The government ICT market is the single largest ICT market in Australia, with approximately $6B spent each year. The month of June has seen AIIA very focussed on ensuring that the terms and conditions upon which this business is done are acceptable to suppliers. AIIA has provided reams of comments on new standard contracts; provided detailed input on a significant new tender; continues to be involved in discussions with various governments on key contracting issues; and is beginning to turn up the dialogue on “common contracting”.

Both the Federal Government and Western Australia publicly released new standard contracts for comment. The Federal Government’s new contracting modules – SourceIT - are designed to simplify and streamline ICT contracting for suppliers and government.

The first three modules, for hardware, commercial off the shelf software and consultancy services, were publicly released in late May. AIIA has provided very detailed comments on the drafts to government as part of the consultative process.

Broadly, AIIA has supported the objective of the drafts. Over recent years, agencies have moved away from the more complex GITC4 and suppliers are faced with a broad range of contracting terms – clearly, a time consuming and costly result for all. However, AIIA is concerned that there are a significant range of issues that need to be addressed before the drafts can be regarded as acceptable to industry. These include amendments to reflect the business models used in the ICT industry, more equitable risk allocation, removing clauses that impose disproportionate costs and including certain protections for the supplier.

AIIA’s comments, which run to nearly 90 pages for 3 modules, will be available to members from AIIA’s website in late June. To assist members understand the key themes and issues in Source and the implications for their organisations, Sparke Helmore Lawyers and AIIA will conduct briefings on SourceIT in Sydney (6 July) and Canberra (11 July) – see Events section for more details.

AIIA would like to extend thanks to members of the Legal Forum and the Government Business Taskforce that provided detailed input as part of AIIA’s submission. Whilst the government had previously indicated that they wanted to release the modules at the end of June, AIIA has recommended that government take additional time if necessary to consider industry comments and release only when the modules better reflect the interests of both parties.

Meanwhile, the Western Australian Government publicly released their new standard contract, Government Conditions of Contract (GCOC). The AIIA Secretariat and WA Branch have worked together to review and provide detailed feedback on this draft, which will see approximately $1-2B worth of ICT spend in the next few years.

Whilst the relevant department have been very open and consultative on the terms, AIIA’s view is that significant further discussion is required before the terms can be regarded as fair and workable by industry. Some of the warranties and obligations are very onerous and the intellectual property clauses require thorough review.

As with the SourceIT, the Western Australian submission, which runs to over 25 pages, will be available to AIIA members from our website in late June. Members who do business with the WA Government are encouraged to review the submission and consider getting involved in the consultative process to help achieve a good outcome on this important contract.

AIIA’s Victorian Branch has been involved in discussions with the government on both the eServices Panel tender and the new intellectual property policy for developed software. Significant progress has been made through these discussions, with amendments made to better accommodate industry concerns.

However, inevitably, some concerns remain – or will only emerge as practice evolves, so members are invited to raise any issues with the Branch or the AIIA Secretariat as they transpire. This will help ensure that AIIA can provide informed feedback to government and take steps to refine the policy or practices if necessary.

Whilst Queensland and New South Wales are already using GITC5 and Procure IT, respectively, AIIA continues to be involved as practice and problems emerge. In Queensland, many suppliers have negotiated a set of standard variations, which we hope will become part of the standard terms, without need for further negotiation. In NSW, the use of Procure IT appears to be rather inconsistent and the terms are evolving. AIIA will shortly be seeking input from members so that we can continue to push the government for fairer and more workable terms.

At the national level, AIIA’s Government Business Taskforce is continuing work on liability and intellectual property, but now developing strategies to address our new priorities - common contracting, improved tender processes and improved procurement knowledge. Members will see that AIIA is already ‘turning up the dialogue’ on the need to reduce the vastly disparate terms and conditions faced by ICT suppliers in government markets.

As realists, we don’t expect to achieve the utopia of one Australia wide ICT contract for all governments, but huge savings and benefits can be realised by government and industry through a level of greater consistency.

To get more involved with AIIA’s activities in this area, join AIIA’s Government Business Taskforce. For information, please call
Bridget Larsen on (02) 6281 9412 or via e-mail at b.larsen@aiia.com.au.

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