The Digital Transformation Agency removed Australia's largest technology buyers from vendor negotiations for whole-of-government agreements, according to a 233-page independent review released this week.
Defence, the ATO, Services Australia, DEWR, and Home Affairs no longer participate in negotiating the single seller arrangements (SSAs) they depend on. The DTA replaced direct agency involvement with a senior executive sponsoring group, effectively sidelining the departments that account for the bulk of federal tech spending.
The consequences are tangible. "Some larger agencies stated they could negotiate the same or even better discounts or terms and conditions for themselves, relative to those in the SSAs," the Solstice IT review states. Current SSAs cover AWS, IBM, Microsoft, Oracle, Rimini Street, and SAP.
The DTA claims $1.6 billion in cost avoidance from these agreements over five years to mid-2024. That figure looks less impressive when major users say the terms are worse than what they could secure independently.
The review recommends reinstating "a select group of buyers (e.g. Defence, ATO) at the negotiating table" to achieve better outcomes and mitigate three of seven identified SSA risks. Agencies also flagged the agreements as complex and opaque, suggesting structural issues beyond pricing.
This approach contradicts the DTA's stated goal of leveraging collective bargaining power, particularly for smaller agencies lacking negotiating muscle. When your biggest buyers are excluded, you're not operating from a position of strength.
The timing matters. With Commonwealth Procurement Rules updated in October 2025 to raise thresholds to $125,000 and prioritize SMEs, and the DTA's 2025-26 Corporate Plan emphasizing procurement reform, the agency needs credibility with both vendors and users.
History suggests centralized procurement works when the center understands what the edges actually need. The DTA previously involved major buyers for good reason. Walking that back produced predictable results.
The real question: will the DTA trial the recommended approach, or will Defence and the ATO continue watching from the sidelines while someone else negotiates their contracts?