Amazon’s Amazon Business unit has inked a multi-year public sector contract to provide public agencies with a slew of different products.
According to a report, the deal is valued at as much as $5.5 billion. The deal includes greater than 55,000 organizations, such as state and local government agencies and higher education schools that are part of the U.S. Communities buying cooperative. With the deal, buyers can purchase products via Amazon Business, including books, art supplies, scientific equipment and animal supplies. Amazon Business is creating an online marketplace for the purchase of products and services. Participating government agencies get discounted pricing for combined order volumes and low administrative costs thanks to Amazon’s “state-of-the-art” order management and delivery systems. U.S. Communities member agency Prince William County Public Schools acted as the lead agency, awarding Amazon Business the contract in January after issuing a request for a proposal last September. It looked at eight other proposals in addition to Amazon’s.
“Amazon Business delivers the buying experience our end users want, and we are thrilled to provide the contract vehicle for this extensive nationwide online marketplace,” Anthony Crosby, administrative coordinator of purchasing for Prince William County Public Schools, said in a statement, according to the report. The contract is for an initial five-year term and started on Jan. 19. There are options to renew the deal for three two-year periods, which means Amazon could end up selling products to government agencies for a total of 11 years. The participants in the buying community are estimated to spend $500 million a year under the contract. If Amazon maintained the contract for all 11 years and the $500 million a year happened each year, the deal would be valued at $5.5 billion, noted the report.
“Amazon Business is committed for the long term to serve education and government organizations and is honored to partner with Prince William County Public Schools and U.S. Communities to offer a contract solution for the public sector,” said Prentis Wilson, vice president of Amazon Business, according to the report.