Procurement and contract Negotiations

The HSA Standard Terms is a header agreement used across government agencies. It can’t be amended for a specific contract with an NGO service provider.

The NSW Procurement Board is the only authorised body to make changes to the HSA Standard Terms.

However, during the procurement process, some parts of the Schedule can be negotiated.

The purpose of the Schedule is to record specific conditions relevant to a funded service being contracted, such as payments, outputs and service activity. The scope of what can and can’t be negotiated in the Schedule is defined during the procurement process, by program policies, or by Program Specifications attached to the Schedule.

The Supplementary Conditions can’t be negotiated. They apply to all DCJ Schedules because they reference DCJ-specific requirements and work in conjunction with clauses in the Standard Terms.

Additional Supplementary Conditions

Unique conditions about the service or conditions applicable only to a particular service contract can be inserted at clause 19 of the Schedule: Additional Supplementary Conditions. Clause 19 is only used in exceptional circumstances. This should only be used on exceptions basis. Before you consider inserting Additional Supplementary Conditions check whether the content can fit within the body of the contract.

The HSA doesn’t apply to all DCJ contracts or funding arrangements

The HSA isn’t used for:

• asset-based contracts or contracts with a significant asset-based component, such as housing, vehicles and ICT
• goods and services provided directly to DCJ (including consultancy services or labour hire contracts)
• social impact investment transactions, such as social benefit bonds
• leases, licenses or other similar legal documents
• prequalification contracts.

In addition, the HSA doesn’t apply to funding grants. Grants are generally paid to be of benefit to communities, and have a wider public good associated with the funding. This is different from public funding paid to an NGO to deliver a service that benefits an individual or group. The conditions attached to a grant are different in nature to the conditions required for funding of human services.

2019 version of the HSA

NSW government agencies in consultation with peak organisations representing the human services sector reviewed the HSA in 2019.

The review sought to make practical changes to the Standard Terms and to apply the lessons learned from the first two years of using the HSA.

Changes to the Standard Terms

The review resulted in the following amendments to the 2017 version of the Standard Terms:

• Clause 1.1 Definitions
  • Amended to define ‘Financially Stable’.
  • Amended to define ‘Officer’.
• Clause 5.2 Compliance with laws, standards and policies
  • Inserted new sub clause 5.2(d) to explicitly require service providers to comply with their own constitution.
• Clause 7 Conflicts of interest
  • Amended clause 7.1 to require service providers to make diligent enquiries instead of a warranty.
    
  • Amended clause 7.2(a) to include the option to ‘manage’ conflicts of interest.
  • Inserted new clause 7.3 to allow agencies to notify service providers of conflicts of interest they must address.
• Clause 9.8 Additional contributions
  • Simplified clause 9.8(a).
  • Removed clause 9.8(b).
• Clause 13.2 Termination without fault
  • Amended clause 13.2(a) to change the termination without fault notice period from 45 days to 90 days.
• Clause 25 Security
  • Inserted new provisions for security procedures and notifying the agency of a security breach.
    

Changes to the Schedule

The changes made to the Standard Terms also required the following amendments to the Schedule:

• simplified the Additional Contributions and Additional Funds clauses to reflect the changes in clause 9.8 of the Standard Terms
• amended the Intellectual property clause to be consistent with clause 16 of the Standard Terms
• amended the Termination Without Fault clause to be consistent with clause 13 of the Standard Terms
• changed ‘Program Guidelines’ to ‘Program Specifications (Attachment 1)’.

Managing two versions of the HSA

NGO service providers contracted with DCJ on the 2017 version of the HSA can move over to the 2019 version via a Letter of Variation. This is an agreement to apply the most recent version of the HSA to existing contracts without the need to terminate them and create new contracts.

2020 review of the HSA

DCJ, along with other government agencies, will be reviewing the HSA again in late 2020.

NGO service providers and human services sector peak organisations will be consulted on the scope of the review, as well as on any changes to the HSA.

Support and assistance

You can find out more about the HSA by reading:

• the HSA Standard Terms (PDF, 984.2 KB) and Schedule (PDF, 201.8 KB)
• the Justice Connect, Not-for-profit Law, Guide to the Human Services Agreement
• the NSW Government procurement of human services from NGOs.

For further information, email Partnerships Procurement and Contracts