Updates to the Commonwealth Contracting Suite - effective 5 September 2022

What you need to know:

• On 5 September 2022, the Commonwealth Contracting Suite (CCS) was updated to incorporate new clauses into the Approach to Market, Contract and Purchase Order Terms.
• The most significant new clauses introduced into the CCS:
• expand the scope of existing indemnities and warranties provided by suppliers to the Commonwealth;
• introduce stronger requirements concerning the protection of personal information supplied during the tender process and while in contract;
• introduce clear reporting obligations for data breaches;
• require stronger commitments from suppliers concerning conflict of interest; and
• re-affirm suppliers’ abilities to utilise public interest disclosure processes when in contract with the Commonwealth.

What you need to do:

• Commonwealth agencies currently utilising the CCS in a procurement process will need to update their Approach to Market or Contract documentation to incorporate these new clauses, depending on the stage of the procurement process they have reached.
• Companies currently participating in a tender process with the Commonwealth where the CCS has been utilised need to understand the requirements and risks that these newly introduced clauses may create.

Detailed Insights

Indemnities and Warranties

Supplier indemnities and warranties in favour of the Commonwealth have been expanded to specifically include the officers, employees, agents and Subcontractors of Suppliers.  

Clause 14.1 of the Commonwealth Contract Terms and Purchase Order Terms has been expanded to address breaches of obligations or representations under contract that are made by officers, employees, agents or Subcontractors of the Supplier.  Additionally, the warranty in clause 21.1 of the Commonwealth Contract and Purchase Order Terms (which requires Suppliers to comply with applicable laws in the jurisdiction of performance) has been expanded to include a new warranty that the Supplier will not cause the Commonwealth to breach any laws.

Accordingly, companies delivering supplies or services to the Commonwealth under a CCS Contract or Purchase Order should ensure to the best of their ability that their acts or omissions, including the acts or omissions of its officers, employees, agents and Subcontractors do not cause the Commonwealth to violate any laws.

Where a Supplier was previously only required to make a declaration regarding any real or perceived conflicts of interest that might arise or currently exist, clause 3.1 of the Commonwealth Contract Terms now requires a warranty that no conflicts of interest relevant to the performance of the Contract exist at commencement.  Companies should seek specific probity advice before providing this warranty to the Commonwealth, to ensure that no actual or perceived conflicts of interest exist prior to the commencement of the contract.

The risks associated with these new warranties could be managed through the use of carefully tailored ‘flow-down’ clauses in subcontracts, as well as the implementation of legislative compliance and risk management controls over the life of any Contract or Purchase Order which utilises the CCS Terms.

Personal Information Protections

New clauses have been introduced in both the Approach to Market and Contract Terms that commit Potential Suppliers and Suppliers to providing the Commonwealth with personal information relating to their company, its officers, employees, agents or subcontractors for the prevention, detection or investigation of fraud or security breaches.

Importantly, both clause 9.1 of the Approach to Market Terms and clause D.2 of the Commonwealth Contract Terms require the Potential Supplier or Supplier to warrant that they have obtained consent or provided reasonable notification prior to disclosing personal information in accordance with the Privacy Act 1988 (Cth).

Before disclosing any personal information during a fraud or security breach investigation, companies should seek specialist advice on the consent and notification requirements under the Privacy Act 1988 (Cth) to prevent any unintentional violations of this warranty.

Notifiable Data Breaches

Under the newly introduced clause 21.C of the Commonwealth Contract Terms, Suppliers are now obligated to immediately report data breaches of personal information that they hold as a result of the contract.

Suppliers are also required to provide a written report on the breach within three business days to the Commonwealth, carry out an assessment of the breach in accordance with the requirements of the Privacy Act 1988 (Cth), and take all reasonable steps to mitigate the risk of serious harm to any individual that the personal information relates to.

Conflicts of Interest

A number of new clauses have been introduced into the Commonwealth Contract Terms to strengthen Suppliers’ obligations concerning the declaration and reporting of conflicts of interest to the Commonwealth:

• Under clause 3.2, the Commonwealth may now request that the Supplier execute a conflict of interest declaration at any time during the term of the Contract.
• Clause 3.3 compels the Supplier to immediately report a conflict of interest to the Commonwealth as soon as they become aware that it has arisen, or is likely to arise, and to additionally provide a written report within three business days of the Supplier becoming aware of its existence or potential to arise.
• The most significant introduction to the Commonwealth Contract Terms concerning conflicts of interest is clause 3.4, which provides the Commonwealth with the right to terminate or reduce the scope of the Contract where the Supplier fails to notify the Commonwealth of a conflict of interest, or resolve or manage the conflict of interest appropriately.

Public Interest Disclosure

New clauses require Suppliers to familiarise themselves with the Public Interest Disclosure Act 2013 (Cth) and acknowledge that service providers and their subcontractors under Commonwealth contracts are able to raise concerns of suspected wrongdoing within the public sector.

Clause J.1 of the Commonwealth Contract Terms and clause H.1 of the Purchase Order Terms re-assure companies in contract with the Commonwealth of their rights to participate in public interest disclosure processes as ‘public officials’.

Further Information

For further information regarding the updates to the CCS, and to access the latest Approach to Market, Contract, and Purchase Order Terms, please visit the Department of Finance’s website.

Authors:

Rory Alexander, Director & Principal

Nick Faulks, Senior Associate

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