Key commonalities and differences
4.10 The key themes from discussions with the USA, UK, Canada, New Zealand, and Australian States and Territories about SSA-like contracts are outlined below.
4.11 Further details about other nations can be found in Appendix F: International comparisons.
Whole of government contracts are desired
4.12 Australian State and Territory stakeholders generally agreed that leveraging the Commonwealth’s SSAs makes sense to contribute to scale, access volume-discounts and support a national architecture. In practice, however, many said the current SSA arrangements require additional administrative effort given they are not designed for State and Territory policy and technology requirements. Given this, some said the benefits do not always outweigh the costs of adopting future Commonwealth SSAs, so States and Territories must assess each SSA on a case-by-case basis. Nonetheless, State and Territory stakeholders indicated that they would be interested in the SSAs as long as the arrangements offer better pricing.
4.13 In other nations, representatives from Canada, New Zealand, the USA and the UK unanimously agreed that whole of government contracts are sensible. Canada and New Zealand already have similar arrangements in place.
4.14 It was echoed that smaller agencies consistently find it challenging to access the negotiation capacity and expertise required to secure favourable terms. This disparity disadvantages them compared to larger entities that can leverage their scale and resources. The lack of centralised support exacerbates these challenges, making it harder for smaller agencies to navigate complex and evolving technology procurement landscapes.
4.15 In supporting the implementation of these whole of government arrangements, Canada, the UK and New Zealand all have legislative frameworks similar to Australia that set requirements for government technology procurement. However, these tend to be enabling powers rather than rigid legislative constraints.
Similar benefits sought
4.16 There were a range of benefits nations were seeking from whole of government contracts, including:
- Discounts on purchase prices.
- Better, more accountable use of money.
- Better services for citizens including use once access.
- Interoperability of systems.
- Information sharing among systems.
- Better leveraging of modern technologies (e.g. cloud, AI).
4.17 While SSAs have the potential to deliver long-term efficiencies and improved services to Australians, they require investment, prioritisation and a coordinated approach. Nevertheless, engagement with Shared Services Canada (SSC) indicated that, over time, these arrangements can deliver cost savings, cost avoidance, and enhanced negotiating power through economies of scale, providing a valuable framework for managing technology procurement.
4.18 Across jurisdictions, efforts to standardise pricing and terms through panel agreements or whole-of-government agreements are evident, including partnerships with major sellers. These initiatives aim to provide consistent and equitable procurement frameworks or mechanisms, enabling agencies of varying sizes to benefit from uniform terms and pricing structures. While these efforts mark progress, further refinement is needed if the Australian Government intends to scale its SSAs to a national model. Model clauses for aligning to State and Territory policy differences (e.g. privacy, procurement, indigenous participation) will support this move.
Whole of government arrangements are not without challenges
4.19 Establishing effective whole-of-government contracts remains a complex challenge for nations, facing barriers such as cultural resistance, governance issues, and difficulties in balancing control and competition. Additionally, challenges related to security, interoperability, and resilience further complicate efforts to implement such contracts. These factors collectively impede the successful standardisation of contracting processes and hinder the broader adoption of unified systems across agencies.
4.20 Strategic planning approaches often do not support an effective forward-looking view of technology requirements. Government technology budgets partly hinder this by not being aligned to the evolving technology market. With the shift from capital expenditure (CAPEX) purchasing hardware and on-premises solutions to operating expenditure (OPEX) purchasing cloud, software as a service and platform as a service solutions, nations have faced challenges in ensuring government budget mechanisms adapt. For example, in New Zealand, government technology budgets have become predominantly OPEX-based, while Treasury’s fiscal management has remained constrained by CAPEX-focused rules. This is similar to the Australian context whereby, for the agency Chief Information Officer (CIO) and Chief Finance Officer (CFO) who are planning the strategic technology investment profile, these constraints represent a real challenge in the annual budget management cycle. This has led to a degradation of the long-term financial planning for technology.
4.21 Further, all jurisdictions shared challenges with obtaining the right technology skills to support negotiation with large technology sellers. Identifying that governments encounter difficulties in recruiting top-tier technology talent is not a new insight. However, this review notes this is a critical input to ensure the right arrangements are negotiated.
Equitable support for smaller agencies is a strength
4.22 Targeted support for smaller agencies ensures equitable access to procurement capabilities, addressing disparities that often arise in fragmented landscapes. Canada and New Zealand have implemented initiatives that assist small agencies, enabling them to participate in centralised agreements on equal footing with larger agencies. These programs foster inclusivity and ensure fair distribution of benefits across all government bodies. The UK has also implemented shared services for key corporate functions, which partly supports addressing this challenge.
4.23 Such support mechanisms are critical in empowering smaller agencies to navigate complex procurement processes and secure favourable outcomes. By providing tailored assistance, governments can mitigate the risks of inequities and ensure that even the smallest entities can contribute to and benefit from shared technology strategies.
4.24 Conversely, the USA has no such supports and continues to observe significant pricing differences offered across their agencies. The USA's decentralised approach relies heavily on the influence and force of individual departments, such as the Department of Defence and Department of the Treasury. This results in inequities in the way small versus large agencies access discounts and benefits. Further, the USA’s model presents significant challenges in negotiating and managing long-term contracts with major technology sellers. The absence of a unified strategy means smaller organisations struggle to compete for comparable procurement and contractual outcomes, creating a fragmented system that disproportionately impacts smaller players.
Relative bargaining position
4.25 Countries with more centralised models, such as Canada and New Zealand, have demonstrated greater capacity for leveraging scale across government.
4.26 For much larger countries, however, such as the USA and UK (encompassing approximately 438 and 465 agencies respectively), the coordination and interoperability within these nations is a challenging and complex endeavour.
4.27 Other nations identified the market leading position of the large technology sellers and the potential emergence of monopolistic conditions within the market as key risks. Canada’s approach provides a key pragmatic solution to address this while still acknowledging the important role these sellers have in delivery to citizens. Canada negotiates the out-years of contracts with technology sellers it regards as critical and where viable alternatives are few or non-existent (e.g. in a five-year contract window, negotiating the sixth out-year on an ongoing/rolling basis). Whilst this approach does not directly address the emergence of such conditions in the market, it does enable a shifting of the contractual negotiating position.
4.28 To further enhance its bargaining position, Canada has proactively driven business process standardisation and organisational clustering under the direction of the Controller General. This is similar to New Zealand’s All of Government Common Process Model for “back office” processes (Finance, Human Resources, Enterprise Asset Management, Information Technology Service Management, Procurement, Work Health and Safety) and the UK’s implementation of shared services for corporate functions. Australia has tried to implement similar process standardisation through the GovERP initiative, but this was not successful (refer to the GovERP reuse assessment). Nonetheless, anecdotes from other nations indicate standardised processes, data architectures and integrations help drive interoperability, reduce the dependency on specific technology, create the right competitive environment and balance the relative bargaining power.