When you are working with the Australian Government, you have certain obligations as a supplier. These will be outlined in the terms and conditions of any contract you enter into with an Australian Government organisation.
To help you understand these obligations, this section outlines some common requirements you may be subject to under a contract with an Australian Government organisation. This section is based on the Commonwealth Contract Terms, though bespoke contracts will generally include similar provisions.
This section is intended to complement the information available under:
Commonwealth Contract Terms
Australian Government contracts are likely to include the Commonwealth Contract Terms. Use of the Commonwealth Contract Terms is mandatory for procurements under $200,000 undertaken by relevant Australian Government organisations, except in specific situations (outlined in Resource Management Guide No. 420), and is encouraged for contracts valued up to $1 million.
Using these standard terms and conditions without alteration means that it is much faster and cheaper for Australian Government organisations and suppliers to enter into a contract, and they do not have to seek bespoke legal advice for every purchase.
The Commonwealth Contract Terms also include requirements that must be included in contracts with an Australian Government organisation and are not common in standard private sector contracts. These include, for example, national security obligations, privacy obligations, and allowing access to records if the Australian National Audit Office audits the contract.
In certain circumstances, Australian Government buyers may use bespoke contracts, or slightly different templates. For example, the if your business is operating in an ICT‑related field, you may also wish to review the digital sourcing contract templates available on BuyICT.gov.au.
Even if you enter into a bespoke contract with an Australian Government organisation, it is likely to contain similar terms and conditions to the Commonwealth Contract Terms, including covering matters such as:
- managing conflicts of interest
- managing confidential and personal information
- obtaining and maintaining appropriate licenses, approvals and warranties
- auditing arrangements
- liability and indemnification
- dispute resolution
- managing significant events
- compliance with relevant laws and Australian Government policies.
General obligations
The Commonwealth Contract Terms outline how the supplier and the customer (the relevant Australian Government organisation) work together to deliver outcomes under the contract. This includes being clear that:
- neither party is authorised to bind or represent the other party
- each party must ensure that its officers, employees, agents or subcontractors do not represent themselves as being an officer, employee, partner or agent of the other party.
The Commonwealth Contract Terms also outline that both parties agree to:
- communicate openly with each other and cooperate in achieving the contractual objectives
- act honestly and ethically
- comply with reasonable commercial standards of fair conduct
- consult, cooperate and coordinate activities to identify and address any overlapping work health and safety responsibilities
- comply with reasonable directions and procedures relating to work health and safety, record keeping and security at each other’s premises or facilities.
The Commonwealth Contract Terms also set out both parties’ obligations, and processes relating to:
- payment
- transition-in and transition-out requirements
- termination of the contract, either for convenience, or for a specific cause.
Similar general obligations and processes will be outlined in bespoke contracts.
Further information on payment terms is included in the Getting Paid section of this website.
Managing conflicts of interest
When you enter into a contract with an Australian Government organisation, you will need to disclose and manage any conflicts of interest relating to the contract.
A conflict of interest is any real or apparent situation where the personal interest of a supplier, or its officers, employees, agents, or subcontractors, could improperly influence the supplier’s performance of the contract.
This could include, for example:
- material interests
- personal relationships
- secondary employment and affiliations.
The Commonwealth Contract Terms outline how a supplier is required to manage any conflicts of interest relating to the contract. This includes requiring that suppliers:
- warrant that, other than any conflicts of interest previously declared in writing to the customer at the commencement of the contract, no conflicts of interest exist
- complete a conflict of interest declaration at any time during the term of the contract in a manner specified by the customer
- immediately report any conflicts of interest to the customer as soon as they arise, or are likely to arise during the terms of the contract, and provide the customer with a written report setting out relevant information
- comply with any reasonable requirements relating to a conflict of interest.
The Commonwealth Contract Terms are also clear that if a supplier fails to notify the customer of a conflict of interest, or does not comply with the customer’s reasonable requirements to resolve or manage a conflict of interest, the customer may terminate or reduce the scope of the contract.
Similar requirements will be outlined in bespoke contracts.
Subcontracting and specified personnel
When you enter into a contract with an Australian Government organisation, you will need to provide details of all subcontractors you will work with to deliver services under the contract.
When working with subcontractors to deliver work under a contract, the Commonwealth Contract Terms require that suppliers:
- ensure that any subcontractors perform the services specified in the contract
- do not subcontract any part of their obligations under a contract, or replace any approved subcontractors, without the prior written consent of the customer
- provide the customer with details of all subcontractors engaged to provide goods and services under the contract (noting the customer may be obliged to publicly disclose such information).
