ICT Contract Capped Term and Value Policy

As of 1 February 2020, the Digital Sourcing Contract Limits and Reviews Policy has replaced this policy. For contracts signed 23 August 2017 through to 31 January 2020, you will need to continue to apply the ICT Contract Capped Term and Value Policy below.

[toc]

DTA circular number: 2017/001

To all non-corporate Commonwealth entities (NCCEs) subject to the Public Governance, Performance and Accountability Act 2013 (PGPA Act):

Effective 23 August 2017 all NCCEs must limit any new information and communications technology (ICT) contract to not exceed $100 million (ex GST whole-of-life cost) per contract or 3 years initial term.

Exemptions from this policy can only be granted jointly by the requesting NCCE’s portfolio minister and the Minister for Government Services when an NCCE can demonstrate a special need for an alternative arrangement.

Contracts that will automatically be exempt from this policy are those:

• where the overall procurement applies paragraph 2.6 of the Commonwealth Procurement Rules (CPRs) and/or

• subject to paragraph 4.9 of the CPRs (whole-of-government ICT coordinated procurements)

Key points:

• All NCCEs are required to comply with the ICT Contract Capped Term and Value Policy.

• Corporate Commonwealth entities (CCEs) subject to the PGPA Act are encouraged to apply this policy.

ICT Contract Capped Term and Value Policy principles

The policy complements the CPRs in their entirety, and directs entities to comply with the following core principles.

Principle 1

Australian Government ICT procurement process must encourage competition and consider the potential benefits of having a larger, more competitive supplier base.

Principle 2

Extension options must not be exercised without having first undertaken a review of the contractor’s performance and/or deliverables in accordance with the contract. Each extension option must not exceed a contract’s initial term.

Principle 3

Entities’ contractual commitments must be consistent with paragraphs 4.7 and 4.8 of the CPRs.