New policy seeks flexibility for innovative proof-of-concepts, end to ‘set and forget’ contract extensions Credit: Mlenny / Getty Images A change to a Australian government ICT procurement policy will allow contract extensions to exceed the length of an initial deal, but also make sure there’s no default “set and forget” approach by departments and agencies. The Digital Transformation Agency (DTA) has unveiled details of its new Digital Sourcing Contract Limits and Reviews Policy, which replaces the ICT Contract Capped Term and Value Policy. The updated policy takes effect on 1 February and sits under the broader Digital Sourcing Framework; the policies contained in the framework are mandatory for most Commonwealth entities. A blog entry published on the DTA site said that under the new policy, contract extensions can be up to three years. Previously, extensions could not exceed the length of the original contract. “We heard the previous policy could stifle innovation by not allowing trials and proofs-of-concepts,” the DTA explained. A new requirement is that an extension is only allowed after a contractor’s performance and deliverables are reviewed. “It is clearer that buyers need to review the performance and deliverables of a contract prior to extending it,” explained the blog entry. “We are making sure there is no default ‘set and forget’ in our digital sourcing contracts so we aren’t left with old technology or solutions that aren’t working.” As was the case under the previous policy, a contract must not exceed $100 million over the course of its life, including all extensions, and the initial length of the contract cannot exceed three years. There are a range of exemptions possible, however. One is a joint exemption granted by the relevant minister as well as the minister for government services. That requires an entity demonstrates “a special need for an alternative arrangement and their exemption request must be premised on a genuine intent to meet the policy requirements,” states the policy. An exemption is also possible under section 2.6 of the Commonwealth Procurement Rules (CPRs): “These CPRs do not apply to the extent that an official applies measures determined by their Accountable Authority to be necessary for the maintenance or restoration of international peace and security, to protect human health, for the protection of essential security interests, or to protect national treasures of artistic, historic or archaeological value.” The other category of exemption is for purchases made from the mandatory categories of the digital whole-of-government panels (which include data centre space and services, the hardware marketplace, the telco services panel, and the mobile panel). The federal government in 2017 said that it would revamp ICT procurement, including by capping contracts to $100 million and three years. As part of the establishment of Services Australia as a successor to the Department of Human Services, the DTA was moved to the new department. New administrative arrangements announced in May 2019 formally gave Services Australia responsibility for whole-of-government IT. Related content feature 4 remedies to avoid cloud app migration headaches The compelling benefits of using proprietary cloud-native services come at a price: vendor lock-in. Here are ways CIOs can effectively plan without getting stuck. By Robert Mitchell Nov 29, 2023 9 mins CIO Managed Service Providers Managed IT Services case study Steps Gerresheimer takes to transform its IT CIO Zafer Nalbant explains what the medical packaging manufacturer does to modernize its IT through AI, automation, and hybrid cloud. By Jens Dose Nov 29, 2023 6 mins CIO SAP ServiceNow feature Per Scholas redefines IT hiring by diversifying the IT talent pipeline What started as a technology reclamation nonprofit has since transformed into a robust, tuition-free training program that seeks to redefine how companies fill tech skills gaps with rising talent. By Sarah K. White Nov 29, 2023 11 mins Diversity and Inclusion Diversity and Inclusion Hiring news Saudi Arabia will host the World Expo 2030 in Riyadh By Andrea Benito Nov 28, 2023 4 mins Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe