After much consultation, the NSW Procurement Board’s new ICT Purchasing Framework is now in full effect. The MICTA/ICTA contracting framework was the final piece of the puzzle that became mandatory on 1 September 2021, replacing the former Procure IT framework.  NSW Government Agencies are required to use the ICT Purchasing Framework when procuring ICT goods or services.

What’s in the ICT Purchasing Framework?

The ICT Purchasing Framework comprises:

• the Core& contracting framework for ICT procurements that are low risk and up to $1 million (ex GST) –  which has been in effect since 1 November 2018; and
• the Master ICT Agreement and ICT Agreement (MICTA/ICTA) contracting framework for ICT procurements that are high risk or over $1 million (ex GST) - these overhaul the previous Procure IT v3.2 framework. The MICTA and ICTA were launched (and available for use) from 1 July 2021, but Agencies could still elect to use Procure IT up until 1 September 2021. From 1 September, it is mandatory for Agencies to use the MICTA/ICTA where the threshold criteria are met.

In determining which of the two contracting frameworks will apply to any given ICT procurement, the value of the relevant contract is to be calculated by reference to the value of the entire contract over the term, including any extension options (or a reasonable estimate of that value if it cannot be reasonably determined).  Agencies will also be required to complete a risk assessment using the risk assessment tool made available on the NSW Procurement website. An Agency may elect to use the MICTA/ICTA contracting framework even for low risk procurements.

Changes under the ICT Purchasing Framework

Previously, when Agencies used Procure IT v3.2, any non-beneficial change that was negotiated with a supplier required written approval of the Department of Customer Services (DCS).

Procurement Board Direction PBD-2021-02 Mandated use of ICT Purchasing Framework has introduced a new process for contract variations under the ICT Purchasing Framework. This imposes new approval, reporting and governance requirements on Agencies, depending on the type of variation the parties wish to effect. The relevant variation types and their corresponding requirements are set out below.

Core& contracting framework – recent changes

The ICT Purchasing Framework incorporates the existing Core& contracting framework for low risk, low value procurements, which became mandatory for NSW Government Agencies on 1 November 2018. The original Core& agreement has since been replaced by Core& One (for use when procuring an individual ICT solution) and Core& Combined (which may be used when procuring more than one solution in one transaction). In 2020, the contract value threshold for use of the Core& contracts was increased from $500,000 to $1 million (ex GST).

For more on the original introduction of the Core& agreement, see our article - How to use the new Core& agreement.

MICTA/ICTA contracting framework – how does it differ from Procure IT?

The objectives of revising the ICT Purchasing Framework were to streamline and simplify the contract model and increase contracting flexibility. There was also a focus on uplifting the terms of the contract documents to be industry best practice, particularly strengthening provisions relating to security and data. Procure IT was drafted well before the widespread adoption of cloud services, and the new contracting framework has been modernised to better suit market expectations in the supply of those services.

The more significant changes made by the introduction of the ICT Purchasing Framework are in the replacement of Procure IT with the new MICTA/ICTA contracting framework, summarised below:

• Structural changes: The framework has a different structure to Procure IT v3.2. It has been consolidated to include 4 Modules (instead of 14) and one Order Form (instead of the General Order Form and separate Module Order Forms). There is also now the ability to place additional Orders under an ICTA, creating a master agreement structure that did not exist with Procure IT.
• Increased flexibility: The framework contains new terms to accommodate alternative project delivery methodologies (such as agile work models), streamlined placement of additional orders and customisation. There is more optionality in the terms of the MICTA/ICTA and more terms are left for Agencies to negotiate their own position with suppliers.
• Broader application: The NSW Procurement Board has recognised that technology is steadily converging with other sectors, particularly infrastructure. Procure IT was designed specifically for ICT-related products and services, and was not readily adaptable to the non-ICT aspects of a broader project. The MICTA and ICTA include new terms that have been introduced to accommodate the procurement of non-ICT services and deliverables (which are related or ancillary to the ICT procurement). For example, principal contractor provisions have been added for “Infratech” projects involving construction elements
• Data security: The framework now includes more stringent provisions in relation to data protection and security, with new clauses in relation to security incident notification and background checks of personnel.
• Intellectual property: The default position for supplier ownership of new material has been updated. While ownership remains with the supplier, the ICTA updates the applicable licence rights with respect to both new and existing material.
• Liability: The framework features an updated, simplified regime with respect to limitations and exclusions of liability, with greater scope for the parties to negotiate project specific liability regimes.
• Compliance: The framework has been updated to address new compliance requirements, such as ICT accessibility, modern slavery and the NSW Government requirements with respect to SME and Aboriginal participation in contracts.

What does this mean for new and existing contracts?

• From 1 September 2021, any new engagements for the provision of ICT goods or services to a NSW Government Agency will need to be contracted under either the Core& contracting framework or the MICTA/ICTA contracting framework, depending on the risk and spend of the engagement.
• Existing contracts remain unaffected. Any Procure IT contracts entered into before 1 September 2021 will continue on the same terms under the previous Procure IT framework (unless the parties agree to transition to the MICTA/ICTA terms). This is the case even where the contract permits extension or renewal beyond 1 September 2021.
• If an existing contract has no remaining extension options, it is expected that the parties will transition to the applicable contracting framework under the ICT Purchasing Framework. Agencies will need to seek approval from DCS to extend or renew any Procure IT contract beyond its expiry.

Authors: Lesley Sutton, Clare Beardall and Erin Kirker