This site was developed to support the Government 2.0 Taskforce, which operated from June to December 2009. The Government responded to the Government 2.0 Taskforce's report on 3 May 2010. As such, comments are now closed but you are encouraged to continue the conversation at agimo.govspace.gov.au.

Draft Project Fund Contract

2009 September 30
by Peter Alexander [Taskforce Secretariat]

For your information I am posting the contract with which successful Gov 2.0 Taskforce project proposals will be commissioned. 

This contract will be between Microsoft and the successful Gov 2.0 Taskforce project proposer.  This is necessary as the Project Fund  has been established in partnership with Microsoft from a fund established by Microsoft as a consequence of previous government sales. The contracts are supported by a Deed that between the Department of Finance and Deregulation and Microsoft that ensures the aims of the Taskforce are supported by the Fund.

21 Responses
  1. 2009 September 30

    Hi Peter
    I was just thinking yesterday that it would be a smart move on the part of the Secretariat to respond to off-site chatter about this bit of “fine print”. It’s great that you have. No doubt people will have more questions about the relationship with Microsoft but this nugget of openess should be appreciated and well recieved.
    Thank you, Sally

  2. 2009 September 30

    This contract really needs to be reviewed in the context of the open innovation it is intended to promote!

    When the Round One projects were announced, the Project Fine Print set out some key terms and said in relation to the contract with Microsoft that:

    “The contracts will be standard perform a service get paid ones without any tricky clauses. We want the contracts to be signed quickly so expect that you will be able to do so.”

    and

    “There will, of course, be other fine print you will need to read, but the rest can wait until the successful bidders have been selected and the contracts are awarded!”

    As a lawyer I thought it was a little unusual to suggest that the fine print should be read after the contracts were awarded (!), given that government tenderers are
    usually required to agree to specified terms at the time of tendering, but in the context of what the Taskforce is wanting to achieve was willing to go with the flow and wait until the terms were published and then review them (before agreeing to them!).

    As an organisation who has provided a quote for the “4. Copyright law and intellectual property” project in Round One, we are concerned by a number of the clauses and are preparing a list of the ones that we are concerned with that we will, in the spirit of openness, post here.

    I think this is going to be a huge learning experience for all involved, on the road to gov2au!

  3. 2009 September 30

    Thankyou for releasing the contract so that we could have a look at it. Unfortunately I think that the contract suffers from a number of issues.

    While I have written a post going into some detail as to what I believe these issues are here:

    http://collaborynth.com.au/blog/Working_with_the_Gov2_Taskforce_I_need_to_sign_a_contract_with_who

    I think the one of the biggest issue this contract has is who potential collaborators will be signing up with. Those of us who have been looking at submitting projects and tenders were expecting to be signing up with the Taskforce or its descendants, not a private company. Nor did we think that that private company would have the power to demand the replacement of “employees” (something that’s going to be an issue with community orgs), or enforced training.

    • 2009 September 30

      Hi James

      The fact that people submitting quotes would be required to sign a contract with Microsoft was, literally, in the Fine Print.

      “Fine Print” is always a troubling concept for us lawyers, as we have the view that people entering into agreements should consent to their terms, and preferably give “informed consent”, but as Creative Commons has shown their is definitely a case for the creative use of icons and other methods to aid people’s understanding of the key concepts of an agreement (see also the Standard Form of Agreement permitted under Telco law).

      Given the historic relationship between Microsoft and some sections of the FOSS community, however, I think that this issue should have been in the main text of the request for quotes rather than in the Fine Print. The terms of the contract should also have been posted, but can understand the Taskforce has a tight deadline it is trying to achieve and perhaps didn’t want us lawyers to slow down the quoting process!

      Hopefully we can all work together to develop a document that meets the needs of all parties concerned – @katska has suggested a wiki, which happens to have been part of our Round 1 quote (the results of which are yet to be announced).

      • 2009 September 30

        “The fact that people submitting quotes would be required to sign a contract with Microsoft was, literally, in the Fine Print.”

        I missed that and I’ll cop that sweet. However I still have issues with signing a contractors contract like the one being proposed.

        “Given the historic relationship between Microsoft and some sections of the FOSS community, however, I think that this issue should have been in the main text of the request for quotes rather than in the Fine Print. The terms of the contract should also have been posted, but can understand the Taskforce has a tight deadline it is trying to achieve and perhaps didn’t want us lawyers to slow down the quoting process!”

        For me, it’s not about Microsoft per se. As I said in the blog post, I would have the same problem if it were any other private company, be it Microsoft, Google or some other player.

        “Hopefully we can all work together to develop a document that meets the needs of all parties concerned – @katska has suggested a wiki, which happens to have been part of our Round 1 quote (the results of which are yet to be announced).”

        Believe it or not I don’t see this as a death knell for the process. Rather more like a two steps forward, one step back type situation. I would love to work with the taskforce and Microsoft in putting something together which would solve most of the issues.

