Search

Getting the most out of the negotiation

Commercial realities of negotiation

5.71 For context, there are a range of commercial realities the Digital Transformation Agency (DTA), buyers and sellers face when negotiating these arrangements. The below outlines a few of these from each of their perspectives, however, this is not an exhaustive list:

• The technology is critical to deliver to Australians: Although all technologies are not created equal, some of the technology provided by the single seller arrangement (SSA) sellers is crucial for enabling services, infrastructure, and innovation that directly impact Australian individuals and businesses now and into the future.
• Both need each other: Large technology sellers and their buyers rely on each other to achieve mutual goals, whether delivering innovative solutions or maintaining a sustainable partnership.
• Both sides want the best for themselves: Although both buyers and sellers want win-win outcomes, they also engage in negotiations seeking to optimise their own benefits, whether financial, operational, or strategic.
• Australian Government is a valuable customer to the sellers: The Australian Government is highly regarded by technology sellers as a significant buyer, given its strategic importance and purchasing power.
• Negotiations are hard fought: Contract discussions with major technology sellers are often intense, as both parties aim to secure favourable outcomes for their respective interests.
• The SSA sellers are well experienced in negotiating with buyers globally: These multinational technology companies bring extensive experience gained from managing contracts with a diverse range of customers worldwide, necessitating the Australian Government to ensure it has commensurate expertise within its negotiation teams.
• Contracts and associated terms and conditions are complex: Agreements with large technology sellers involve intricate terms and conditions that must address varying legal, regulatory, operational and management requirements across different jurisdictions.
• High switching costs: Opting to change / switch technology typically involves substantial costs (e.g. discovery and design, build / configuration of solutions, reintegration to existing systems, testing, deployment and managing the impact of the change) representing a fiscal barrier to changing technologies.
• Sales cycles in technology sellers tend to drive particular behaviours: Sellers typically focus their resources on securing sales, with service delivery and long-term support often managed separately post-contract.

5.72 In approaching the negotiations, it is acknowledged that the Australian Government SSA negotiators are cognisant of these realities. Within this context, what the DTA prioritises in the negotiations becomes critically important.

What should be prioritised

5.73 A range of key themes emerged, throughout the review, regarding the priorities in negotiating an SSA. These themes were:

Getting the most out of the single seller arrangements (SSAs) once established

Nurturing the strategic partnership

5.142 A successful strategic partnership requires mutual commitment and proactive engagement from both the seller and the buyer. While the SSAs must demonstrate ongoing alignment with the elements outlined within the Fostering strategic partnerships section of this report, buyers also play a critical role in fostering collaboration. This includes maintaining open and transparent communication, ensuring timely decision-making, and actively participating in shared initiatives such as innovation forums and continuous improvement programs. 

5.143 Buyers must also honour their commitments, engage constructively in contract management, and adapt procurement strategies to evolving needs, reinforcing trust and long-term alignment. By demonstrating reciprocity in the partnership, buyers not only secure optimal outcomes but also encourage sellers to invest in sustained value creation beyond the initial contractual terms.

Ensuring access to knowledge, information and education

5.144 Effective utilisation of contractual arrangements depends on ensuring stakeholders have access to clear, relevant, and practical information.

5.145 The key mechanisms identified as available to the Digital Transformation Agency (DTA) to enable this to occur were:

• DTA information sessions: introductory sessions to educate procurement and contract management teams across the Australian Government on what is contained within the SSAs. (The DTA already run these sessions which were noted by those that attended them to have been well run and informative Further, DTA’s recording of these sessions reflects better practice to enable those who were unable to attend the sessions to view later).
• Communities of practice: facilitated by the DTA and significant users of the SSAs, established to share learning and better practices across the Australian Government.
• Information on BuyICT: publishing information for self-serve, on-demand access.
• SSA Handbook: provides a plain English overview of the specific components within a specific SSA, summarising key information for ease of reference by users.
• Direct point of contact: enabling stakeholders to contact the DTA to ask further questions.
• Procurement Bulletins: a procurement focused publication issued monthly by Finance.
• Procurement Centre of Excellence: inclusion of topics of interest for showcasing.
• Participation in governance forums: the DTA has established governance forums for some SSAs, which provide a regular cadence of meetings with the sellers, the DTA and select agencies to share challenges, performance issues and maximise the use of the SSA.

