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Procure IT is ready to use. The new NSW Government contract for ICT procurement

Thursday, October 20, 2011
The much awaited new standard agreement that is to be used by NSW Government for buying ICT products and services (known as Procure IT version 3.0) can now be used. The publication of the first five Modules means that the benefits that the NSW government and the IT industry hope to achieve can now be realised, though the use of this agreement.

Whilst the 'legal boiler plate' terms and conditions such as liability, indemnity, insurance, ownership and licensing of intellectual property, confidentiality and privacy have been settled for some time, the agreement could not be used because the "Modules" had not been been finalised.  The Modules provide the terms and conditions that are specific to particular types of product or service that is being bought.

Just how important is this?

The IT industry, represented by the AIIA (Australian Information Industry Association) has been working with the NSW Government over the past 18 months to re-draft Procure IT to better reflect the way NSW Government buys, and the IT industry sells, ICT products and services, and to make the agreement fairer to industry.  By making the agreement fairer to industry the government expects to reduce the costs associated with negotiating changes to the agreement on every occasion, increase the competitiveness of tenders through increased industry participation, encourage industry development and innovation, and reduce prices (through a reduction in the risk premium that suppliers apply to onerous contracts).  NSW Government expects to save 10s of millions of dollars each year through the implementation of Procure IT version 3.0. Industry expects to save even more!

The Resellers' Business Model is Included: a Government First 

In addition Procure IT will include clauses which provide for resellers to provide hardware and software to NSW Government customers in accordance with the "reseller business model".  This means that resellers will be able to provide hardware and software using one of the following business models:
  • by supplying the hardware or software with full warranties and indemnities, in the same way as the Original Equipment Manufacturer (OEM) would provide the products and services; or
  • by supplying the hardware and software with "pass-through" warranties only; in other words the reseller is only obliged to give the Customer the warranties that it obtains from the OEM under the distribution agreement between the OEM and the reseller; or
  • by simply providing a "introduction and facilitation service", with the Customer entering into an agreement for the supply of the hardware or software directly with the OEM.
Of course whilst it is acknowledged by all that the different agreement profiles come with different prices, the flexibility of this approach will allow an entire industry sector to a participate in NSW Government procurement.  NSW Government is the first Australian government to acknowledge and embrace the reseller business model in its standard IT contracts.

Open Source Software

Procure IT also facilitates the supply of open source software and support for open source software, whilst acknowledging the primacy of the Open Source License. This is also a major improvement in the contract, enabling the supply of hundreds of open source solutions to NSW Government, under appropriate contact terms.

Which Products and Services can be Purchased under Procure IT Now?

The five Modules that have been approved for use are Hardware Acquisition, Hardware Maintenance and Support, Software Licensing, Software Development and Software Support Services.  It is expected that Modules for Data Management Services, IT Personnel (IT Recruitment and contractor/body shopping services) and Professional Services will be published in the next few months.  Additional Modules dealing with managed services, telecommunications services, hosting, SAAS, IAAS and PAAS are expected to follow laster this year.

Will Procure IT apply to current contracts?

NSW Government will use Procure IT for new tenders as they are issued. There is no expectation that Procure IT will apply retrospectively to existing agreements that have already been entered into.

Where can I find the version of Procure IT version 3.0

The new version of Procure IT version 3.0 is published on the NSW Government Procurement website at:http://nswprocurement.com.au/Tenders/Goods---Services-Standard-Form-Documents.aspx 


Pym’s Technology Lawyers has been the primary legal adviser to AIIA during the discussions with NSW Government on Procure IT.

Author: Mike Pym, Director, Pym’s Technology Lawyers.  A member of the Panel of Expert Bloggers on commun-iT and an expert on www.aiia.biz

Disclaimer: This is general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Pym’s Technology Lawyers Pty Ltd is a specialist IT and commercial law firm. It has liability limited by a scheme approved under Professional Standards Legislation.




 

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