        • 2009 September 30

          Yes, whoever the organisation, it is important to know you’ll be entering into an agreement with a third party if you are successful.

          I also think that this is a great opportunity for Microsoft and the Government 2.0 Taskforce to engage with the Development Community to devise terms that support and encourage open innovation – you have to start somewhere and the great thing is that a start has been made!

          It is just a shame that the starting document is “one step back”.

  4. 2009 September 30

    Matthew Landauer and Rob Manson’s great initial thoughts are accessible directly here:

    http://groups.google.com.au/group/openaustralia-dev/browse_thread/thread/170d24abb56134ef

  5. 2009 September 30
    Steve permalink

    The winner of a competition run by the Australian Government has to sign a contract with a private (American based) company.

    Regardless of the contract contents, I think that is concept is quite peculiar. A person or company who wins a government competition has to sign a contract with Microsoft. Really quite bizarre.

    Who else has signed contracts with Microsoft? Are there any other aspects of this Government 2.0 endeavour that not supported by the Australian Government.

    Also, I am wondering if the spell-checker for these posts can be changed to something that more closely resembles common Australian spellings.

    Regards,

  6. 2009 September 30
    Steve permalink

    12.4 “IP Beneficiary” means the entity nominated by Microsoft to the Contractor from time to time in accordance with this clause, and as at the commencement of this Agreement shall be the Commonwealth of Australia as represented by the Government 2.0 Taskforce.

    So, is a possible translation of the above: “If the idea looks like it commercial potential, then Microsoft can claim IP ownership”

    Not a bad idea by Microsoft. People enter a competition whereby entrants think that they are supplying ideas for the betterment of their community.

    But if any of the ideas have commercial potential then Microsoft, at their discretion, can own the idea.

    • 2009 September 30

      So, is a possible translation of the above: “If the idea looks like it commercial potential, then Microsoft can claim IP ownership”

      I doubt that is the intention, but it is a bit vague. I suspect it may be just to provide flexibility in relation to the work of the Taskforce, but it would be useful to understand the rationale.

  7. 2009 September 30

    Thanks for all the interest in this issue here and on other sites. Responding is a useful part of our Government 2.0 learning journey. Sorry for the ‘Contracts for Dummies’ approach but I need to start from a common base.

    • In order to pay people money, a commercial relationship needs to be established.

    • Such relationships are established by contracts.

    • Contracts are established between legal entities.

    • The Taskforce is not a legal entity (and doesn’t have any money of its own).

    • The money is coming from the fund established by Microsoft to support the Taskforce. (see background).

    • This is not ‘Public Money’. If it were, all procurement would be bound by the Commonwealth Procurement Guidelines. We would then use a government template as the starting point.

    • The manner in which Microsoft manages the funding for the purposes of these projects is covered by a deed between Microsoft and Finance. It is ready for signature and will be executed before any contracts with developers are signed. We will post the signed version later this week.

    • The draft contract does not contain anything extraordinary. We worked on it very carefully with Microsoft’s full cooperation. Microsoft continues to be amenable to negotiation within the limits of the deed and reasonable commercial arrangements.

    • We provided draft contracts to the successful tenderers for the first round of projects earlier this week. None of them have raised any objections with us. Ultimately, what they are willing to sign is an issue for them. We will work with all parties to resolve any challenges where resolution is possible.

    • Plans to crowd source an alternative contract version are interesting but, managing expectations, as this is a complex legal matter relying on the deed, etc, we might not be able to use the product(s) of such a plan. And, of course, with due deference to lawyers everywhere, a second legal opinion might be different from that of our lawyers and Microsoft’s but not necessarily preferred by us or Microsoft, nor (presumably) would it be covered by professional indemnity insurance.

    I trust this explains the situation. Thanks again for all the feedback on Twitter, etc, especially from @chieftech who first alerted me to the issue.

    • 2009 September 30

      John said:

      “Plans to crowd source an alternative contract version are interesting but, managing expectations, as this is a complex legal matter relying on the deed, etc, we might not be able to use the product(s) of such a plan. And, of course, with due deference to lawyers everywhere, a second legal opinion might be different from that of our lawyers and Microsoft’s but not necessarily preferred by us or Microsoft, nor (presumably) would it be covered by professional indemnity insurance.”

      The purpose of the wiki we are developing is to collaborate with developers, data suppliers and application users to work through the issues that are of concern when engaging in development using data licensed under an Open license and identify and explain the risks that different participants are exposed to.

      Ideally, this collaboration would then result in the development of contractual principles (or a document draft) that can be used as a resource by government departments/agencies when looking at sharing data under an open model.

      Free Open Creative Law is an initiative of legal.consult and as such has professional indemnity insurance. Whether a particular document that is prepared through the collaboration is appropriate for a particular user’s circumstances will be a matter for that user to consider and obtain appropriate legal advice upon.

      The collaboration may not result in an “agreement” document that will be used by the Taskforce, but hopefully the process can help flesh out the issues so that the different participants in open collaboration can understand why particular provisions are important.

