Procurement and contracts
2.1 Single seller arrangements (SSAs) are pre-negotiated, whole of Australian Government technology agreements with specified sellers, established to leverage the government's collective buying power and ensure consistency with legal terms and conditions. They are not a procurement pathway.
2.2 The policy and legislative environment is constantly changing. Similar to other long term contractual arrangements (e.g. Digital Marketplace Panel 2), an SSA may become out of step with policy changes over the life of the contract. For example, the recent introduction of the Supplier Code of Conduct on 1 July 2024 required updates to be made to the SSAs. This necessitates the periodic review of the SSAs throughout their life to ensure ongoing alignment to the policy and legislative environment as it changes.
2.3 To manage this, the Digital Transformation Agency (DTA) routinely undertakes procurement policy compliance assessments for the SSAs. Further, the SSAs include clauses that allow updates to be made to the SSAs as policy and legislative environment changes.
2.4 When undertaking any procurement activity, there are a range of policies any digital procurement needs to consider, as depicted in the chapter overview above. Some policies have specific values that trigger different requirements for digital procurements are triggered, which is depicted in the figure below.
Further details about these thresholds and the relevant policies can be found in Appendix C: Procurement policy environment.
Establishment and use of an SSA
2.5 A procurement process includes steps that precede an agency preparing, negotiating or entering into a contract, with requirements set out in the CPRs.
2.6 This necessitates consideration of the mechanism to appoint an SSA seller against two core components:
- The head agreement, which does not include any liability to the DTA or any Commonwealth agency. This is established by the DTA as a standing offer. (Under Appendix B: Definitions within the CPRs, a “Contract” is defined to include a standing offer (and a panel) as relevant money may become payable under the standing offer. Further information is also available on Understanding Panel Arrangements.)
- The contract, which sits under the head agreement, and includes the products and services to be purchased. This buyer signs this contract. In some cases, the DTA enters into these contracts, under the relevant head agreement, for a coordinated purchase on behalf of the Commonwealth.
2.7 There has been a long-standing pattern of predictable usage of all but one of the sellers who have an SSA (refer to the SSA spend profile and Appendix A: Overview of SSA sellers sections of this report). The establishment of the SSAs provided the opportunity to leverage the collective buying power of agencies by consolidating sourcing arrangements into one contracting framework. Recognising this, the DTA has implemented SSAs in a manner consistent with the Limited Tender provisions under Division 2, paragraph 10.3 of the CPRs which states:
"A relevant entity must only conduct a procurement at or above the relevant procurement threshold through limited tender in the following circumstances: ...
- d. when the goods and services can be supplied only by a particular business and there is no reasonable alternative or substitute for one of the following reasons ...
- ii. to protect patents, copyrights, or other exclusive rights, or proprietary information, or
- iii. due to an absence of competition for technical reasons; or
- e. for additional deliveries of goods and services by the original supplier or authorised representative that are intended either as replacement parts, extensions, or continuing services for existing equipment, software, services, or installations, when a change of supplier would compel the relevant entity to procure goods and services that do not meet requirements for compatibility with existing equipment or services."
2.8 The establishment of the head agreement is consistent with these Limited Tender provisions.
2.9 When established, the SSA is listed as a Coordinated Procurement on Finance’s website. Consistent with the CPRs, where buyers select an SSA seller as part of a procurement process (refer to SSAs’ place in the procurement lifecycle):
- NCEs must contract the SSA seller under the SSA per the Coordinated Procurement provisions (refer to paragraphs 4.11 and 4.12 of the CPRs).
- All other entities which have signed up to the SSA may contract the SSA seller using the SSA at their discretion.
"We want to win based on the merits of our technologies and expertise and we strongly encourage our customers to run competitive procurement processes"
2.10 Of note, the DTA is actively working with buyers to encourage them to undertake market scans and competitive procurement processes, rather than solely relying on SSA Coordinated Procurement. Further, buyers engaged by the review commonly cited conducting such market scans and competitive assessments independently, stressing the SSAs are ‘a contracting framework, not a procurement pathway’.
