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Chapter 6: Other opportunities

Chapter overview 

Given the review engaged with a broad range of stakeholders across government agencies, existing single seller arrangement (SSA) sellers, industry bodies and representatives from other jurisdictions nationally and globally, there is value in acknowledging the broader opportunities and insight gained through these consultations.

Additional improvement opportunities to help ensure SSAs remain fit-for-purpose, deliver value and support the Australian Government's digital transformation agenda, are outlined here. 

• There is opportunity for the Digital Transformation Agency (DTA) to consider its operating model in relation to the SSAs, particularly with regards to how it organises itself most effectively in relation to the SSA life cycle.
• Stakeholders identified discrepancies in the terms and conditions between SSAs and the procurement panels / marketplaces and highlighted improvement in this area could prevent challenges in post-procurement contract closure.
• The way in which the SSAs are publicly represented (e.g. on Finance’s Coordinated Procurement website) and the terminology “Single Seller Arrangement” is adding to confusion about the intent of the SSAs. This could be addressed by updating the relevant content and terminology to better reflect their intended purpose.
• There is an opportunity to assess how the funding model can better enable consistency and ease of scalability of the SSA model.
• The use of seller marketplaces (e.g. Azure Marketplace) risks inconsistency with the Commonwealth Procurement Rules, despite being a key potential avenue to support the Australian Government in keeping pace with dynamic changes in the technology market. The use of these marketplaces require confirmation with Finance. 

Aligning panels and single seller arrangements (SSAs)

6.7 Some sellers and buyers identified discrepancies in the terms and conditions between the SSA and the procurement panel / marketplaces, creating challenges in post-procurement contract closure. 

6.8 As buyers typically default to the panel terms and conditions when engaging in procurement, misalignment with SSA terms and conditions could lead to gaps in contract execution, requiring additional adjustments to reconcile differences. Addressing these inconsistencies will strengthen contract transparency, facilitate smoother procurement processes, and ensure buyers have a clear understanding of seller obligations. Engagement with Finance also indicated SSA sellers effectively respond to a request for quote (RFQ) under a panel aware they are subject to a differing set of terms and conditions (i.e. those per the SSA) compared to those under the panel. Yet all other tenderers will respond under the terms and conditions outlined under the panel. This means the response and subsequent evaluation is undertaken under different pretences, however, the materiality of these are subject to the RFQ being undertaken. Further, the review noted other sellers can:

• Include any departures from the terms and conditions included in the request for tender / quote as per standard market practice.
• Negotiate their contract, and specific terms and conditions, if they are successful following evaluation.

6.9 Further, a mapping of SSA contractual clauses to panel clauses will highlight key differences to aid agency decision-making prior to approaching the market. This comparative analysis would provide buyers with critical insights into the implications of selecting an SSA seller, ensuring they understand how contractual obligations may differ from standard panel arrangements. 

6.10 The Digital Transformation Agency (DTA) should address the differences in terms and conditions between panels and SSA contracts, for example, by making available a list of key points of difference.

Updating key websites and branding

6.11 Ensuring accuracy and clarity in publicly available procurement and contractual information is essential for effective engagement with government arrangements. 

6.12 A fundamental distinction exists between SSAs and procurement mechanisms, yet this difference is sometimes conflated in publicly accessible resources. Maintaining consistency helps with transparency. Examples of information sources requiring alignment to reflect the appropriate categorisation of SSAs as standing orders are Department of Finance whole of Australian Government panels content, AusTender Standing Order Number listings, and BuyICT information.

6.13 Additionally, the DTA manages a range of arrangements, including both SSAs and panels, which could benefit from clearer differentiation to support understanding. Of note, the SSAs differ from other Coordinated Procurements in that, broadly, there is not an active market for the specific products provided by most of the SSAs. This is distinct to the other panels with a single seller in place, all of which are services based and have established competitors in the market. It is important the classification of SSAs on the Coordinated Procurements website reflects their actual function, to prevent misconceptions about their purpose and usage (i.e. for use following a procurement activity, rather than as a procurement pathway).

6.14 Collaborating with Finance, the DTA should refresh the publicly available content on SSAs to correctly reflect them as a contracting framework, including how SSAs are reflected on Finance’s Coordinated Procurement website.

