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Final Report of the ICT SME Joint Industry Government Working Party - 6
2.9 Liability and insurance in Government ICT contracts
The Working Party noted that, while the current CPGs and GITC allow for agencies to be flexible in their approaches to setting appropriate insurance levels and dealing with liability according to relevant risk management practices, in practice they discourage agencies from capping liability. For example, the GITC provides ‘default’ or ‘starting’ points for public liability insurance at $10 million and provides that the supplier retains all liability for negligence or breach of contract. The Working Party discussed these issues with DOFA officers.
The Working Party noted the AIIA’s advocacy that Government agencies more readily agree to cap or limit ICT suppliers liability in government ICT contracting and, in particular, the AIIA publication on this issue, Better Practice, Better Outcomes.
The Working Party notes the Government’s election commitment to cap liability at appropriate levels when purchasing from ICT suppliers in recognition that a requirement for unlimited liability is an inhibitor to some ICT firms.
DOFA is developing a revised policy on liability in ICT contracts to be published and reflected in the new version of the GITC contracting framework, due by mid 2005.
In parallel, on 12 February 2005, DCITA issued a request for tender to engage a consultant to develop a best practice guide to assist Australian Government purchasing officers in assessing and managing risks in the procurement of ICT goods and services. This guide will include the Australian Government’s proposed policy that suppliers’ liability in ICT contracts should be capped where this is appropriate.
Tenders closed on 10 March 2005 and a final report is expected in June 2005.
2.10 Information on ICT SME involvement in Government procurement
The Working Party noted that it was currently not possible to fully assess or measure the involvement of SMEs in the Government ICT procurement market over time because of the lack of reliable information.
At the suggestion of the Working Party, DCITA engaged a consultant to develop methodologies and to research and analyse contract data for 2001–02 and 2002–03. The results of the consultancy were not considered by the Working Party and were therefore not endorsed by it.
3. Further collaboration on SME participation in Government ICT procurement
While the Working Party itself has formally concluded its work, Working Party members have indicated a desire that the Government and industry continue to liaise on issues concerning SME involvement in Government ICT procurement.
These issues will continue to be addressed through ongoing dialogue between DCITA, DOFA, other individual Government agencies with industry associations and individual industry members.