A small yet valuable tweak to the federal government’s IT procurement rules will help agencies run with agile projects, while also making sure agencies don’t ‘set and forget’ contracts.
The Digital Transformation Agency introduced the changes in its new digital sourcing contract limits and review policy, which will replace its IT capped term and value policy from February 1.
One of the reforms brought about as a result of the IT procurement taskforce, the IT capped term and value policy limited IT contracts to $100 million or three years.
But while the policy capped the value and length of contracts, it only allowed agencies to extend contracts by the length of the original contract.
The DTA said a review of the policy found it “could stifle innovation by not allowing trials and proofs-of-concepts, because extensions could not be longer than the initial term”.
Under the new policy, which like its predecessor will be mandatory, agencies can now enter into contract extensions for up to three years in length.
The new policy also requires that agencies exercise contract extension options only after reviewing a supplier's performance and deliverables, though it is not clear how this requirement differs to the former policy.
“It is clearer [sic] that buyers need to review the performance and deliverables of a contract prior to extending it,” the DTA in a blog post.
“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 key aspects of the former procurement rules such as the joint ministerial exemption, which can be granted by a portfolio minister of the government services minister Stuart Robert, remain in place.
Changes to the procurement rules come just months after Robert floated a fundamental shake-up of the federal government’s IT funding model.
Canberra has long struggled with an IT investment process that has historically favoured big-bang, waterfall-based technology projects over agile delivery methods.
The DTA is currently working with the Finance and Defence departments to “explore different funding models that could be considered in the future to address the current issues”.