Depending on the nature of the work you are completing for an Australian Government organisation, you may be required to outline any specified personnel delivering work under the contract.
When specified personnel are set out in a contract, the Commonwealth Contract Terms require that suppliers:
- ensure any specified personnel perform the services specified in the contract
- do not replace any specified personnel without the prior written consent of the customer
- at the customer’s reasonable request, replace any specified personnel at no additional cost.
Depending on the work being undertaken under the contract, specified personnel may be required to obtain and maintain relevant security clearances.
Further information on security clearances is available on the Security Requirements section of this website.
Similar provisions relating to subcontractors and specified personnel will be outlined in bespoke contracts.
Licenses, approvals and warranties
When you are entering into a contract with an Australian Government organisation, you will need to ensure that you have all required licenses, approvals and warranties to provide the goods and / or services under the contract.
The Commonwealth Contract Terms require suppliers to:
- obtain and maintain all relevant Intellectual Property rights, licenses or any other approvals required to lawfully provide the goods and services to the customer
- provide any relevant warranties for the provision of any goods.
Similar requirements will be outlined in bespoke contracts.
Liability and indemnification
When you enter into a contract with an Australian Government organisation, it will outline your obligations as a supplier in terms of liability and indemnification, or compensation for harm or loss.
The Commonwealth Contract Terms require that suppliers indemnify the customer for any damage claim, cost or loss resulting from any negligent or wilful breach of obligations or representations under the contract, noting that:
- the supplier’s obligation to indemnify the customer reduces proportionally to the extent that the customer has contributed to the claim, cost or loss
- where the supplier is a member of a scheme that limits civil liability arising from their professional services, the supplier’s liability shall not exceed the maximum amount specified by that scheme (where the scheme applies to work delivered under the contract).
The Commonwealth Contract Terms also require that the supplier maintain adequate insurances throughout the contract, and provide the customer with proof when reasonably requested. Australian Government organisations should not expect suppliers to take out insurance until a contract is awarded.
Further information on insurance requirements is available on the Minimum requirements section of this website.
Similar requirements will be outlined in bespoke contracts.
Dispute resolution
When you enter into a contract with an Australian Government organisation, it will typically outline specific processes and expectations for managing disputes under the contract.
The Commonwealth Contract Terms require that, for any dispute under the contract, both the supplier and customer agree that:
- in the first instance, both contract managers try to settle the dispute through direct negotiation
- if unresolved, the contract manager claiming that there is a dispute must provide the other contract manager a notification in writing setting out the details of the dispute and a proposed solution
- if the proposed solution is not accepted by the other contract manager, each contract manager will nominate a more senior representative, who has not had prior direct involvement in the dispute, who will try and settle the dispute by direct negotiation
- if the dispute is still not settled, the customer will refer the dispute to an appropriately qualified mediator, for mediation to commence
- if the dispute is still not settled, either party may commence legal proceedings, or by agreement, continue the mediation process for a defined period agreed by both parties.
Each of these steps have specific time frames that are outlined in the Commonwealth Contract Terms.
The Commonwealth Contract Terms also require that:
- nominated representatives for both the supplier and the customer attend mediation, and have the authority to bind the party and act in good faith to genuinely attempt to resolve the dispute
- the supplier and the customer each bear their own costs for dispute resolution, with the customer to bear the costs of a mediator
- the supplier continue their performance under the contract unless requested in writing by the customer not to do so.
Bespoke contracts will also generally outline dispute resolution processes, though specific processes and time frames may be different from those outlined in the Commonwealth Contract Terms.
Compliance with relevant legislation and policy
When you enter into a contract with an Australian Government organisation, it will typically include provisions requiring you to comply with relevant laws.
These could include, for example:
- abiding with relevant workplace health and safety obligations or workers compensation insurance requirements
- complying with taxation legislation requirements
Information on some other relevant legislation and policy requirements, including Procurement Connected Policies, is available on the Minimum Requirements section of this website.
The Commonwealth Contract Terms require that the supplier:
- comply with, and ensure its officers, employees, agents and subcontractors comply with, all laws applicable to the contract and warrant that it will not cause the customer to breach any laws
- comply with, and ensure its officers, employees, agents and subcontractors comply with, any Australian Government policies relevant to the goods and / or services provided under the contract
- provide reports and other information regarding compliance with applicable law and Australian Government policy where reasonably requested by the customer, or otherwise required by the applicable law or policy.
