cloud 9 changes or to discuss the opportunities of the framework for your business.