Strategic review of the whole of Australian Government single seller arrangements

Executive summary

The Digital Transformation Agency (DTA) engaged SolsticeIT to conduct a strategic review of the Australian Government’s Single Seller Arrangements (SSAs). 

The review collected insights from government agencies, SSA sellers, industry bodies, and both domestic and international representatives through interviews, written submissions and surveys. The objective was to determine if SSAs remain fit-for-purpose, continue to deliver value, and support the government’s digital transformation agenda.

Summary of findings

The 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. 

SSAs achieved over $1.6 billion in discounts between 2019 to 2024.

SSAs remain vital to enable the Australian Government to enhance its bargaining power with major technology companies. Stakeholders overwhelmingly support the retention of the SSAs, with other governments nationally and internationally also expressing interest in similar arrangements. There is, therefore, a clear ongoing role for the SSAs within the Australian Government’s digital ecosystem and in supporting the digital transformation agenda.

The SSAs continue to deliver significant value. Between 2019 and 2024, the SSAs achieved $1.6 billion in discounts, enabling the government to instead invest in other core services like education, health care, and agriculture. Further, a range of examples were identified of additional value provided by the SSA sellers to Australia, such as:

• The employment of more than 10,000 Australians by the SSA sellers.
• Investment in local infrastructure, such as data centres throughout the country.
• Contributing to workforce capability through skills development and training initiatives. 

The review also found SSAs have typically been established with sellers already holding significant technology presence and spend within the Australian Government ecosystem. In this way, the technology selection precedes the SSA, rather than being driven by it. The review concluded that SSAs are intended to be used as a contracting framework – not a procurement pathway – allowing agencies to retain autonomy and responsibility for procuring value for money technology, whilst also enabling the government to secure better holistic deals.

99% of surveyed buyers want to retain the SSAs and other nations want similar arrangements.

Nonetheless, there are opportunities for the DTA as the steward of Australian Government digital capability to ensure the SSAs: 

• Are strengthened and optimised in the way they are negotiated and managed to ensure continued alignment with government priorities.
• Deliver maximum value for agencies and continue to enable digital transformation.
• Support the ongoing delivery of essential services.
• Deliver greater economic value to Australia, in alignment with Australian industry participation policy and the Buy Australian Plan.
• Foster a genuine strategic partnership with the SSA sellers, which does not yet exist across all of the SSA sellers.

The detailed findings were determined through the exploration of four key topic areas.

1 - Do the SSAs support alignment with government policy?

SSAs are broadly aligned with the Australian Government’s digital transformation agenda and technology security objectives. However, while procurement policy obligations, such as Commonwealth Australian Industry Participation Plans (CAIP Plans), are included in the SSAs, their practical implementation is often left to agencies - resulting in either inconsistent application or absence altogether. As the policy environment evolves (e.g. with the introduction of Supplier Environmental Sustainability Plans), SSAs must be actively monitored and updated to remain current and effective.

Key opportunities to refine the policy settings include: 

• Extending on the broad security clauses within SSAs, define data and digital sovereignty, with consideration of localisation requirements and existing policy (e.g. the Hosting Certification Framework), and work across government to determine the most suitable means to implement associated protections.
• Distinguishing within the Commonwealth Procurement Rules (CPRs) whole of Australian Government digital contracts from Coordinated Procurements to address the risk of SSAs being utilised as a procurement pathway.

2 - Do the benefits of having SSAs outweigh the costs and risks?

Stakeholders consistently identified three key benefits of SSAs: 

• Volume discounts across all buyers - $1.6b in discounts were conservatively estimated over 2019-2024, which for smaller agencies are substantially greater than they would otherwise have access to in particular.
• Greater efficiency in contracting – with 4 out of 5 of the buyer’s surveys identifying this as a benefit.
• Consistent contractual terms and conditions – which is achieved through having a single head agreement for each SSA seller respectively, and stakeholders interviewed consistently echoed this as a benefit.

Other benefits identified were enhancing growth of the Australian technology industry, improving the ability to maintain critical technology and leveraging centralised digital procurement expertise for benefit of all Australian Government agencies.

Some concerns were raised about inconsistent seller behaviour - such as offering better discounts outside the SSAs whilst simultaneously removing other negotiated terms and conditions - which risks undermining their value. 

The DTAs average cost to establish an SSA is $1.6 million and ongoing management is $1 million annually.

The review also considered the key risks associated with the SSAs, assessing these to present a low to medium risk. Of note, the risk of buyers being locked into sellers as a result of an SSA was assessed to be low, as it is more likely the nature of technology and the costs to exit are driving challenges experienced with switching sellers. The review noted this is true of most technologies. In essence, by the time a seller has met the thresholds for entering an SSA, technology reliance is likely already present.

Nevertheless, the benefits were widely viewed as outweighing the costs and risks.

3 - What insights can we obtain from other jurisdictions?

Other governments confirmed the value of centralised agreements with major technology providers. Jurisdictions lacking this model (e.g. the U.S.) struggle to achieve the benefits identified by the review, especially for smaller agencies. Strong central coordination, tailored flexibility and accessible information are essential for driving meaningful usage. Fragmented procurement was repeatedly identified as a disadvantage for buyers.

Within Australia, inclusion of States and Territories introduces additional compliance complexities (e.g. privacy) but also increases negotiation leverage if managed well. 

4 - Optimising the future value of the SSAs

Although internal guidance exists, to improve transparency a public-facing framework for assessing seller suitability should be implemented for both retaining / retiring existing SSAs and for determining new SSA opportunities. This will also support proactive management of the sellers which have an SSA as the market and technology landscape shifts over time. Following this, to further maximise future value, the DTA should expand, where appropriate, the use of SSAs while ensuring they remain flexible to better support technology choice and capability uplift across the public service (e.g. through the provision of training credits in predominant technologies by the SSA sellers). To improve engagement, maximise the value of the SSAs and ensure ongoing appropriate use, the DTA and SSA sellers must invest in education and guidance for agencies.

Recommendations

The DTA is well-positioned to leverage its relationships with SSA sellers to support the Australian Government’s digital priorities and generate opportunities for Australian businesses. This report supports the continued use of SSAs as a whole of Australian Government contracting framework, with five recommendations made to strengthen their transparency and ongoing value throughout the life of the SSA:

A series of key actions to implement these recommendations, representing the insights from this report, are provided in Chapter 7 Recommendations and actions.

SolsticeIT thanks all the sellers, industry bodies, Commonwealth agencies, State and Territory agencies, international jurisdictions, Australian industry more broadly and the DTA for their contributions to the findings in this report.