If the supplier becomes aware of any actual or suspected breach of these requirements, the Commonwealth Contract Terms also require that the supplier:
- immediately report the matter to the customer
- provide a written report in time frames specified in the contract
- comply with any reasonable directions by the customer in relation to any investigation or further reporting of the actual or suspected breach.
Similar requirements will be outlined in bespoke contracts.
Auditing and access to premises and records
When entering into a contract with an Australian Government organisation, you will be required to agree to specific requirements around access to records and auditing arrangements to support them in complying with relevant legislative requirements.
In the Commonwealth Contract Terms, these requirements include:
- maintaining, and ensuring that subcontractors maintain, proper business and accounting records relating to performance of the contract
- agreeing to provide the customer, or its nominee, with access to premises, personnel, computer systems, documents and other records, and all assistance reasonably requested for any purpose associated with the contract, or any review of the supplier or customer’s performance under the contract, including in connection to requests made under the Freedom of Information Act 1982, or an audit or review by the Australian National Audit Office
- not transferring, or permitting the transfer of, custody or ownership, or allow the destruction of any Commonwealth record as defined in the Archives Act 1983 without the prior written consent of the customer, and returning all Commonwealth records to the customer at the conclusion of the contract.
Similar requirements will be outlined in bespoke contracts.
Protecting confidential information and personal information
As part of working with the Australian Government, your business, or personnel, may need to access personal or confidential information provided by the Australian Government organisation as part of delivering the required goods and services.
The Australian Government organisation will also generally be required to protect personal and confidential information provided by the supplier.
The Commonwealth Contract Terms include specific provisions to protect personal and confidential information. Similar requirements will be outlined in bespoke contracts.
Confidential information
Confidential Information means any information that any party does not wish to be shared outside of those involved in the contract. It can include anything that has been acquired, developed, or made available to any of the parties.
It includes, but is not limited to information:
- specifically identified as confidential in the contract
- where disclosure would cause unreasonable detriment to the owner of the information or another party
- where the information was provided under an understanding that it would remain confidential.
The Commonwealth Contract Terms require that the supplier:
- not disclose any confidential information without the prior written approval from the customer
- notify the customer without delay, if required by law, an order of the court, or a stock exchange to disclose relevant confidential information, and provide the text of the disclosure in writing as soon as practicable
- if requested by the customer, give a written undertaking relating to the nondisclosure of the customer’s confidential information in a form acceptable to the customer.
The Commonwealth Contract Terms also require that the customer keep any specifically confidential information provided by the supplier in connection with the contract confidential (where it has been agreed in writing to keep this information confidential).
The Commonwealth Contract Terms make it clear that in certain instances, the customer may disclose this information for the purpose of managing the contract, or if it is required to disclose the information by law, a Minister or a House or Committee of Parliament, or for accountability or reporting purposes.
Similar requirements will be outlined in bespoke contracts.
Personal information
Personal information refers to information which could identify an individual, as outlined in the Privacy Act 1998. Personal information may include, for example:
- an individual’s name, signature, address, phone number, or date of birth
- credit information
- employee record information
- photographs
- internet protocol (IP) addresses
- sensitive information
To protect any personal information suppliers access while working with an Australian Government organisation, the Commonwealth Contract Terms require suppliers to:
- comply with the Privacy Act 1998 and the Australian Privacy Principles
- comply with Notifiable Data Breach Scheme requirements
- ensure information, security and property provided by the Australian Government organisation is protected from unauthorised access or use by a third party.
Similar requirements will be outlined in bespoke contracts.
Notification of eligible data breaches
The Commonwealth Contract Terms set out specific requirements for suppliers relating to eligible data breaches under the Notifiable Data Breach Scheme.
In this context, an eligible data breach is unauthorised access to, or unauthorised disclosure of personal information, or a loss of personal information, where this is likely to result in serious harm to one or more individuals.
The Commonwealth Contract Terms make it clear that if a supplier:
- suspects there may have been an eligible data breach in relation to any personal information held under a contract, they must immediately report it to the customer, provide a written report, and carry out an assessment under the Notifiable Data Breach Scheme
- is aware there has been an eligible data breach in relation to a contract, they must take all reasonable action to mitigate the risk of the breach causing serious harm to any individual to whom the personal information relates, take all other actions necessary to comply with the Privacy Act 1998, and take any other action as reasonably directed by the customer.