2.11 As part of negotiating the SSAs, the DTA may agree to pre-commit to purchasing products and services from the SSA seller. This pre-commitment reflects the existing and projected usage patterns with the SSA seller, which is consistent with the Limited Tender provisions under the CPRs.
2.12 Consideration is also required of the use of the SSAs for products and services. The findings of this assessment at a high level were:
- Products (e.g. M365 by Microsoft or ECC6 by SAP for enterprise resource planning) are mostly protected by patents, copyrights, or other exclusive rights, or are proprietary information. Where these protections are in place, buyers’ continuity of the use of these products necessitates purchase from the SSA seller or an authorised reseller commercially established by the SSA seller (e.g. Data#3 is the incumbent Microsoft reseller to the Australian Government).
- Services can, in limited circumstances, also meet the requirements around proprietary information (e.g. intellectual property) or the provision of services which are not available from others due to compatibility requirements. However, the review found there is a dynamic technology services market that can also meet buyer requirements, which necessitate competitive procurement processes to be run for services.
2.13 The applicability of SSAs to products and services can be summarised broadly as:
Product onlyAlthough not the only consideration, when a product is exclusively available from a single seller, it reinforces the justification for an SSA. Refer to Defining conditions that warrant an SSA section of this report for further information. | Service only Establishing an SSA solely for services is unlikely to be justifiable, as expertise exists widely and professionals with deep technical knowledge are often mobile. |
Product in principle, services in addition If the primary driver for an SSA is the product, the agreement is justified. Adding services where they are intrinsically linked to specific products can be a logical approach. | Services in principle, products in addition Where services are the key rationale for an SSA, numerous providers exist. Any minor products offered by the seller are unlikely to be sufficiently utilised by the Australian Government to warrant an SSA. |
2.14 The Australian National Audit Office reviewed the use of the Limited Tender provisions through an audit in 2020 entitled “Establishment and Use of ICT Related Procurement Panels and Arrangements” that sought to “assess the extent to which entities’ establishment and use of ICT related procurement panels and arrangements supported the achievement of value for money outcomes”. Regarding the IBM SSA specifically, the Australian National Audit Office concluded:
"DTA's planning and approach to market for the establishment of the IBM Arrangement complied with the CPRs and demonstrated adoption of key sound practices identified in Finance guidance. DTA documented clear objectives for establishing the arrangement and approached IBM via a limited tender as part of a coordinated approach to expand the number of whole of Australian Government arrangements in place."
2.15 There is an observed tension between entering the SSA as a Limited Tender and the Australian Government’s intention to use the SSAs as a contracting framework that buyers utilise following a competitive market assessment. This is further conflated by the way the SSAs are positioned publicly as discussed in the Updating key websites and branding section in this report.
2.16 Discussions with Finance indicated there is an opportunity to consider amending the CPRs to address this observed tension, and the other findings of this report. The amendment could be similar to the articulation of Coordinated Procurement or Cooperative Procurement to distinguish the SSAs and address risks identified in Seller lock-out. This amendment would have two key benefits:
- Enable a mechanism to compel mandatory usage of the contracts across the Australian Government, without requiring the use of Coordinated Procurement which effectively establishes the SSA sellers as a panel of one.
- Make clear buyers must follow a competitive market assessment.
2.17 Finance noted, however, a glass house rule (assessing whether the addition of such an exception for the SSAs would create any other issues for other sectors of the economy (e.g. construction)) would need to be applied to consider how the amendment may apply to other sectors of the Australian economy.
2.18 The DTA should engage with Finance to distinguish within the CPRs whole of Australian Government digital contracts from Coordinated Procurements to address the risk of SSAs being utilised as a procurement pathway.
Digital Sourcing Contract Limits and Reviews Policy
2.19 The Digital Sourcing Contract Limits and Reviews Policy (this policy is only applicable to non-corporate Commonwealth entities) supports agencies to structure contracts to reduce risk, drive competitive outcomes and increase flexibility. Concerns were, however, raised by both agencies and sellers about the policy’s thresholds, which imposes:
- A $100 million cap on contract values (first established in 2016 and revised in 2020, buyers and sellers noted this threshold has not kept pace with inflation or the relative cost of technology).
