Search

Question: In your experience, are there models you are aware of from sourcing arrangements in other nations or Australian States and Territories we should consider?

10.23 Responses provided references to models such as the NSW Government, United States and United Kingdom sourcing models, which have been considered as a part of this review, with specific reference in Appendix F: International comparisons. 

Question: Is there anything else you'd like to raise that has not been covered in this survey?

10.24 Four key thematics were identified:

• Improved pricing transparency: Responses encourage broader sharing of pricing books and ongoing support costs for the SSAs to support internal decision making and requirements definition.
• Future planning: Responses encouraged the DTA to consider further SSAs for large software companies to streamline the purchasing process through agreed terms and conditions.
• Survey response results: Responses identified that the outcomes from surveys of agencies using the SSAs, including proposed actions should be provided as an update from the DTA.
• Earlier renegotiations: Responses indicate that the timing of negotiations can leave government agencies with limited time to consider their internal position on the arrangements before the establishment of the head agreement. 

Appendix E: Commercially sensitive analysis

Appendix F: International comparisons

United States of America 

Key points

• Given its size, the US Government has an approach to shared services that is based on the influence and will of individuals.
• The large sellers have limited interest in helping with any change as they benefit from the current lack of transparency.
• The underpinnings to future success for the US Government to move towards a posture where it could better leverage its ICT buying power begins with:
  • Better data on where money is currently being spent.
  • Upgrading legacy ICT such that future ICT can provide a stable foundation on which to build shared services that deliver for the public and agencies' missions.
  • Clear authority in a single person to mandate change and for this to succeed that person requires control of the money.
• The issues which did drive changed behaviour in the US Government in the last few years were cybersecurity, and in future years the shift to cloud services and artificial intelligence will continue to drive further changes in behaviour.
• The Government itself must maintain sufficient ICT expertise in its workforce in order to have the capability to validate proposals from the private sector for ICT.
• The Government needs to be prepared to invest money perhaps to the point of temporarily doubling its costs to build digital twins rather than try to cobble together improvements on top of infrastructure - in order to ultimately save money especially through automation.

Context

12.1 Created via the passage of the E-Government Act in 2002, the Federal CIO is a role within the US Government's Office of Management and Budget (OMB) in the Executive Office of the President. It has a small staff and oversees federal technology spending, IT strategy, cyber security and digital transformation to enhance public services and operational efficiency. It has jurisdiction of around 430 departments and agencies and until recently used specialised funds to incentivise desired behaviour from entities against its priorities. Such funds are tailored for ICT modernisation and uplift of services to the public.

12.2 Each department and agency is responsible for its own procurement. Progress against the Federal CIO’s priorities is monitored by the CIO Council which establishes standards against which the success of individual agencies' programs are measured which include optimising Federal Government information resources and investments.

12.3 Other US Government entities also play a role in overseeing procurement:

• The US General Services Administration provides centralised procurement for the US federal government. It has four main roles including “Digital government: A digital government that delivers for the public through trusted, accessible, and user-centred technologies”.
• The US Digital Service was created in 2014 as a technology unit within the OMB. In January 2025 it was renamed as the United States Department Of Government Efficiency (DOGE), although the USDS still exists. Its focus is to promote the use of digital services and improve government websites.
• The Office of Federal Procurement Policy was created by Congress in 1974 and sits within the OMB. Its role is to ensure the efficiency and effectiveness of government procurement.

Key differences

12.4 Given its size, the US Government has an approach which is based on the influence and power of individuals and is completely decentralised. The large departments such as the Departments of Defense, Treasury, Agriculture and Transport can use their size to leverage discounts from sellers, but smaller entities do not get access to these. This can mean there is enormous inequity in costs paid for products and services. Thus the large sellers have limited interest in helping to drive change as they greatly benefit from the current lack of transparency and coordination.