Similar requirements will be outlined in bespoke contracts.
The Office of the Australian Information Commissioner provides guidance on identifying and assessing eligible data breaches, and notification processes.
Other legislative requirements
The Commonwealth Contract Terms also outline further specific legal and legislative requirements suppliers must comply with when working with Australian Government organisations. These include:
- acknowledging that giving false or misleading information to the Commonwealth is a serious offence under section 137.1 of the schedule of the Criminal Codes Act 1995.
- taking all reasonable steps to prevent and detect fraud in relation to the performance of the contract, and acknowledging that an occurrence of fraud will constitute a breach of contract
- agreeing that if an investigation finds that the supplier or its officers, employees, agents or subcontractors have committed fraud, or failed to take reasonable steps to prevent fraud, the supplier must reimburse or compensate the customer in full
- agreeing to comply with, and requiring subcontractors to comply with, all applicable laws relating to taxation
- becoming familiar with the Public Interest Disclosure Act 2013, and acknowledging that service providers and subcontractors under a Commonwealth contract, who suspect wrongdoing in the Commonwealth public sector, may raise their concerns under the Public Interest Disclosure Act 2013
- acknowledging that in providing goods and services under a contract, that suppliers become contracted service providers for the purposes of the National Anti-Corruption Commission Act 2022 (NACC Act), and must comply with any reasonable request, policy or direction issued by the customer and otherwise cooperate with the customer in relation to any action taken by the customer required or authorised by the NACC Act.
Similar requirements will generally be outlined in bespoke contracts.
Significant events
The Australian Government expects that all suppliers to Australian Government organisations abide by the highest ethical standards. Australian Government organisations monitor the ethical behaviour of suppliers throughout the term of the contract.
To strengthen Australian Government expectations regarding the ethical conduct of suppliers, the Commonwealth Contract Terms include specific obligations suppliers must comply with in relation to ‘significant events,’ and emphasise that a failure to comply with these obligations will be a material breach of contract.
In this context, a ‘significant event’ is:
- any adverse comments or findings made by a court, commission, tribunal or other statutory or professional body regarding the conduct or performance of the supplier, or its officers, employees, agents or subcontractors, that impacts, or could be reasonably perceived to impact on, their professional capacity, capability, fitness or reputation
- any other specific matters, including the commencement of legal, regulatory or disciplinary action involving the supplier, or its officers, employees, agents or subcontractors, that may adversely impact on compliance with Commonwealth policy and legislation, or the Commonwealth’s reputation.
The Commonwealth Contract Terms outline requirements for notification of significant events, and remediation plans, which are summarised below. Similar requirements will generally be included in bespoke contracts.
Notification of significant events
When a supplier becomes aware of a significant event, the Commonwealth Contract Terms require that they immediately notify the customer in writing, including:
- a summary of the significant event
- the date it occurred
- whether any specified personnel or other personnel engaged in connection with work being delivered under the contract were involved.
If a customer notifies a supplier in writing that an event may be considered a significant event, the Commonwealth Contract Terms require the supplier to provide a written notification, including:
- a summary of the significant event
- the date it occurred
- whether any specified personnel or other personnel engaged in connection with work being delivered under the contract were involved.
The Commonwealth Contract terms also require the supplier to provide any additional information regarding the significant event, when requested by the customer.
Similar requirements around significant event notification processes will be outlined in bespoke contracts.
Remediation plans
The Commonwealth Contract Terms require the supplier to prepare a draft remediation plan when requested by the customer, and submit the plan to the customer’s contract manager for approval.
In this context, a draft remediation plan should include:
- how the supplier will address the significant event in the context of work being delivered under the contract, including confirmation that implementation of the remediation plan will not impact on the delivery of work under the contract, or the supplier’s compliance with other obligations under the contract
- how the supplier will ensure events similar to the significant event do not occur again
- any other matters reasonably requested by the customer.
After receiving the draft remediation plan, the customer will review the plan, and either approve the plan, or provide the supplier with details of any required changes. The supplier must then make any changes reasonably requested by the customer, and resubmit the draft remediation plan for approval.
Once a remediation plan has been approved, the supplier must comply with it, and provide reports and other information about progress in implementing the remediation plan as reasonably requested by the customer.
Similar requirements around significant event remediation plans will be outlined in bespoke contracts.
