ICTDigital Sourcing Handbook for Buyers NSW GOVERNMENT ICT

ICT/Digital Sourcing Handbook for Buyers NSW GOVERNMENT ICT SERVICES SCHEME The purpose of this ICT Services Scheme Handbook for Buyers (“ICT Services Handbook”) is to assist Buyers as to how to use the ICT Services Scheme. This document should be read in conjunction with existing agency-specific and NSW Government procurement policies and procedures. The ICT Services Handbook does not cover accreditation and authority to procure, procurement planning, needs analysis, preparation of tender documents, evaluation criteria, contract and supplier management or post-award requirements. More information can be found in the NSW Government Procurement Policy Framework.

WHAT IS THE SCHEME? The ICT Services Scheme (SCM 0020) is a NSW whole-of-government prequalification scheme for sourcing ICT/digital goods and services. Department of Customer Service administers the ICT Services Scheme as the Contract Authority. The scope of the ICT Services Scheme aligns with the objectives of the NSW Government Beyond Digital Strategy by providing a framework that enables NSW Government to access a variety of ICT/Digital Suppliers and useful contract templates. It also aims to make it easier for small to medium sized enterprises to do business with NSW Government. The ICT Services Scheme is available for use by NSW Government agencies and other eligible Buyers. IS IT MANDATORY TO BUY FROM THE SCHEME? Under Procurement Board Direction 2020 -04, agencies must use the ICT Services Scheme when procuring ICT goods and services, except where specific exemptions apply. If a whole-of-government arrangement for supply of specific ICT goods or services exists (for example Microsoft, Salesforce, Oracle, etc) then Buyers are expected to use those. A complete list of wholeof-government contracts can be found here. WHAT CAN I PROCURE FROM THE ICT SERVICES SCHEME? Buyers can procure many ICT related goods and services that have been classified in categories and subcategories for your convenience. A full list of categories and subcategories is here. WHERE CAN I FIND SUPPLIERS IN THE SCHEME? Buyers can select Suppliers from a list that can be accessed under the “List of Suppliers” tab here. The ICT Services Scheme offers two kinds of suppliers to be used depending on the contract value and assessed risk. q Registered suppliers list who are eligible for low-risk contracts valued up to $150, 000 ex GST and q Advanced registered suppliers list who are eligible for contracts valued over $150, 000 ex GST each or high-risk contracts). WHAT DO SUPPLIERS AGREE TO WHEN THEY JOIN THE SCHEME? When Suppliers register to the ICT Services Scheme, they agree to the ICT Services Scheme rules, which includes the requirement that all customer contracts will comply with the Procure IT framework Terms and Conditions, or as exempted by the NSW Procurement Board or the Secretary of DCS. There are different terms and conditions depending on the Supplier List that the Buyer uses. Registered Supplier List Regardless of PBD 2020 -02 allowing for the use of Core& Contracts in low-risk procurements up to $1 M (ex GST), suppliers on the Registered supplier List have agreed to procure low risk ICT related goods and services up to a value of $150, 000 (ex GST). Agencies should use the Core& Contracts Terms and Conditions for these procurements. The Core& Contracts reflect the lower risk and value of the scope of works. As such, it has significantly less detail and lower insurance requirements than Procure IT v 3. 2. Advanced Registered Supplier List Agencies using Suppliers in the Advanced registered list can choose between using Core& Contracts or Procure IT v 3. 2 in accordance with PBD 2020 -02 depending on the value and level of risk. Procure IT v 3. 2 is a comprehensive set of terms and conditions that are applicable to highvalue/high-risk ICT contracts. ICT CONSULTANCY ICT Consulting services Suppliers agree to the ICT Consulting Standard Commercial Framework. Details of the ICT Consulting Commercial Framework is available on buy. nsw. gov. au in the ‘How to Buy’ section for ICT Services Scheme (ICT Consulting Commercial Framework PDF).

