After sustained pressure from AIIA, the Australian Government has issued a guide recommending that suppliers' liability should be capped at appropriate levels when purchasing ICT goods and services.
Last week, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, released the Guide to limiting liability in Information and Communications Technology contracts with Australian Government agencies.
The new Guide recommends that uncapped liability should be required only when it is justified by the size, complexity or inherent risk of a project.
The government’s announcement follows intense lobbying from AIIA since the 2004 release of Better Practice, Better Outcomes, the Association’s report into the effect of government liability policies. The report argued that limiting liability would result in cost savings, improved project management and better project outcomes. Many of the recommendations from the report have been incorporated into the guide.
AIIA’s policy team, together with the Government Business Taskforce, has worked diligently with the federal government to develop a policy that will provide greater opportunities for companies to bid and gain that all-important first government customer.
“This new policy will help many of our SME members, who were previously excluded from the government market due to costly insurance premiums and lengthy negotiations, to enter to this strategically important market,” says AIIA’s Chief Executive Officer, Rob Durie.
The government’s default position of uncapped liability in ICT procurement contracting has been problematic for the industry, both for multinational companies and Australian SMEs. Government contracts are crucial to the growth of many local companies, providing opportunities to work on leading-edge solutions and obtain internationally recognisable reference sites for companies interested in export markets. Government is the largest single ICT market in Australia – the federal government alone enters into around 24,000 ICT contracts per year.
Moving forward, AIIA will be working in other jurisdictions to introduce similar policies for state government procurements. The Commonwealth, Victorian and West Australian governments now have default capping policies and AIIA is hopeful that the Australian Government’s new guide will provide a successful example for other governments to follow.
“It is vital that governments recognise the value of an industry that contributes 4.6 per cent of the nation’s Gross Domestic Product – more than the contributions made by the agriculture, forestry and fishing, defence and education sectors and almost as much as the mining sector,” Mr Durie says. “Changes to limitations on liability will provide AIIA member companies with more business opportunities and will help Australia to develop a more globally competitive ICT industry.”
This major policy breakthrough would not have been possible without the contributions of AIIA’s member companies. "Our member companies' investment in the Association is vital for us to continue to improve the operating environment for ICT businesses in Australia," Mr Durie concludes.
For more information on the Australian Government’s new liability policy, visit AIIA’s website www.aiia.com.au