12.5 There is limited meaningful aggregated data on where the US Government is spending its money on ICT products and services. Data collected relies on self-reporting often from personnel without the requisite skills or knowledge. While some progress has been made over recent years, the true knowledge probably sits with the large sellers who have no commercial interest in assisting with transparency.

12.6 The US started the Better Contracting Initiative to meet with sellers and start strategic partnering conversations, however this often ended up being a mechanism for the sellers to gain insight into the US Government’s strategies to use for commercial advantage.

Commonalities with Australia

12.7 Companies like Microsoft are typically engaged through a reseller and the reseller is responsible for landing the Microsoft capability in the agency and supporting implementation. Again, large entities have the capability and capacity to negotiate with resellers, but getting this expertise into smaller agencies is problematic.

12.8 Similar to the Small and Medium Entity procurement pathways introduced by the Australian Government (e.g. the SME exemption within the Commonwealth Procurement Rules), the US has the Small Business Development Program to help small, disadvantaged businesses compete for federal contracts through certification, offering access to sole-source and competitive set-aside contracts, business development assistance, and other benefits. 

What better looks like for the US – according to our interlocutor

12.9 The underpinnings to future success for the US Government to move towards a posture where it could better leverage its technology buying power begins with:

• Better data on where money is currently being spent. The Current Federal CIO, Gregory Barbaccia, called for all agencies to inventory licences they have with Microsoft, Adobe, Salesforce, Oracle and ServiceNow by 2 April with a view to save costs and take advantage of economies of scale for software purchases. This inventory will be extended to all software by 30 April.
• Upgrading legacy ICT such that future ICT can provide a stable foundation on which to build shared services that deliver for the public and agencies' missions.
• Clear authority in a single person to mandate change and for this to succeed that person requires control of the money.

12.10 The issues which did drive changed behaviour in the US Government in the last few years were cybersecurity, and in future years the shift to cloud services and artificial intelligence. These were viewed as platforms which can be leveraged to hasten change.

12.11 The US Government itself must maintain sufficient ICT expertise in its workforce in order to have the capability to validate proposals from the private sector for ICT. 

12.12 The US Government needs to be prepared to invest money perhaps to the point of temporarily doubling its costs to build digital twins rather than try to cobble together improvements on top of infrastructure - in order to ultimately save money especially through automation.
 

United Kingdom

Key points

• The Central Digital and Data Office (CDDO) and Government Digital Service (GDS) drive digital performance, both are housed within the UK Cabinet Office.
• The Shared Services Strategy (launched in March 2021) aims to improve efficiency by consolidating 286 departmental systems into five shared service centres, each using a separate Enterprise Resource Planning (ERP) system. Clusters of like-agencies were formed which considered factors such as technology, scale, complexity, service needs, and historic investments.
• The Chief Procurement Officer role was established in April 2012 with the role later being re-named Government Chief Commercial Officer (GCCO) to reflect an expanded scope of responsibilities. Since its inception, the GCCO role has been pivotal in driving commercial and improving procurement practices within the UK Government.
• The Government Commercial Function (GCF), formally established in 2015, incorporates ~6,000 procurement specialists across departments, supported by a Cabinet Office central team. In recent years it has been responsible for implementing the new UK Procurement Act 2023.
• The UK has centralised functions which focus on digital transformation, shared services, and efficiency, similar to Australian governance structures. These functions are not legislated but derive authority from Westminster system governance.

Context

12.13 Responsibility for improving the UK Government’s digital performance rests with the Central Digital and Data Office (CDDO) and the Government Digital Service (GDS), which are both part of the Cabinet Office. The CDDO, created in 2021, leads the digital, data and technology function of government and is responsible for strategy, standards, and capability development. The GDS, created in 2025, has refocused its role on building products and services that help provide a simple, joined-up and personalised experience of government to the public. However, individual departments are responsible for the day-to-day delivery of their own programmes.