HOW DO I SELECT SUPPLIER/S? The ICT Services Scheme is governed by the PBD 2020 -05. This means agencies must comply with this PBD for their ICT sourcing strategies. HOW DO I CALCULATE THE CONTRACT VALUE? ADVANCED VS REGISTERED SUPPLIERS Depending on the Contract value (exclusive of GST) and Risk Assessment of the potential contract, buyers may use the Registered suppliers list or Advanced registered suppliers list to select supplier/s. Both Suppliers lists can be accessed under the “List of Suppliers” tab here. For the purposes of the ICT Services Scheme, contract value or price: • is unable to be split into lower-price components. • must be the estimated total price over the term of the contract including any optional extension periods and not a price per annum. • an agency must not split orders to avoid procurement threshold levels and/or governance requirements When determining the most appropriate Supplier listing to use, Buyers should estimate the contract value and consider the following scenarios: MARKET ENGAGEMENT: When Buyers select the appropriate Supplier listing and seek initial proposals, they should factor in these potential scenarios. Where there is a potential for the total contract value to exceed $150, 000 (ex GST), Buyers should source Suppliers from the Advanced Registered Supplier List. NSW Government agencies should conduct procurements in a framework of probity and fairness. Agencies are expected to calculate the contract value as above. Both accredited and unaccredited agencies are expected to be mindful of the EPP Direction and PBD 2020 -05. As a central point of reference, PBD 2020 -05 outlines the minimum threshold and the quotation requirements for procuring ICT related goods and services, including processes for telecommunication services and ICT consultancy. When procuring ICT related goods and services, agencies must follow the process described in the PBD 2020 -05. Limited tendering is allowed under specific circumstances. Covered agencies (as defined in Schedule 1 of the EPP Direction) may invite a limited number of suppliers on the scheme to make a submission when the estimated value of the procurement exceeds the $680 000 (excl. GST) threshold. In these procurements' agencies must follow the guidelines provided in the Scheme rules as per clause 14. 1 Justification for the Limitation and clause 14. 2 Criteria for Selecting Relevant Limited Suppliers. • A contract with a Supplier may result in the need for related “flow-on” contracts with the same Supplier or an alternative Supplier. The cumulative price of the first contract and any potential flow-on related contracts may exceed $150, 000 (ex GST). • The agreed scope of works may change during the term of the customer contract, resulting in an increase in contract price to greater than $150, 000 (ex GST). HOW DO I ASSESS RISK? Assessing risk is a fundamental step for Buyers, as the level of risk will help them determine which Supplier List to use. To assess the risk of an engagement, please refer to the Risk Assessment Toolkit.

FLOW-ON ENGAGEMENTS WHAT IS A FLOW-ON ENGAGEMENT? A flow-on engagement is a further engagement directly related to the original contract, that was not anticipated during the planning phase of your procurement. When planning a procurement, agencies should ensure they have anticipated the wholeof-life contracts costs. This includes extension options, renewals or other mechanisms that may be executed during the life of the contract i. e. transitioning-out costs; early termination fees; contract management risks, etc. It is unacceptable to divide a particular procurement activity into separate orders or use a particular method to calculate the estimated total value for the purpose of circumventing an approach to the open market or avoid obtaining additional quotes. WHAT IS THE MAXIMUM VALUE A FLOW-ON ENGAGEMENT CAN BE? The total value of the original contract and flow-on engagement may be up to three times the value of the original contract and must not exceed the goods and services EPP threshold (currently $680, 000 excl. GST). See PBD-2019 -05 for any changes to thresholds. Agencies must ensure their appropriate financial delegate signs off on any additional costs associated with the contract. The whole cost should be used (original contract + flow on) to determine the appropriate delegate. If a flow-on causes your contract to be over $150, 000 (incl. GST) agencies must ensure they disclose their contract on tenders. nsw. gov. au as per their GIPA Act obligations. Value for money = total lifetime benefits - total lifetime costs WHAT IF MY TOTAL ENGAGEMENT IS OVER THE EPP THRESHOLD? WHEN ARE FLOW-ON ENGAGEMENTS ALLOWED? The relevant Agency may invite a Supplier who has undertaken the initial engagement to submit a proposal for further work, provided the below criteria has been met. Suppliers must demonstrate: 1. Satisfactory performance on the initial contract; 2. Expertise knowledge developed during the first engagement; 3. Value for money for additional related* engagements. *Related means extension of the same contract for some additional Statement of work (SOW) with minimal scope changes in accordance to criteria set out for agencies and suppliers. Agencies must ensure: 1. Risk profile remains the same as the initial engagement; 2. The appropriate contract framework continues to be used depending on risk and value (Core& or Procure IT v 3. 2); 3. Scope of work is directly related to the initial engagement; 4. The flow-on does not exceed the allowable thresholds (see guidance on this page) If the overall engagement (original contract + flow on) is likely to be more than the EPP threshold (see PBD-2019 -05), agencies must run a new procurement exercise in line with PBD 2020 -05 , the ICT Services Scheme Rules and any other applicable policies, legislation and guidelines. WHEN ARE FLOW-ON ENGAGEMENTS NOT ALLOWED? Flow-on engagements for ICT procurements are not allowed when: • the overall engagement value exceeds the threshold specified above; • there is a significant change in scope; • the flow-on is not directly related to the original contract; • the level of risk has changed; • the supplier’s performance on the initial contract has not been satisfactory; • a novation has occurred; or • changes in commercial and non-commercial T&C’s have occurred.

