Defence Materiel Organisation calls for industry comment: E-Alert September 2010

The Commonwealth Defence Materiel Organisation (DMO) has released an Exposure Draft of a proposed Contract Template Selection and Tailoring Guide, and has invited industry to comment.

This document will assist Commonwealth procurement personnel to select the correct contract template for the procurement of equipment and services for the Australian Defence Force.

Given the extensive array of potential template agreements available for use by the Commonwealth – not only ASDEFCON templates but also across the Commonwealth more broadly, if appropriate – the document fills an important role.

There are two key issues coming out of this document that industry should be aware of.

IT Services

The Guide states that simple IT goods and services will not be procured using ASDEFCON templates. Commonwealth officers are instead pointed in the direction of the Government Information Technology and Communications (GITC) standard agreement for such procurements.

The GITC agreement will be familiar to any organisation that has provided IT services to Commonwealth, State and Territory governments.

Procurements that include an IT component as part of a larger system acquisition will continue to be made under the relevant ASDEFCON template contract.

No mention is made in the draft Guide as to whether DMO will embrace moves afoot in other government agencies to introduce the SourceIT standard contracts in place of GITC.

Limitation of liability 

A key task of the Guide is to direct Commonwealth officers to the correct contracting templates and processes based on a number of relevant criteria. One of the relevant criteria is whether the supplier will be permitted to cap its liability.

If a supplier is seeking to limit its liability contractually, the Guide requires the procurement to be treated as a complex procurement. This has implications mainly for DMO's own internal approvals and delegations. For suppliers, the potential downside is that classification as a complex procurement may have the potential to slow down the procurement process.

Commenting on the draft Guide

We would be very happy to assist any client wishing to make submissions to DMO in response to the draft Guide. The Exposure Draft and an email contact for submissions can be accessed on DMO's website at the following link:

http://www.defence.gov.au/dmo/DMO/function.cfm?function_id=45

Our technology and defence procurement lawyers are very experienced in advising on GITC (and Source IT) based government IT contracts and would be happy to assist in this regard also.

Defence Procurement Policy Manual

Finally, clients should note that a revised Defence Procurement Policy Manual (DPPM) has been released by DMO.  The current version of the DPPM is available here:

http://www.defence.gov.au/dmo/gc/dppm.cfm

If you require any further information, please click here to contact a member of our Information Communications & Technology team.