12.14 The extant Shared Services Strategy was launched in March 2021 by the Cabinet Office. The Strategy is focused on creating efficiencies by replacing 286 departmental systems with 5 ERP systems clustered through five shared service centres. The clusters were determined by factors such as existing relationships and departmental characteristics such as technology, size, scale, complexity, service requirements and historic and current investments. The Public Accounts Committee (PAC) reported in 2023 that the 2021 Strategy was underfunded blaming the Cabinet Office for failing to make a proper business case whilst also acknowledging that the Strategy was still on course to save £1.8bn over the next 15 years through modernising back-office systems and moving to cloud-based technology and standardising processes and data. The PAC also reported that the clusters had forecast that they would need an additional £480m of investment after 2024-25 to deliver the full Strategy.

12.15 The position of Chief Commercial Officer (CCO), formerly Chief Procurement Officer is responsible for implementing the UK Procurement Act 2023 which came into force in February 2025. The Act aims to:

• Simplify the bidding processes including a new ‘competitive flexible’ procedure.
• Make commercial frameworks more open, so prospective sellers are not shut out for long periods of time.
• Remove bureaucratic barriers for smaller businesses and voluntary, community and social enterprises so they can compete for more contracts - with strengthened provisions for prompt payment.
• Require public bodies to provide consistent, publicly available, feedback for sellers: a requirement on public bodies to provide bid assessments for final tenders.

12.16 The CCO in the Cabinet Office oversees the Government Commercial Function (GCF) which was formed in 2015 and incorporates around 6,000 people working in commercial roles across the UK Government. In this decentralised model, the commercial teams in departments are supported by a central team, including the Crown Commercial Services within the GCF, providing cross-cutting functional coordination support, as well as specialist services and expert advice on complex transactions, key sellers and market stewardship. This helps to ensure that the Government can effectively leverage its significant scale, benefit from greater efficiency and drive improved value for money from its sellers and the wider supply chain. The Crown Commercial Services have framework agreements, dynamic agreements and strategic memorandums of understanding with companies such as HP, IBM, AWS, ServiceNow and Cisco. Companies such as Microsoft often provide services to government through value added resellers. (A full list of these suppliers is available.) Government departments tend to use central frameworks and rather than run tender process for the following reasons: efficiency and speed, accessing discounts, legal compliance, quality assurance, risk management, HMG Policy Alignment. The GCF also provide Playbooks to guide policy and practice for sourcing and procurement and offer skilling and training in these areas for the rest of government.

12.17 In March 2025 the UK Government announced a £3.25bn Transformation Fund to boost government efficiency and invest in digital and emerging technology such as AI. Some reductions on civil service staff have been made already in the expectation that investment in technology can make the provision of services more efficient.

Key differences

12.18 The UK Government has been working towards improving government efficiency through shared services and centralised procurement arrangements for over 15 years. Whilst success has been mixed and slow, some savings have been achieved and the buying power of the UK Government has been leveraged – particularly around so-called back office functions such as finance, HR etc as they continue to move toward 5 shared service centres. The UK is at an inflection point and this year has strengthened governance of procurement in the Cabinet Office and recognised that the next stage of realising more savings will take concurrent financial investment to take advantage of modern ICT.

Commonalities

12.19 The UK has centralised functions with accountability for driving improved digital transformation, shared services and efficiencies within the Cabinet Office. Like Australia, it has had these functions in some form for many years. These functions are not legislated and are given effect to by the power and governance at the centre of a Westminster system.

What better looks like for the UK – according to our interlocutor

12.20 The UK is improving its ability to share and learn from historical failures – the decade long journey of one ERP process was provided as an example, where the technology was adapted to the business process of individual agencies thus creating bespoke systems with limited interoperability. The UK Intelligence Community (UKIC) has become an exemplar for what may be possible in the broader government, and this has taken time and strong and united leadership to achieve whereby now one team in the UKIC enters into contracts on behalf of the whole UKIC.