HOW DO I INVITE SUPPLIER/S FOR RFQ? Contract Value Risk Level Which Supplier List to use? Under $150 K Low Registered Under $150 K High Advanced Registered Over $150 K Low/High Advanced Registered HOW DO I CHOOSE SUPPLIERS ON THE SCHEME? It is up to the Buyer to choose which Suppliers to invite proposals from. Buyers are not obliged to seek quotations from all suppliers within a category or sub-category. When procuring ICT goods and services over the value of the $680, 000 (excl. GST) EPP Direction threshold, covered agencies may invite a limited number of suppliers on the Scheme to make a submission. For this agencies must follow the guidelines provided in clause 14. 1 (Justification for the Limitation) and clause 14. 2 (Criteria for Selecting Relevant Limited Suppliers) of the Scheme rules. Covered agencies are defined in Schedule 1 of the EPP Direction. Agencies must refer to PBD 2020 -05 for quotation requirements. Agencies must follow the processes outlined in PBD 2020 -05 when procuring ICT related goods and services, including telecommunication services and ICT consultancy. PBD 2020 -05 also provides guidance for agencies regarding order splitting. Agencies are responsible for selecting a sufficient number of suitable Suppliers to ensure probity, fairness and value in keeping with the PBD 2020 -04 and NSW Government Procurement Policy Framework. WHERE CAN I FIND MORE INFORMATION ABOUT CONDUCTING A RFQ PROCESS? Buyers may use e. Quote to conduct Requests for Quotes (RFQs) under the ICT Services Scheme. Additional information on e. Quote can be found here. HOW DO I IMPROVE QUALITY ASSURANCE? To assist in identifying suitable Suppliers to invite proposals, Buyers can take the following steps: • Check company website; • Review Supplier information on e. Quote; • Contact referees for supporting information about Supplier performance; • Contact the Supplier for an informal discussion about your requirement; • Conduct an informal preliminary Expression of Interest (EOI) or Request for Information (RFI). This can be done by emailing a brief description of your requirement to Suppliers within the applicable sub-category/categories and ask if they have the willingness, capacity and capability to perform the works. Suitable Suppliers that respond can then be invited to submit formal proposals.

WHICH CONTRACT TEMPLATE DO I USE? NSW Government agencies must use the Procure IT Framework to buy information and communications technology (ICT) related goods and services. This is mandated by Procurement Board Direction 2020 -02. The Scheme adopts Procure IT as a Contracting Framework which comprises of the contracts Core& and Procure IT v 3. 2. Procurement value/risk Customer Contract to use Which parts to include when drafting a customer contract? Where can I find further guidance? Up to $1 million and low-risk Core& Contracts 1. Core& One 2. Core& Combined 1. Core& One ü Core& One Core Terms; and ü Core& One Solutions Requirement, depending on the ICT goods or service. 2. Core& Combined ü Core& Combined Core Terms; and ü Part A: Combined Common Terms & Part B Combined Solution Requirements. The Core& Contracts Guidelines provides guidance when preparing a customer contract under the Core& Contracts. Over $1 million and/or high-risk Procure IT v 3. 2 ü ü ü Part 2: Customer Contract executed by the Customer and Contractor. It is mandatory that there is one executed copy for each contracted Supplier; Schedules including General Order Form executed by Customer and Contractor. It is mandatory that this is executed for each and every Order; Applicable Module Order Form/s. This is recommended for Orders that are complex or high value or high risk. Multiple orders with same supplier using Procure IT v 3. 2 For multiple Orders with the same Supplier, the Part 2: Customer Contract only needs to be executed once. However, Buyers should note that for each subsequent order both parties execute a separate General Order Form including applicable Schedules and Modules, regardless of whether it is with the same Supplier. The Procure IT v 3. 1 User Guide (pages 40 -44) continues to be valid guidance when preparing a customer contract under Procure IT v 3. 2. If Buyers want to find out more about the changes in Procure IT v 3. 2, they can read this guidance note. Do I need to use Part 1: Head Agreement for Procure IT v 3. 2? Buyers on the ICT Services Scheme do not need to include Part 1: Head Agreement of Procure IT (version 3. 2) in the Customer Contracts (“Orders”) placed with Suppliers on the Advanced Registered supplier list.