AIIA will continue to press governments throughout Australia to revise ICT procurement arrangements following decisions by the Federal and Victorian Governments to change ICT contract conditions.

The Victorian Minister for Information and Communication Technology, Marsha Thomson, has foreshadowed plans to alter the State’s ICT procurement processes to allow contractors to retain ownership of intellectual property (IP) which has been developed through the course of a contract and to replace uncapped liability with a risk evaluation approach.

The Minister also outlined plans to ensure insurance requirements for ICT contracts reflect the actual level of risk.

The changes are expected to take effect from March next year.

AIIA’s Chief Executive Officer, Rob Durie, says each of these actions have been championed by AIIA and represent the most significant advance in Australian government procurement practices this year.

He said that by committing to the changes, the Victorian government had shown itself as a leader in recognising the importance ICT plays in underpinning productivity growth and had ensured Victoria would become particularly attractive to ICT suppliers.

“These announcements create the potential for significant industry growth and are an important step towards ensuring Australians are good producers of ICT, not just good users,” Mr Durie said.

“The decision on IP, liability and risk analysis should become the standard for all governments in Australia,” Mr Durie said.

The Federal Government also has taken steps to change some of its ICT contractual arrangements in line with its commitments prior to the last federal election.

The Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, released a draft guide for government departments and agencies which is aimed at capping liability at appropriate levels determined through risk evaluation of ICT suppliers contracting with government agencies.

The new draft policy, which will be open for comment until 15 February 2006, will replace the existing system in which uncapped liability applies to most government contracts.

The following draft documents have been made available for industry comment as part of the consultative process: 1. A Guide to Limiting Supplier Liability in Information and Communications Technology Contract for Australian Government Agencies – Developing and Implementing a risk assessment and mitigation strategy; and
2. Companion to the Guide to Limiting Supplier Liability in Australian Government Contracts.

Copies can be viewed at http://www.dcita.gov.au/ict

The Minister said the draft guide provided practical assistance to procurement officers on how to identify and manage risk in government ICT contracts, including sample clauses for ICT contracts.

Welcoming the move, Mr Durie said AIIA had been pressing for the change and only last week had called on all governments to follow Victoria’s lead and cap liability along with ensuring greater flexibility in the retention of IP by ICT suppliers.

Mr Durie said that IP remained one of the most contentious issues in negotiating contracts and allowing suppliers to commercialise the software applications and solutions they develop can be expected to result in cheaper costs, more innovative offerings and greater focus on the product to be supplied.

”The Attorney General’s Department is currently conducting a whole of government review of IP and, while this is important, we hope the department will move quickly to complete the review as it applies to ICT and fulfil another much delayed election commitment,” he said.

“AIIA looks forward to holding further discussions with the Federal Government and with state and territory governments on these issues,” he said.

In another move, the commonwealth announced the outcome of its Government Information Technology and Communications (GITC) framework review which recommends the existing modular contract be replaced with a series of model contracts tailored to different elements of ICT procurement.

The new model contract series is expected to be in use by May 2006 following further industry consultation. The government’s objective is to replace the current proliferation of contracts and non-standard terms, reducing the time and cost of contract development and negotiation. The model contracts will not be mandatory, but uptake will be encouraged.

The new liability position and any changes on IP or other relevant policies announced in the interim will be incorporated in the new contracts.

Although the existing GITC framework was due to expire in September, it can be used until the new series is in place. See www.agimo.gov.au for details.

The success in Victoria and with the Commonwealth Government can be attributed to a team effort involving AIIA’s Board of Directors, particularly the outgoing Chair of the Government Business Taskforce, Peter Kazacos and members of the Government Business Taskforce, along with the Victorian branch committee and those associated with AIIA’s “Better Practice, Better Outcomes” report on liability.

Details on the federal government's recent decision to adopt the gateway contract review process can be seen elsewhere in this Bulletin.