Primary benefits
3.1 Stakeholders reported seeing benefits from the single seller arrangements (SSAs), particularly through:
- Greater discounts reducing purchasing costs, including price stability and predictability, for all buyers regardless of size or respective buying power.
- Improved efficiency in contracting through pre-negotiated arrangements, led by the Digital Transformation Agency (DTA), lowering overheads and reducing contracting costs for consuming agencies.
- Consistent and aligned terms and conditions that are pre-negotiated, improving contract compliance and risk management and often result in more favourable outcomes for buyers.
3.2 These elements all contribute to improved value for money, as consistently recognised by all stakeholder groups, and are further detailed below.
Greater discounts - reduction in purchasing costs
3.3 The SSAs aggregate demand across government, enabling the Commonwealth to negotiate better prices for some technologies.
3.4 Although the specific value of these discounts for each of the SSA sellers is commercially sensitive (some sellers require the signing of Non-Disclosure Agreements and Deed Polls which place limits on the Commonwealth discussing or publishing key aspects of the deals e.g. discounts made available), analysis conducted with the DTA indicated the total value of these discounts was at least $1.6 billion to the Commonwealth over the period from July 2019 to June 2024. (For the avoidance of doubt, this is not a “saving” as per Finance nomenclature, rather it is a cost avoidance. This amount is a conservative estimate based on the available information reported to DTA. The methodology to calculate this for each SSA varied depending on the nature of the contractual arrangement. No discount value was included where amounts could not be reasonably substantiated, and lesser values were utilised wherever there was ambiguity in the discount amount which would have been realised under the contract.)
3.5 While the biggest buyers within the Commonwealth (e.g. Defence, Services Australia) often have sufficient buying power to negotiate suitable contracts, smaller buyers lack the same leverage. Without the SSAs, the review heard these smaller buyers would face significant potential implications, particularly in securing discounts and negotiating terms and conditions consistent with the Australian Government’s policy positions. Without the collective buying power of the SSAs, these agencies are likely to face reduced leverage in procurement negotiations, resulting in higher costs for technology products and services.
3.6 Supporting the perspective that the SSAs reduce purchasing costs, 88% of survey respondents strongly agreed that discounts are a key monetary benefit of the SSAs. (Refer to Appendix D: Survey results.)
Improved efficiency in contracting
3.7 Buyers positively view the ability to leverage pre-negotiated arrangements, which reduces their spending on arrangement design, negotiation and management of large, complex head agreements. Commonly avoided costs include significant legal fees, administrative and procurement resource costs, and those costs associated with executive input and oversight. Survey respondents also identified lower procurement overheads (61% of respondents) and reduced contract management costs (59% of respondents) as benefits of the SSAs. Further details on the costs saved can be found the Costs section within this report.
3.8 This sentiment epitomises why the SSAs improve contracting efficiency. Smaller agencies benefit because they lack the capacity and resources to navigate complex technology contract negotiations. Of those surveyed, 80% identified simplified / streamlined procurement as a key benefit.
“I like not having to start from the start.”
3.9 The SSAs also centralise key aspects of administration with the DTA (e.g. reporting, agreement management, updating the arrangements for changes in the policy environment). This centralisation allows buyers to benefit from a unified service delivery model, reducing the inefficiencies that arise from disparate agreements. The review revealed, however, that buyers’ management of the contracts at an agency-level still requires a significant amount of work.
3.10 To get the most out of the SSAs, buyers also reported they would benefit from improved clarity of the responsibilities for specific contracting aspects. For example, CAIP Plans, data and security management, and the management of the delivery of statements of work.
3.11 Several stakeholders also suggested more can be done to extract further value from the SSA design and negotiation processes. Involving a representative group of buyers (which represents the viewpoint of small, medium and large buyers, those with the most complex requirements, and those with appropriate technical expertise) at the negotiation table was identified as a key mechanism to potentially improve the outcomes of SSA negotiations. This is discussed further in the Get the ‘right’ people at the negotiation table section of this report.
3.12 An unintended consequence of the SSAs is that SSA sellers may not always be able to participate in competitive processes on equal footing with other panellists. This typically occurs when a buyer seeks multiple providers via established panels, intending to contract all sellers under the same terms and conditions. An SSA seller competing for this work will have its existing SSA terms and conditions, making it an outlier in the process and adding additional administrative burden for both the buyer and the seller.
3.13 Similarly, the use of contractual ‘piggy-back’ clauses were considered as an option which offers similar potential efficiencies in contracting as the SSAs do. Several buyers stated, however, that in practice the contracts with ‘piggy-back’ clauses often require substantial renegotiation, as they were not primarily established for the purpose of use by others.
More consistent and aligned terms and conditions
3.14 The SSAs offer a major advantage through negotiating terms and conditions that offer a base level of consistency across the Australian Government.
3.15 The central negotiation of the terms and conditions within SSAs promotes alignment with established government policies, enabling compliance across buyers and mitigating legal risks. Reflecting this, 89% of survey respondents identified that pre-negotiated terms and conditions are the primary non-monetary benefit of the SSAs.
3.16 SSAs also provide the opportunity to agree on terms and conditions that align to key operational requirements and priorities of buyers. By reducing variability and promoting a structured approach, buyers - particularly smaller ones - can operate with greater confidence, knowing that the SSAs are tailored to their functional needs. This consistency fosters efficiency, allowing buyers to focus on service delivery rather than navigating inconsistencies within terms and conditions.
3.17 The standard terms and conditions applied globally by the SSA sellers do not always align to the Australian Government policy requirements (e.g. requirements regarding security obligations). This creates tension with the SSA sellers, who aim to balance the needs of their global customer base in a consistent manner. Without focused attention and leverage, stakeholders shared that convincing SSA sellers to change their global policy stance would be challenging, if not near impossible. Nonetheless, it is reasonable for the Australian Government to expect its suppliers to implement their policy intent. The SSAs effectively provide the Australian Government and buyers leverage to achieve this outcome.
3.18 The SSA agreements also provide the Australian branches within the SSA sellers with a unique platform to balance their commercial requirements with the needs and expectations of the Australian Government. Several SSA sellers noted they have adapted their policies and approaches based on customer feedback, ensuring alignment with evolving standards and requirements.
3.19 Furthermore, SSAs support Australia's competitive standing in global markets, such as Europe and the USA, by enabling effective policy adaptation within large-scale sellers. Through SSAs, Australia can assert its geopolitical presence and ensure its requirements are prioritised alongside those of other influential markets. Without SSAs, major sellers may deprioritise Australian standards, potentially limiting the nation’s ability to compete effectively on the global stage.
3.20 Additionally, some agencies have extracted additional value by using the contracts as a base, further tailoring services and negotiating amendments to the terms and conditions specific to them or additional discounts at the contract level. This is enabled in part because buyers are not having to negotiate from scratch.
3.21 Without the SSAs, the review heard smaller buyers in particular face greater potential exposure to substandard services and non-compliance with government policies (e.g. managing foreign ownership risks under the PSPF and adhering to the controls required under the ISM).