- A three-year maximum duration for the initial contract term length, plus a three-year maximum for any subsequent option period.
2.20 The policy provides for a Joint-Ministerial Exemption where any digital contract exceeds the relevant thresholds, which states:
An exemption from this policy can be granted jointly by the requesting NCE's [non-corporate Commonwealth entity] portfolio minister and the Minister responsible for the DTA.
The requesting NCE must demonstrate a special need for an alternative arrangement and their exemption request must be premised on a genuine intent to meet the policy requirements. They must also include evidence to support any claims.
2.21 Applying for the exemption was noted to add administrative burden to agencies contemplating entering digital contracts that exceeded these thresholds. The SSAs however are automatically exempt from these limits as they are listed as a mandatory category on the digital whole of Australian Government panel, which, in addition to the SSAs, include:
- Data Centre Panel 3.
- Hardware Marketplace.
- Software Marketplace.
- Telecommunications Marketplace.
2.22 The SSAs can offer better pricing due to the automatic exemption under the policy, by:
- Enabling a longer contractual timeframe, which allows SSA seller proposals and contracting costs to be amortised over a longer period.
- Entering contracts over $100m, which allows the SSA sellers to amortise their costs over a broader base of revenues.
2.23 The factors reduce the commercial risk profile of the SSA sellers when providing their pricing, enabling them to compete more effectively than other sellers in the market.
2.24 This unintended consequence of improving the competitive position of the SSA sellers, in particular the three-year contract limit, also appears inconsistent with the Australian Government’s policy stance on encouraging procurement opportunities for Small and Medium Enterprises (for example, per the Buy Australian Plan), and Indigenous entities (for example, per the Indigenous Procurement Policy).
2.25 The DTA should review the existing Contracts Limits and Review Policy to ensure competitive neutrality between sellers.
Commonwealth Australian Industry Participation (CAIP) Plans
2.26 The CAIP Plans policy for Australian Government funded projects has been established by the Department of Industry, Science and Resources (DISR) to ensure Australian industry have:
- Full, fair and reasonable opportunity to bid to supply key good and services for the project.
- The opportunity to show their capabilities when the company purchases or subcontracts these goods and services.
2.27 Whilst CAIP Plans are not mandatory, contracts under the SSA head agreements often exceed the $20m threshold for development of a CAIP Plan. Further, when considering the collective spend on SSA sellers, the threshold is exceeded for all SSA sellers except Rimini Street. More than 40 contracts were entered into by buyers over the past five years which exceeded the $20 million threshold.
2.28 Underlying this issue is the nature of how CAIP Plan requirements are managed, which devolves responsibility for agreeing the details of the plan to buyer agencies. Although this approach is consistent with the policy intent of “Government entities that fund their projects are responsible for applying this policy”, the review heard that buyers generally do not implement CAIP Plans at a contract level. This means the Commonwealth is not getting the full industry participation outcome sought from this policy in relation to the SSAs.
2.29 The establishment of CAIP Plans for each SSA seller at a head agreement level is further discussed in the Enhancing growth of the Australian technology sector section of this report.
2.30 When determining what can reasonably be expected of the sellers with SSAs, it is acknowledged that most of the sellers provide platforms, upon which others build specific solutions. The solutions are commonly built by members of the sellers’ Australian partner network. With this in mind, the CAIP Plans could target a range of opportunities for Australian industry inclusion, including:
- Commercial partnerships with, or sub-contracting to, Australian companies for Australian Government work.
- Direct investment in Australia (e.g. building sovereign data centres) necessitating Australian companies in the supply chain.
- Innovation and investment programs.
- Seller investment in skilling initiatives within educational institutions (e.g. school, TAFE, universities).
- Training and certification programs to uplift capability in Australian industry.
- Global network initiatives to incorporate Australian businesses into the SSA global supply chain.
2.31 Further, as discussed in Broader ecosystem, the priorities outlined in the Buy Australian Plan align well with the use and implementation of the CAIP Plans.
