On 5 December 2019, Prime Minister Scott Morrison announced new Machinery of Government (MoG) changes, as specified below. In accordance with the Administrative Arrangements Order also announced on 5 December 2019, the MoG changes will take effect from 1 February 2020.

It is important to quickly identify the impact of MoG changes, so business continuity is protected and inefficiency, contracting overlaps, and non-compliance and cost risks are avoided or mitigated. While Commonwealth ICT vendors are experienced (and generally reasonably cooperative) in dealing with MoG changes, they will also be focused on ensuring their contract rights are met.

Reasons affected entities should start to consider the impact of the MoG changes on their technology arrangements include:

• a proactive approach may assist in reducing the risk of having to re-negotiate existing ICT contracts
• a failure to do so may lead to unforeseen costs for the Commonwealth.

It is essential to recognise quickly the impact of changes, identify any legal risks and plan a response to them.

What parts of my entity's technology arrangements will be affected by A MoG change?

MoG changes are likely to affect every possible sort of technology arrangement. For example:

• ICT products - does the software, hardware or cloud service now need to be used by different entities, parts of entities, on different systems, at different sites, for different purposes?
• Telecommunications - what user, network and other devices do you now need?
• Managed services or support services - how will the MoG changes affect the current description and scope of services?
• Configured systems – which entity will now manage the system? Does it need to be moved to new infrastructure?
• Developmental or solution build contracts - do you need to build that new entity-centric solution? Does management of the build process need to move to another entity?

We recommend you consider taking the following steps:

• identify any contracts affected by a MoG change
• identify the contract features that will be affected by change (e.g. user numbers, sites, data storage limits, asset volumes). We can assist you in developing a checklist for this
• work out what impact the MoG change will have (e.g. who is moving where? What impact does this have on the contracts?)
• work with other affected entities (e.g. the entity to which you are moving or which is joining your entity) to determine what is required for the new entity, what are the existing overlaps, and what needs to change? (more users, less users, more sites, higher volumes etc)
• review the contracts for any existing flexibility or MoG process clauses
• work out whether those clauses will work for your identified MoG impact, or at least whether they can be used as a starting point for negotiating with vendors
• work out what alternative flexibility you already have built into the contract (some suppliers may be a party to a whole-of-government arrangement that allows substantial flexibility for transfers of goods/services between entities, but other contracts may be enterprise specific)
• look holistically across your contract suite to consider these issues, whether there is any overlap with any new entity to be merged with yours, how merging entities’ packages of technology arrangements now need to interact, be consolidated, be re-negotiated or be terminated
• develop a plan of action that is designed to facilitate as orderly an approach as possible.