Department of Finance, Services and Innovation
Category
Department of Finance, Services and Innovation Circular
Identifier
DFSI-2017-01
Status
Active

DFSI-2017-01-Telecommunication Sharing and Commercial Principles

Description:

Endorse the Link Sharing Principles and Commercial Principles, developed in consultation with agencies and industry, to reduce network duplication and increase contestability in the procurement of telecommunication services.

FunctionProcurementSubjectContracting Out
Information and Communications TechnologyTelecommunications

The NSW Government Telecommunications Strategy was endorsed by the ERC in October 2016 and recommended government agencies commit to principles for:

  • Sharing of telecommunication networks to reduce duplication and expenditure on fixed data connectivity
  • Going to market for telecommunication services to increase contestability and reduce unit prices.

Agencies are required to apply these principles when seeking to purchase any new telecommunications services or build new WAN links.

Link Sharing Principles provide guidance to agencies with network sharing opportunities where:

  • Agencies are geographically co-located at the same premises or within close proximity

Substantiated benefits arise from sharing available capacity on existing data links

The Link Sharing Principles are summarised as follows:

  • Shared vision – agencies agree and commit to taking steps to increase sharing of existing or proposed network arrangements
  • Interoperability – technology choice and networks are architected in a way that facilitate sharing and future interconnection
  • Reasonable access – agencies will not unreasonably withhold access to existing capacity (such as fibre) from other government agencies
  • Shared benefit – agencies participating in a sharing arrangement are to share in the financial benefit arising from a joint approach
  • No impact to front line services – sharing should not be undertaken where it will impact the delivery of frontline services and critical programs
  • Operations and maintenance – the government provider will take the lead to resolve any service related issues in accordance with agreed service levels.

The Commercial Principles are a guide implemented in the context of each agencies individual circumstance. Implementation should be tailored to market conditions, with exemptions allowed where it can be demonstrated that the application fails to deliver value for money on a whole of government basis.

The Commercial Principles were developed in consultation with agencies and industry.  The principles include:

  • Minimise service bundling – ensure services are unbundled to maximise contestability 
  • Exploit market dynamics – ensure there is a mechanism to take advantage of unit price fluctuations
  • Consider future demand  - flexibility to adjust to increases or decreases  in demand for services
  • Act as one - agencies working together to achieve value for money
  • Co-termination – structure contracts to minimise impediments in transitioning to future suppliers
  • Strategic alignment – new contracts be developed in consideration of broader ICT policy and technology strategies.

 For a copy of the principles and for further detail on how to apply these principles, contact the Telecomms Optimisation Group at TOG@finance.nsw.gov.au.