Australian Skills Guarantee
2.32 The Australian Skills Guarantee is a policy designed to use government investment in major technology projects to help train the next generation of skilled workers. It applies to procurements with an estimated individual value of over $10m. (Limited to Non-Corporate Commonwealth Entities, and Prescribed Corporate Commonwealth Entities under the Public Governance, Performance and Accountability Act 2013. Note too, this policy also applied to construction contracts, but this was not within scope of this review.) However, buyers have the discretion to determine if it is reasonable to apply the targets.
2.33 Of course, the SSAs are not technology projects, rather they are a contracting framework. Therefore, in practice, buyers are unlikely to implement or manage the targets within the construct of the SSA and associated agency-level contracts, as relevant to agency technology projects. This was confirmed during agency consultations.
2.34 Recognising this outcome, it is important to establish meaningful Skills Guarantee targets with SSA sellers at a head agreement level.
2.35 Further discussion of benefits associated with training and education provisions within the SSAs is provided in the section “Secondary Benefits”.
Indigenous Procurement Policy
2.36 The Indigenous Procurement Policy aims to stimulate Indigenous entrepreneurship, business and economic development, providing Indigenous Australians with more opportunities to participate in the economy.
2.37 The Indigenous Procurement Policy sets two levels at which Indigenous procurement outcomes are managed:
- Mandatory set-aside: applicable to remote procurements and all other procurements wholly delivered in Australia between $80k to $200k (GST inclusive).
- Mandatory Minimum Requirements (MMR): applicable to high value contracts wholly delivered in Australia valued at $7.5 million or more (inclusive of GST).
2.38 In aggregate, the Australian Government’s total spend exceeds the mandatory set-aside threshold at a whole-of-government level and will typically exceed this threshold at an individual contract level. (The Indigenous Procurement Policy applies to specific contracts, rather than the overall spend with a seller.)
2.39 Many SSA contracts will meet the MMR threshold of $7.5m and the refined “wholly delivered in Australia” requirement introduced in July 2025. As such, buyers need to ensure the 3-4% target under the MMR is met for any SSA contracts, including acquittal of whether the SSA seller was compliant at the end of the contract.
2.40 It was noted by the review the targets for Indigenous Procurement, which are managed at a Portfolio level, were substantially exceeded in the most recently reported financial year. Further, most of the SSAs include clauses which provide for Indigenous Participation Plans to be set by agencies, where agency contracts exceed the relevant threshold, and IBM has an active MMR IPP in place.
Other policies
2.41 The Supplier Code of Conduct came into effect 1 July 2024 and outlines minimum expectations of suppliers and their subcontractors while under contract with the Australian Government. Paragraph 6.12 of the CPRs mandates this code, stating all relevant entities must incorporate the Code into all forms of Commonwealth contracts. Provisions for this code of conduct have not yet been incorporated into all the SSAs.
2.42 DTA advised that the Certificate of Compliance required as per the Workplace Gender Equality Procurement Connected Policy was obtained where relevant for each of the SSAs, with no issues noted. Further, Microsoft has submitted the Workplace Gender Equality optional statement.
2.43 Each of the SSA sellers have published a Modern Slavery Statement as required under the Modern Slavery Act 2018.
2.44 The updated direction of the Australian Government regarding “The new APS ERP approach” encourages autonomy and choice, testing the market and support for smaller entities. The review considered this new approach to be consistent with the intent for the SSAs to be utilised as a contracting framework, and noted agencies are no longer obligated to utilise GovERP as required previously under the moratorium in place. Supporting this position is:
"The new approach does not prevent entities from seeking or continuing to receive transactional services from existing transactional processing providers."
Emerging changes
2.45 There are also key emerging changes, which include:
- Procurement and Sourcing Policy – the DTA is consulting on whether this policy replace the Digital Sourcing Consider First and Fair Criteria policies.
- Environmentally Sustainable Procurement Policy – this policy has recently come into force from 1 July 2025 for ICT goods (e.g. hardware, computers, servers) and requires the establishment of a new Supplier Environmental Sustainability Plan for any contracts over $1m (including GST) which will require 6-monthly reporting to the buyer, and from the buyer to the Department of Climate Change, Energy, the Environment and Water.