In 2019, we asked for help to review the ICT Contract Capped Term and Value Policy. Buyers across government as well as digital sellers from the ICT industry contributed to the review.

As a result, the new Digital Sourcing Contract Limits and Reviews Policy replaces the ICT Contract Capped Term and Value Policy on 1 February 2020.  It joins the other policies under the Digital Sourcing Framework that are mandatory for most of the Australian Government (non-corporate Commonwealth entities).

The new policy improves flexibility with two key updates to extension options under the policy. 

• Extensions can now be any length up to 3 years. We heard the previous policy could stifle innovation by not allowing trials and proofs-of-concepts, because extensions could not be longer than the initial term.
• It is clearer that buyers need to review the performance and deliverables of a contract prior to extending it.  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.

Other limits  in the Digital Sourcing Contract Limits and Reviews Policy stay the same:

• The whole-of-life cost of each contract may not exceed $100 million. 
• The initial term cannot be longer than 3 years.

You can read the full policy here.