The Department of Finance, Services and Innovation (DFSI) is currently undertaking a significant transformation of arrangements for ICT procurement by Government within New South Wales.

Most recently, on and from 1 September 2017, Procure IT version 3.2 became the mandated standard/‘long-form’ agreement to be used by NSW Government buyers for the acquisition of information and communications technology-related products and services.

DFSI has recently indicated that the next phase of the ICT transformation project will be the release of a new ‘ICT Agreement’, which will replace the existing short-form ICT contract for low risk ICT procurements.

DFSI’s recently released discussion paper outlines key aspects of the current proposal. In summary, some of the key proposed changes include:

1. lifting the value threshold for the ICT Agreement from $150,000 to $500,000. The requirement for a particular procurement to be ‘low risk’ will remain. The effect of this will be that Procure IT version 3.2 will be the mandated contract for all ICT procurements that are not low risk or that are valued over $500,000
2. a ‘bottom-to-top’ redraft of the terms of the short form ICT contract, with a view to simplifying its terms and, in particular, avoiding restating the common law and legislation. Significantly, changes are proposed to termination, indemnity and liability provisions and to terms requiring suppliers to comply with NSW Government policy
3. structuring the ICT Agreement into two parts, being the core terms (which apply to all ICT procurements) and a separate solution requirements document (which provides solution-specific requirements). The existing short form ICT contract leaves it to the parties to draft solution specific requirements, whereas the ICT Agreement will provide base terms for specific types of solutions. Draft solution requirement documents for as-a-service solutions and professional services offerings are currently available.

It is important to note that the transformation is designed to benefit suppliers and NSW Government buyers alike, by simplifying the terms of the short form ICT contract and attempting to remove unnecessary contracting hurdles. Suppliers in particular may look favorably at the fact that under the current draft of the ICT Agreement, indemnities are limited to third party intellectual property claims.

DFSI is currently involved in a consultative process relating to the ICT Agreement, involving various industry stakeholders, and we expect that the outcomes of the process will be made known in the near future.