Amazon Business this week won a multi-year public sector contract valued at up to $5.5 billion. The contract was awarded by a school district in Prince William County in Virginia, and extends to the more than 55,000 agencies, including state and local government agencies and universities, that are members of the U.S. Communities buying cooperative.

Buyers at tens of thousands of public agencies and nonprofit organizations can now procure a wide range of products on Amazon Business—including items ranging from books and art supplies to scientific equipment and animal supplies—under a contract announced this week by U.S. Communities, a buying cooperative for more than 55,000 public-sector agencies.

Amazon Business delivers the buying experience our end-users want.
Anthony Crosby, administrative coordinator of purchasing
Prince William County Public Schools

The contract, which U.S. Communities and Amazon Business announced on Tuesday, is for Amazon Business to provide an “online marketplace for the purchase of products and services” under procurement terms providing participating agencies with such benefits as discounted pricing for combined order volumes, and low administrative costs resulting from the use of state-of-the-art order management and delivery systems. U.S. Communities member agency Prince William County (Virginia) Public Schools, acting as the lead agency, awarded Amazon Business the contract in January after issuing a request for proposals last September and considering eight other proposals in addition to Amazon’s.

The contract was set for an initial five-year term that began on Jan. 19, with options to renew it for three two-year periods, for a total of up to 11 years. The bid document estimates spending by participating agencies of $500 million per year under the contract, or Master Agreement, with Amazon Business; if that spending volume occurred over the course of 11 years, it would result in a cumulative volume of $5.5 billion.

“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 the cooperative issued Tuesday.

Prentis Wilson, vice president of Amazon Business, added: “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.”

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The contract, which U.S. Communities ensured was solicited and awarded under public procurement rules and regulations, extends to all of the cooperative’s member agencies. It covers 10 product categories: Office Supplies; Classroom, School, Art Supplies and Materials; Home Kitchen, Food and Grocery; Books; Musical Instruments; Audio Visual and Electronics; Higher Education Scientific Equipment and Lab Supplies; Clothing; Animal Supplies Equipment and Food; and Miscellaneous.

Amazon Business, the business-to-business e-commerce arm of Amazon.com Inc. and No. 104 in the B2B E-Commerce 300, is one of many companies contracted by U.S. Communities’s agencies to provide its members with products and services. The buying cooperative lists on its website dozens of sellers under four specific categories—including The Home Depot Pro and electrical products distributor Graybar under the Facilities category; furniture suppliers Virco, Haworth and Herman Miller under the Office & School category; office machines suppliers Ricoh and Savin under the Technology category; and Advance Auto Parts and analytics software provider Experian under the Specialty category.

But Amazon Business is the only contracted company listed as an online marketplace, and it’s the only company that appears under each of the four categories. Indeed, the estimated $500 million in annual spending under the Amazon Business contract is nearly a quarter of the “over $2 billion” in products and services that U.S. Communities’s participating agencies already procure annually, according to figures on the cooperative’s website.

The U.S. Communities website includes a marketplace section, linked from a Shop button on the site’s navigation bar, where authorized buyers can use a single shopping cart to purchase products from any number of the contracted suppliers.

U.S. Communities charges its member agencies no fees and requires no minimum order volumes. The cooperative has scheduled two webinars later this month to instruct member agencies how to take advantage of the Amazon Business contract. The contract lets buyers register for tax-exempt purchasing, free two-day shipping on eligible orders valued at $49 or more, and use punchout software that enables buyers to link directly to Amazon Business from procurement software systems including SciQuest, Skyward, ESM and Coupa, the cooperative says.

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Amazon Business has been taking several steps to grow its sales to schools, government agencies and other public sector organizations. It includes a product section on its site for educators, and provides teachers with a free digital content service, Amazon Inspire. Last September, around the time the Prince William County Public Schools issued its request for proposals, Amazon Business hired Anne Rung, the former head of the U.S. Office of Federal Procurement Policy, as its global head of public sector sales. And its plans to expand its workforce recently included a job posting for a head of government markets.

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