Article by Kent Davey and Paul Gleeson

Contents

  • Key Points

  • Background

  • Model ICT Contracts

  • Conclusion

Key Points

  • The Australian Government Information Management Office (AGIMO) has released three draft model information and communications technology (ICT) contracts for comment.

  • The model ICT contracts are intended for use by Australian Government agencies and their suppliers.

  • The model ICT contracts provide useful guidance for all organisations on the development of sound commercial agreements for the purchase and supply of ICT products and services.

  • The model ICT contracts are available at http://www.finance.gov.au/SourceIT/

Background

As part of the Commonwealth Government Information Technology and Communications (GITC) framework, GITC version 4 (GITC4) was released in 2001. GITC4 is a framework of standard legal documentation designed to assist Australian Government agencies and their suppliers develop contracts for the supply of a wide range of ICT products and services.

Since the release of GITC4 there have been many changes to the procurement arrangements that apply to Australian Government agencies. In November 2005, the Commonwealth Government announced that the GITC framework would be redeveloped to simplify and reduce the cost for suppliers of contracting with Australian Government agencies.

Model ICT Contracts

As the first stage of redeveloping the GITC framework AGIMO has released for comment the following three draft model ICT contracts (Model ICT Contracts) together with accompanying user notes:

  • Hardware Acquisition and Maintenance Contract

  • Licence and Support Contract - Commercial off-the-shelf Software

  • IT Consultancy Services Contract

The Model ICT Contracts are intended to be used as templates for the efficient and effective development of sound commercial agreements which encourage sound business practice and minimise the risk of disagreements between Australian Government agencies and their suppliers.

The Model ICT Contracts are only intended to be used for simple ICT procurements (e.g. purchase of standard services or "commercial off-the-shelf" items) where:

  • the level of risk is minimal;

  • there are no or minimal alterations to the standard terms and conditions;

  • no development of the products and/or services is required to be undertaken prior to acceptance;

  • the contract price will generally only be required to be paid after delivery and/or acceptance of the products and/or services; and

  • specialist legal, contractual, technical or financial advice is not likely to be required.

Model Hardware Acquisition And Maintenance Contract

The model Hardware Acquisition and Maintenance Contract (Hardware Contract) is only intended to be used for the supply of hardware and hardware maintenance services. The Hardware Contract's provisions differ from the GITC4 hardware supply and hardware maintenance provisions in that they expressly deal with:

  • removal of equipment;

  • additional hardware warranties;

  • implementation of engineering changes and upgrades;

  • performance measurement and monitoring tools; and

  • service rebates.

Model Licence And Support Contract - Commercial Off-The-Shelf Software

The model Licence and Support Contract - Commercial off-the-shelf Software (Software Contract) is only intended to be used for the licensing, installation, support and maintenance of standard commercial off-the-shelf software products. The Software Contract's provisions differ from the GITC4 software licensing and support provisions in that they expressly deal with:

  • the use of the licensed software by an outsource supplier;

  • open source software;

  • additional software warranties;

  • additional software support obligations;

  • performance measurement and monitoring tools; and

  • service rebates.

Model IT Consultancy Services Contract

The model IT Consultancy Services Contract (Consultancy Contract) is only intended to be used for the supply of IT consultancy services. The Consultancy Contract's provisions differ from the GITC4 consultancy services provisions in that they expressly deal with:

  • additional service warranties; and

  • performance assessment.

Model ICT Contract General Provisions

All three Model ICT Contracts contain the following general provisions which also significantly differ from the equivalent provisions contained in GITC4:

  • payment;

  • GST;

  • indemnity;

  • liability;

  • confidentiality;

  • privacy;

  • security;

  • audit;

  • access;

  • dispute resolution; and

  • termination.

Conclusion

AGIMO is seeking comments on the Model ICT Contracts before releasing final versions in late June 2006. The Model ICT Contracts provide useful guidance on developing sound commercial agreements for not only Australian Government agencies and their ICT suppliers but also for other organisations which purchase or supply ICT products and/or services.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.