5.146 The information required by buyers and how this is accessed in respect of the SSAs is outlined in the table below:

5.147 The DTA can also play a key role in fostering a probity-safe environment where Commonwealth agencies can engage directly with SSA technical representatives to explore opportunities and challenges. By facilitating structured discussions, the DTA can ensure buyers can collaborate effectively while maintaining transparency and compliance. These interactions allow buyers to better understand seller offerings, get visibility of how other buyers are addressing any common issues, and understand the potential applicability to their specific problems. 

5.148 Further to the Increased administrative burden section within this report, the review heard buyers can find it challenging to know what their obligations are in respect of entering into contracts under the SSA head agreement or specific clauses therein. Greater transparency about the relevant roles and responsibilities in this regard will support the realisation of value from the SSAs.

5.149 These forums could also address challenges identified by survey respondents who stated that there is a need for:

• Increased understanding of the rationale behind decisions relating to the SSAs.
• Enhanced communication and clarity to improve understanding of decision making in the negotiation process.
• Improved pricing transparency through broader sharing of pricing information and ongoing support costs.

5.150 The DTA should drive better realisation of the value of the SSAs through uplifting buyer understanding about the SSAs, by: 

• Making responsibilities between the DTA, buyers and sellers clearer.
• Refreshing the information and education made available to agencies about the SSAs, including any agency obligations.

Improving reporting and transparency

5.151 Effective reporting is central to maximising the value of established contractual arrangements, ensuring transparency, accountability, and informed decision-making. In pragmatic consideration of ‘what gets reported gets managed’, tracking metrics related to contract spend, product and service utilisation, and broader procurement trends are key. Ongoing reporting on contract expenditures and usage patterns allows agencies to assess whether agreements remain fit for purpose, identify areas for optimisation, and ensure that negotiated benefits - such as volume discounts or strategic flexibility - are being fully leveraged. 

5.152 The DTA actively undertake a range of surveys to obtain periodic feedback on the use of the SSAs, including surveys ahead of the renewal of the SSAs to inform contact negotiations. These insights are used to inform continuous improvement.

5.153 The review identified the following in respect of current reporting capability:

• There is poor visibility of whole of Australian Government spends for some of the SSAs, and of the spends by other non-Australian Government buyers, with no single source of truth.
• Discounts realised are difficult to quantify, limiting the DTA's ability to track a key benefit of the SSAs. (Being able to track and measure benefits is a key attribute of the DTA's Benefits Management Policy.)
• There is limited visibility of the use of products or services (e.g. a consolidated list of licences purchased under the SSAs utilised across the Australian Government), limiting DTA's visibility of where value can be further optimised. This ongoing visibility will also support periodic contract reviews, enabling greater traceability of what was initially agreed with sellers comparative to what is actually occurring.

5.154 Improving reporting will also make future negotiation better informed and consistent, with further discussion in the Get timely, accurate data section of this report. By maintaining a structured reporting framework, government entities can proactively manage seller relationships, align procurement with operational needs, and drive continuous improvement.

5.155 In respect of performance reporting of the sellers, the review noted that this is managed mostly at the agency level, with limited overall reporting undertaken by the DTA in respect of the SSAs. In turn, this limits the DTA’s ability to address emerging issues, drive the right outcomes, and monitor the realisation of value from the SSAs.

5.156 Monitoring the aggregate performance of the sellers against the published framework, supported by ongoing feedback from buyers, will provide insight that can assist in ensuring the SSAs remain fit-for-purpose and continue to contribute to achieving value for money. 

5.157 Potential key performance indicators or key result areas which could be implemented are depicted in the following graphic: