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Core Literacy, Experience and Culture

Corporate boards have moved away from an emphasis on stakeholder representation to skills based composition. Project boards should also look past stakeholder representation to consider the skills and capabilities that members contribute. Board members should include external members, and be chosen for their authority, expertise, experience, status and connection ⁽¹¹⁾,  focusing on people who:

• are authorised to represent the interests of the area they represent;
• can provide necessary resources; and
• are committed to the project outcomes.

Project boards rarely have the time or luxury to be able to develop complete knowledge of all aspects of any project. Some literacies can readily be taught, helping board members know what to look for and the questions to ask. Project board training can help rapidly develop core literacies.

Other board member capabilities are developed through years of experience. We differentiate between SROs’ and board members’ digital project, (Table 4) the collective experience the board should contain, (Table 5) and the culture, attitude and behaviours that needs to be established for a digital project board to be effective.

Core Literacy capabilities

Foundational literacy all project board members should have:

Benefits and outcomes

Understanding of benefits management processes, and the relationship between outputs and outcomes, benefits and value

Communication in the context of change

Understanding the importance of a project narrative, creating a culture of
transparency, stakeholder identification, constructive conflict and feedback loops

Project management foundations

Understanding of key project management concepts, giving the board the ability to question aspects of the project lifecycle, critical path, earned value, burn rate and baseline

Core Experience skills

The expertise needed on the Board should be guided by key areas of risk, both enterprise and project delivery.

Common expertise requirements for Digital Project Boards:

Business expertise

Understanding of the business, impacts and change required for end users, allowing the board to maintain sight of the business logic of the project

Operations expertise

Understanding of the operational environment to ensure the solution is integrated,
maintainable and sustainable within the existing IT applications portfolio

Digital project management expertise

Understanding of digital projects, their lifecycle, risks, ideally with experience in a similar type of project (e.g. AI, Software as a Service (SaaS), risk tier)

Interpersonal skills and social capital

Strong networks and relationships that support negotiation, decision-making, issue resolution, stakeholder management, effective communication and resourcing5,

Digital, data and cyber expertise

Depending on the project type and stage, deep technical expertise may be required

Legal and policy

Depending on the project type and stage, regulatory and policy expertise may be required

Procurement and contract management

Depending on the project type and stage, expertise in procurement and contract management may be necessary

Independence

Balancing the need for vested interests, ensuring there is someone who can view the project and its progress objectively and independently

Supplier expertise

Depending on the project, experience and knowledge of the product, implementation approach and supply chain

Interdependencies

Knowledge of areas the project has interdependencies with, for example, resourcing, systems integration

Employee/customer experience

Expertise in ensuring a solution is well suited to the needs of the users of project deliverables

Change management expertise

Experts in communicating and designing organisational change, reducing resistance and increasing uptake of change

Financial expertise

Depending on the complexity, size, risk and procurement strategy of the project

Culture, Attitude and Behaviours

Attitudes and behaviours required on project boards:

Skin in the game

Members should have a genuine interest, commitment and ownership of the project’s success28

Psychological safety

Boards need to foster a no-blame environment where people feel safe with constructive conflict, raising ideas and escalating issues ^{(23, 41)}

“Can do” agency

Board membership is not a passive role. Members should take action to ensure they have the right information to support decisions and proactively identify strategies that enhance project success ⁽²³⁾

Time commitment

Board members often underestimate the time involved. Members must ensure they are suitably informed, attending meetings and prepared to support decision-making^{(11, 23, 42)}

Courage

Courage to stop a project, escalate risks or reset the project if the project does not have sufficient business justification and/or delivery confidence is low ^{(1, 25)} 

Attendance

Continuity in core board membership facilitates historically informed decision-making. Use of deputies or proxies should be avoided as it signals a lack of commitment, dilutes accountability and can delay decision-making ⁽¹¹⁾.
Members should not attend just to report to others ⁽²⁸⁾.

Decision expediency

Boards need to make decisions escalated to them in a timely manner, possibly despite incomplete information. Decisions should be clear and prioritise action ^{(23, 43)}.

Value-focused

Boards should suspend self-interest and operate from a position of what is best for the organisation and project, optimising value from the project investment

Empowering

The project board can make the decisions it needs to so that the project is empowered to deliver

Humility

Openness to learning and adaptation – seeking robust advice from independent advisors and project assurance, seeking out lessons learned from similar projects, listening to user and reference groups, acting on recommendations ^{(1, 44)}.

Overview

1. The Digital Seller Underperformance Policy (Policy) supports the Australian Government and digital Sellers to jointly improve outcomes on Strategic Digital Contracts.
2. This Policy is intended to encourage strong contract performance by Sellers, and to identify and record instances of serious underperformance from Sellers. This will support proper use of the Government's investment of public funds in digital projects. This Policy applies to 'Strategic Digital Contracts' which are defined as:
   1. contracts to procure digital products and services valued at $4 million (whole-of-life contract value and GST exclusive) or more (Threshold); or
   2. other contracts determined by the DTA to be Strategic Digital Contracts. This may be in contracts valued below the Threshold but are considered by the DTA to be strategically significant in the delivery of digital products and services to or on behalf of the Australian Government.
3. The DTA has whole-of-Government responsibility for managing strategic coordination and oversight functions for digital projects, including during the planning and delivery phases.
4. Digital projects are those that use digital products and services as the primary lever for achieving outcomes and benefits to:
   1. transform the way people and businesses interact with the Australian Government; and
   2. improve the efficiency and effectiveness of Australian Government operations, including through automation.
5. The DTA will apply this Policy to:
   1. make decisions about whether a Seller's performance is an instance of a 'serious underperformance' under a Strategic Digital Contract and record the underperformance of Strategic Digital Contracts: and
   2. provide information on these contracts to Australian Government agencies making digital procurements (Agencies), to assist them with making informed procurement decisions.

6. Under this Policy the DTA will only identify and record instances of 'serious underperformance', which means:

   1. instances of significant deficiencies in performance of any substantive requirement or obligation of a Seller under a Strategic Digital Contract;
   2. Sellers that are subject to bankruptcy or insolvency; or
   3. Sellers who have made false declarations.

   This approach is consistent with the Commonwealth Procurement Rules, including Rules 4.5 and 10.17.

7. Where the DTA verifies serious underperformance by a Seller, this information will be held by the DTA and made accessible to Australian Government Agencies to inform their procurement processes.

Purpose

8. The purpose of this Policy is to drive performance improvement on a whole-of-Government basis, by creating stronger incentives for Australian Government Buyers and digital Sellers to resolve underperformance and jointly improve digital project performance.
9. This Policy will also assist the DTA to give Ministers and stakeholders confidence that digital projects (supported by Strategic Digital Contracts) are being designed well and are optimised to deliver value for the Australian Government, by achieving their project objectives.
10. This Policy will be periodically reviewed and updated by the DTA to adapt to changing market conditions, technological advancements, and feedback or consultation with Buyers, Sellers and other relevant stakeholders. Reviews will consider the effect of the Policy on Buyers and Sellers.

Application of Policy

11. Under this Policy, Sellers with Strategic Digital Contracts (Sellers) may be recorded as having 'confirmed serious underperformance' status in circumstances of verified serious underperformance.
12. Commonwealth buyers of Strategic Digital Contracts (Buyers) will be able to report information to the DTA if the Buyer considers a Seller has demonstrated serious underperformance. This includes Buyers that are:
    1. Non-corporate Commonwealth entities; and
    2. Corporate Commonwealth entities for the purpose of the Public Governance, Performance and Accountability Act 2013 (Cth)
13. This Policy applies to Strategic Digital Contracts entered into from the commencement date of the Policy.
14. The DTA will first review Buyer reports of serious underperformance. The DTA will then engage with the Buyer to seek further information on the reported serious underperformance. The DTA will also invite Sellers to provide information on the reported serious underperformance. Details of this process are set out further below.
15. If, after engaging with both the Buyer and Seller, the DTA is satisfied that the information provided supports an assessment that the Seller has seriously underperformed a Strategic Digital Contract, it will record the Seller on its Confirmed Serious Underperformance (CSU) Register as having 'confirmed serious underperformance' status.
16. The DTA will make information on Sellers that have 'confirmed serious underperformance' status available to Australian Government Agencies procuring digital products and services during the tender evaluation process. Agencies will need to provide evidence of their procurement process and will be able to:
    1. access information held by the DTA about a Seller's serious underperformance; and
    2. use this information in accordance with procurement policy when assessing the Seller's performance history for relevant digital procurement(s). As a Seller's status on the CSU Register can change over time, information obtained from the DTA under paragraph 16.a of this Policy should only be used by Agencies to assess current digital procurements.
17. The DTA's Digital Marketplace Panel 2 (DMP2) also has a Performance Management Framework (PMF), which operates separately to this Policy. The PMF only applies to all digital procurements from the DMP2. However, this Policy only applies to Strategic Digital Contracts as defined above (including but not limited to any contracts entered under DTA panels, such as the DMP 2, that meet the Threshold). The DTA will ensure alignment between this Policy and the PMF as required.
18. The DTA will document its process and governance guidance to ensure Sellers are treated fairly and that the principles of probity are applied when:
    1. assessing and making determinations on reports of serious underperformance; and
    2. using serious underperformance information within the Australian Goverment.
19. Buyers remain fully responsible for their own procurement and contract management. This includes instances of underperformance, regardless of the value of the contract. This policy also does not limit the Buyer's rights under its Strategic Digital Contract with an impacted Seller.

Feedback that can be included in the CSU Register

20. Buyers should confirm all the facts and circumstances to support their report(s) of a Seller's serious underperformance issues with a Seller. Before reporting serious underperformance to the DTA, Buyers should first attempt to address serious underperformance issues with the Seller, in accordance with the contractual mechanisms for managing performance that apply to the project. Buyers should also obtain legal advice to assist with managing serious underperformance, as required.
21. After raising the serious underperformance issues with the Seller, Buyers can provide information to the DTA (even if the matter was resolved) relating to one or more of the following types of serious underperformance:
    1. failure to meet contractual requirements;
    2. failure to meet contracted schedule;
    3. failure to deliver within the contracted budget;
    4. failure to meet agreed performance standards;
    5. failure to invoice correctly (e.g., in accordance with agreed pricing or billing incorrect number of hours);
    6. failure to provide properly qualified and experienced personnel or the required number of personnel;
    7. failure to meet security obligations;
    8. failure to comply with the Commonwealth Supplier Code of Conduct¹;
    9. failure to comply with a Procurement Connected Policy²;
    10. failure to satisfactorily resolve contract performance issues;
    11. aggregated failures under more than one Strategic Digital Contract. Instances of underperformance across several Contracts may be reported by Buyers. This could be where the aggregate value of the Contracts is $4 million or more, or where the DTA determines that the contracts, taken together, are Strategic Digital Contracts;
    12. aggregated incidents of minor underperformance by the same Seller across multiple agencies as reported to the DTA;
    13. bankruptcy or insolvency of the Seller;
    14. making of false declarations by a Seller; or
    15. where a matter affecting a Seller is a 'Significant Event'³.
22. When the DTA receives a serious underperformance report, the DTA will contact the Buyer within 10 business days to discuss the report. If needed the DTA will request further information from the Buyer to support the report.
23. Matters that are currently subject to formal investigation by Buyers or other authorities, such as allegations of fraud or serious misconduct, cannot be reported under this Policy. These matters may be notified to the DTA through a separate process, if adverse findings are made against the Seller following the completion of such investigations. This includes circumstances where legal proceedings are initiated in relation to the conduct.
24. Division 137.1 of the Criminal Code makes it a serious offence to knowingly provide false or misleading information to a Commonwealth entity.

Seller's right to respond

25. Following discussion with the Buyer to obtain further information on the report of serious underperformance, the DTA will contact the Seller and provide the Seller with details of the report. The Buyer should have already engaged with the Seller on the reported serious underperformance issues.
26. The Seller will have 15 business days to respond to the DTA.

27. If:

    1. no response is received from the Seller; or
    2. an unsatisfactory response is received from the Seller, which fails to meaningfully engage with the report of serious underperformance,

    the Seller will be included in the CSU Register as having 'confirmed serious underperformance' status.

28. The DTA may allow a Seller to respond in more than 15 business days, if the Seller satisfies the DTA that there are circumstances that justify an extension of time.
29. If the Seller disagrees with the report, the Seller must provide further information to the DTA to support its position (including evidence of remediation of the issues identified in the report). The DTA will discuss this with the Buyer and provide the Buyer with an opportunity to review its report considering the Seller's response. Following this, the DTA will decide whether to include the Seller in the CSU Register as having 'confirmed serious underperformance' status.
30. The DTA will act fairly and impartially in determining whether a report is properly substantiated, so as to record a Seller as having 'confirmed serious underperformance' status. The final decision to record a Seller as having 'confirmed serious underperformance' in the CSU Register will be made by the Deputy CEO of the DTA.
31. The DTA will also take into consideration receipt of more than one serious underperformance report from different Buyers in relation to a Seller, when determining whether to record a Seller as having 'confirmed serious underperformance' status. This includes previous reports where the DTA did not determine at that time that the Seller's conduct was 'serious underperformance' for the purpose of this Policy.

How feedback can be used

32. When a Seller is included in the CSU Register as having 'confirmed serious underperformance' status, Australian Government Agencies will be able to access this information from the DTA when they conduct a digital procurement for a Strategic Digital Contract (during the tender evaluation process). Agencies will need to provide evidence of their procurement process (i.e., confirmation that a Seller has submitted a response to a request for digital procurement) before gaining access to a Seller's status and underperformance information under this Policy.
33. During the tender evaluation process, this will enable Agencies to consider information about the Seller's serious underperformance as part of the Seller's performance history, including when assessing value for money and risk of relevant tenders from the Seller.
34. This Policy does not prohibit Agencies from engaging Sellers on the CSU Register – a Buyer may choose to engage a Seller on the register.
35. Buyers procuring new Strategic Digital Contracts must consult with the DTA about a Seller's underperformance history.

36. The Commonwealth Procurement Rules (CPRs) paragraph 4.5 state:

    Price is not the sole factor when assessing value for money. When conducting a procurement, an official must consider the relevant financial and non-financial costs and benefits of each submission including, but not limited to the:

    […]

    c. potential supplier's relevant experience and performance history.

37. Further, CPR paragraph 10.17 states:

    A relevant entity may exclude a tenderer on grounds such as bankruptcy, insolvency, false declarations, or significant deficiencies in performance of any substantive requirement or obligation under a prior contract.

38. As a consequence, Agencies conducting a new digital procurement may take into account that a Seller has 'confirmed serious underperformance' status for a Strategic Digital Contract under this Policy in accordance with the CPRs.
39. Agencies:
    1. should only use current and relevant information from the CSU Register to evaluate tenders;
    2. should not use information from the CSU Register as the only source of due diligence about a Seller;
    3. should consult the CSU Register before conducting a limited tender; and
    4. can and are encouraged to ask Sellers for more information after they have ascertained a Seller is recorded on the CSU Register.
40. Sellers will retain 'confirmed serious underperformance' status on the CSU Register for a period of at least 1 year. Following that time a Seller may provide evidence to the DTA about steps it has taken to rectify the serious underperformance. Based on this and on consultation with Buyers who previously provided a Serious Underperformance Report for the Seller, the DTA will decide whether the Seller's 'confirmed serious underperformance' status should be removed.
41. A Seller's serious underperformance history will remain on the CSU Register for 5 years (including the dates that the Seller's 'confirmed serious underperformance' was recorded in and/or removed from the CSU Register).
42. The DTA has prepared template clauses (see below) and strongly encourages Agencies to include these in all digital approaches to market and any contracts valued at or over the Threshold, regarding the DTA's collection and use of information from serious underperformance reports (if any).

Approach to market and contract clauses

43. The DTA has prepared template clauses for:

    1. approaches to market; and
    2. contracts,

    that Agencies are strongly encouraged to include in their procurement documentation to make it clear to Sellers that Agencies can:

    1. take into consideration the Seller's performance history including any information held by the DTA in its CSU Register; and
    2. if the resulting contract is a Strategic Digital Contract, provide any serious underperformance information to the DTA.
44. Buyers must not agree to terms or conditions in their contracts that may:
    1. prevent Buyers from sharing a Seller's serious underperformance information with the DTA and the provision of that information to other Buyers as contemplated by this Policy (for example confidentiality obligations); or
    2. otherwise restrict or limit the DTA's ability to properly administer this Policy with respect to a particular Seller.
45. The DTA will make the template clauses available to Agencies during the next stage of Policy implementation.

Commonwealth officials to act with integrity

46. Commonwealth officials will act ethically, honestly, with integrity and in good faith in administering this Policy. This includes acting in accordance with the APS Values, the APS Code of Conduct and the duties under s 26 of the Public Governance, Performance and Accountability Act 2013 (Cth), and other applicable codes.
47. Records kept under this Policy may need to be necessarily disclosed, e.g. through legal processes such as freedom of information, privacy, discovery in litigation, or inquiry, or other parliamentary, audit or oversight processes.

Complaints

48. Any complaints in relation to this Policy should be directed to the DTA via email (to be provided). Further details about the complaints handling process will be provided during the next stage of Policy implementation.

Footnotes

1. Published by the Department of Finance and available at: https://www.finance.gov.au/government/procurement/commonwealth-supplier-code-conduct-overview ↩
2. Published by the Department of Finance and available at: https://www.finance.gov.au/government/procurement/buying-australian-government/procurement-connected-policies ↩
3. 'Significant Event' means:
   1. any adverse comments or findings made by a court, commission, tribunal or other statutory or professional body regarding the conduct or performance of the Seller or its officers, employees, agents or subcontractors that impacts or could be reasonably perceived to impact on their professional capacity, capability, fitness or reputation; or
   2. any other significant matters, including the commencement of legal, regulatory or disciplinary action involving the Seller or its officers, employees, agents or subcontractors, that may adversely impact on compliance with Commonwealth policy and legislation or the Commonwealth's reputation.

Why this Policy matters to sellers

We have designed the DSUP to recognise that performance challenges on digital contracts can arise from many factors.

This Policy is not about penalising sellers. It's about:

• Creating a fair and consistent approach to managing serious underperformance.
• Encouraging collaboration between buyers and sellers to improve delivery outcomes.
• Providing transparency in how performance history may be considered in future procurements.

The DSUP will apply to Strategic Digital Contracts, valued at $4 million or more, or other contracts determined to be strategically significant by the DTA.

What's being proposed

The DSUP outlines a process for:

• Reporting and assessing serious underperformance.
• Providing sellers with a right of reply to the reporting of 'serious underperformance'.
• Recording confirmed serious underperformance on a secure register (CSU Register).
• Sharing relevant information with Australian Government buyers during tender evaluations.

The CSU Register will be accessible only to authorised Australian Government buyers and will not prevent sellers from being awarded future contracts — but it will help buyers make informed decisions.

Why your feedback is important

Your insights will help ensure the Policy is:

• fair and proportionate;
• sensitive to the realities of digital delivery; and
• supportive of sellers of all sizes and specialties.

We want to hear from you — whether you're a sole trader, small to medium enterprise, or large seller — to help shape a Policy that works for the whole market.

How to participate

• Read the draft Policy
• Submit your feedback in the 'Have your say' section of digital.gov.au
• Consultation closes on 21 December 2025 at 4 PM (AEDT).

Matters we'd like your feedback on

• Are the criteria for "serious underperformance" clear and reasonable?
• If you're a seller, is the right of reply for sellers sufficient to ensure you are able to respond to and that your perspective is taken into account by the decision maker?
• Do you understand how your contracts may be affected by this Policy?
• Does the Policy provide enough opportunity for sellers to improve and demonstrate remediation?
• Do you have any views on the Policy's fairness and impartiality?
• How would you prefer to receive updates or guidance once the Policy is finalised?
• Is the scope of the policy clear, including which contracts will be covered and how the threshold will be applied?

Applying the policy more broadly

We are also interested in seller and stakeholder views on whether the seller underperformance policy should be applied more broadly to a wider range of contracts. We are interested in feedback on:

• Which other contract types should be prioritised in extending the seller underperformance policy beyond digital contracts? This includes any you consider are high-risk or would especially benefit from the policy.
• Do you see any barriers or issues associated with widening application of the policy to other types of contracts in future and, if so, do you have any suggestions to address these?
• Noting the draft policy applies to all sellers, are there sellers you think should be exempt? Why?

What happens next

After the consultation period closes:

1. The DTA will review all submissions: feedback from sellers and other industry stakeholders will be carefully considered for DTA's finalisation of the policy.
2. We will publish a summary of feedback: a consultation summary will be made available outlining key themes and how they will shape the final policy.

What the policy does

• Applies to Australian Government digital contracts valued at $4 million or more; or other strategic digital contracts as determined by the DTA.
• Improves transparency of digital seller performance across the Australian Government.
• Provides incentives for buyers and sellers to work together to resolve delivery challenges and achieve successful outcomes.
• Offers a simple, fair process for reporting potential cases of serious underperformance.
• Ensures sellers have the right to respond and that all reports are assessed consistently, fairly, and ethically by DTA personnel with the requisite authority to make decisions. The final decision to record a seller as having 'confirmed serious misconduct' will be made by the Deputy CEO of the DTA.
• Maintains a register of serious underperformance to inform agency decision-making during tender evaluation activities for digital contracts.
• Protects seller and supplier privacy, with information only accessible under strict confidentiality arrangements including a 'need to know basis' only.

What the policy does not do

• It is not designed for minor issues, it only applies to serious underperformance (see Policy for definition).
• It is not a procurement ban or debarment regime. Buyers make their own decisions about a seller's suitability on a case by case basis for procurements where the digital contract is valued at $4 million or more or the contract is a Strategic Digital Contract, as determined by the DTA.
• It is not a 'blacklist'. The register is not public and does not prevent agencies from considering listed sellers for future work.
• It is not the sole source of assessment. Buyers must still undertake their own due diligence and performance checks during evaluation.
• It is not a dispute resolution or mediation service. Buyers remain responsible for managing contracts and engaging with sellers to resolve issues before escalating to the DTA.

What does the DTA do?

The DTA is the Australian Government's trusted adviser on digital transformation. This includes supporting and monitoring digital sourcing initiatives across the Australian Government, such as the Digital Marketplace Panel 2.0.

Australian Government agencies have spent approximately $16.9 billion on digital products and services contracts across DTA marketplaces as at 31 July 2025.

The DTA has whole-of-Government responsibility for managing strategic coordination and oversight functions for digital projects. This policy initiative is part of DTA's role...

The DTA also has oversight of and reports on whole-of-Government digital project performance. The Major Digital Projects Report provides an annual update on the status of major digital projects and sets out how the DTA is working to create the conditions for success through ongoing reforms and improvements.

Appendix: Digital Project Governance Board Roles and Responsibilities

References: ^{10, 12, 15, 19, 21, 23, 28, 31, 51-53}

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