6.15 Further, it is apparent from stakeholder engagement that the terminology “Single Seller Agreement” is creating confusion in the market about the intent of the SSAs. The DTA can address this by updating the names of “Single Seller Agreement” and “Volume Sourcing Agreement” to reflect their true intended purpose, which is a whole of Australian Government contracting framework.

6.16 The DTA should rename the “Single Seller Arrangements” to reflect the reality of the use of the SSAs as a contracting framework.

Funding model complexity

6.17 The funding model in place in respect of the SSAs is complex, made up of:

• Departmental funding: provided annually to the DTA as part of the Commonwealth budget process.
• CAF: the fee set by the DTA to recover the costs of administering the SSAs.
• CRF savings fee: the fee collected and returned to the Consolidated Revenue Fund; this does not contribute to the administration of the SSAs.

6.18 The table below outlines the applicability of these fundings sources to the respective SSAs.

6.19 To further complicate this, the charging scales across the SSAs are dependent on the specific agreement type with a particular SSA, as depicted in the table below:

6.20 These inconsistencies within this funding model introduces: 

• Administrative inefficiency for the DTA in having to manage various differing arrangements, making processes unnecessarily complex.
• Complexity for buyers, as the arrangements are not consistent, meaning agencies have to understand a different financial model for each arrangement.
• Potential competitive inconsistencies, whereby SSAs are competing with each other, but are subject to differing fees and impacts on the total cost of ownership for the buyer.

6.21 Survey respondents identified the need for further clarity of the fees and recovery charges, supporting the challenges identified above.

6.22 The DTA is responsible for the ICT Coordinated Procurement Special Account, which was established by a Determination (PGPA Act Determination (Establishment of ICT Coordinated Procurement Special Account 2017)) that enables expenditure on the administration of the SSAs, including:

• Planning and conducting SSA tenders.
• Managing the SSAs.
• Providing assistance to Commonwealth entities.
• Monitoring and reviewing the SSAs.

6.23 DTA also noted the Determination will sunset 1 October 2027. Ahead of this, agreeing a clear pathway forward with Finance will enable the implementation of a suitable funding and fees model, which reflects the common financial management better practices implemented by Finance and other agencies in respect of cost recovery. Implementation of an updated funding model could occur progressively as the SSAs are renewed or closed, or additional SSAs are established. It should be noted that Finance have indicated any changes to the Special Account will require agreement from the Finance Minister (issued pursuant to sections 78 to 80 of the PGPA Act). 

6.24 The DTA should, when the SSA funding model is up for renewal, simplify the funding and fees model and make it more consistent.

Use of seller marketplaces

6.25 There are two marketplaces which have been established by the SSA sellers: Microsoft’s Azure Marketplace and the AWS Marketplace. The establishment of these marketplaces represents a potential opportunity to enhance how government procures digital products and services. 

6.26 Under these marketplaces, sellers can self-list, agree to specified terms and leverage pre-existing arrangements. A key advantage of the marketplace model is that providers can come and go dynamically, enabling the marketplace to quickly and easily keep pace with the changing technology environment. 

6.27 Although these marketplaces offer value in market scanning to understand potential solutions, and are being used by buyers within the Commonwealth, their use to procure or transact in alignment with procurement policy requires consideration.

6.28 Factors of relevance to these marketplaces noted by the review were:

• To utilise the seller marketplaces, buyers must approach the market in accordance with the CPRs, which require either Open Market approaches using AusTender, use of a suitable Limited Tender provision or use of an established panel.
• Where changes are required to a contract under the seller’s marketplace, these changes will have to be negotiated by the buyer on a case-by-case basis. Panels (e.g. DMP2) are established with standard contractual terms and conditions to make this more efficient for the buyer.
• Any contracts implemented using the seller contract templates offered on the sellers' marketplace may not be fit-for-purpose or reflect the model contract clauses (for example, per Resource Management Guide 420 Mandatory use of the Commonwealth Contracting Suite for procurement under $200,000, subject to the relevant exemptions within this guide), resulting in gaps or vulnerabilities. These gaps or vulnerabilities must be assessed by buyers prior to entering the contract. 

6.29 Insights from engagement with stakeholders indicated buyers are unaware of, or at times confused about, the appropriate means of using these seller marketplaces. This is further complicated by the existence of the DTA's marketplaces. 

6.30 The DTA should engage with Finance to review the ongoing appropriateness of the use of seller marketplaces (i.e. Azure Marketplace and AWS Marketplace).