      Hopefully the Government 2.0 Taskforce will support that endeavour.

    • 2009 September 30

      John,

      Thankyou for the follow up on the process that was undertaken in developing the contract.

      What’s more thank you for posting the Deed of Understanding, reading through that has helped to address certain concerns I had regarding the use of certain technologies (re IP rights), which are not explained in the Draft Contractual Agreement.

      One thing I would like to see cleared up however is the status of Organisations such as Open Australia (not for profit, no employees, run on the smell of an oily rag). Given the clauses referencing “Dedicated Employees” and so on, how do they stand?

      • 2009 September 30

        Hi James

        Before anyone signs a contract, they should get legal advice – which I am not purporting to provide.

        My understanding is that a ‘Dedicated Employee’ is someone who is listed in Part 1 of the Schedule – which the entity contracting to provide the project completes. So if such an organisation was chosen to provide a project, they would list the people who were to work on it in Part 1 of the Schedule (whether they were being paid or not) and these people would be the dedicated employees described in the body of the contract.

        Hope this helps.

        Regards

        John

  8. 2009 September 30
    Steve permalink

    Thanks for your post John,

    Thanks also for the quick introduction to contract law.

    But I still do not understand the logic of your argument.
    .
    It was established that the Taskforce was not a legal entity. And also that contracts needed to be established with legal entities. But this does not imply that the only remaining legal entity with which to establish contracts is Microsoft. If it did, then all people receiving money based on their support of Taskforce activities would also need to be contractually obliged to Microsoft. Even Taskforce committee members.

    Microsoft have no doubt entered into some type of legal relationship with the government in regards to this fund. Why can’t the winners of the competition enter into a relationship with the same government entity as Microsoft?

    You mention that the “fund” is not public money. The Financial Management and Accountability Act 1997 states that, inter alia, public money is money under the control of the Commonwealth.

    It seems to me that the Commonwealth’s agent (i.e. the Taskforce) in deciding who receives the money is, as a result, exercising substantial control.

    But, if I am wrong and if it is Microsoft that is exercising control of the money then it begs the question as to why Microsoft is doing so under the auspices of a government endorsed competition?

    Who is controlling the fund?

    Regards,

    • 2009 September 30

      It seems to me that the Commonwealth’s agent (i.e. the Taskforce) in deciding who receives the money is, as a result, exercising substantial control.

      The Deed John published a link to seems to be going to some pains to ensure the fund remains under the control of Microsoft, perhaps to provide greater flexibility in the way that it is expended. It may be that Microsoft is helping the fund be spent in a more flexible way than if it was confined by some of the requirements applicable to a government fund.

      It is good that this is all being discussed openly so that people can question and hopefully be informed of the reasons for the structure adopted.

      • 2009 September 30
        Steve permalink

        The Deed John published a link to seems to be going to some pains to ensure the fund remains under the control of Microsoft

        Thanks Andrew,

        I will have a look at the Deed.

        But, even if the fund is under the ‘control’ of Microsoft, should we be satisfied?

        This website certainly gives (me) the impression that the competition is being run by and for the benefit of the government and its constituents.

        If Microsoft wishes to donate money for a competition then it should do so. unambiguously. On a Microsoft website.

        Also, if the fund really is under the control of Microsoft then why does the Taskforce decide who wins the competitions and therefore receives portions of the fund?

    • 2009 September 30

      A few points:

      . With the exception of the Taskforce chair, the Taskforce members are not being paid for their efforts. Dr Gruen is reimbursed (modestly) by the Government via our Department (Finance and Deregulation). I have a small budget for Taskforce activities but it is not for competitions, prizes or projects.

      . Legally, the money in the fund is not under the control of the Commonwealth. The deed makes this very clear. The deed also makes it clear how Microsoft will respond to the Taskforce. There are no issues here.

      . I’m looking forward to seeing the results of the wiki work that Andrew Perry describes.

      • 2009 September 30
        Steve permalink

        Legally, the money in the fund is not under the control of the Commonwealth.

        Okay. Great. Therefore, Microsoft controls the fund.

        The deed also makes it clear how Microsoft will respond to the Taskforce.

        So, the Taskforce tells Microsoft what to do….

        Taskforce controls Microsoft controls Fund => Taskforce controls Fund.

        There are no issues here.

        Well, its just an opinion, but I think that Microsoft obtaining IP through a government endorsed “competition” is an issue.

        I’m looking forward to seeing the results of the wiki work that Andrew Perry describes.

        So am I. Proposition 1: “All I/P shall vest with the Commonwealth and only the Commonwealth”

      • 2009 September 30

        With the exception of the Taskforce chair, the Taskforce members are not being paid for their efforts.

        Yeah, I only realised after a tweet from @piawaugh earlier today that Taskforce members are not being paid. This is an incredible ask of them and their employers and raises a whole other discussion around appropriate remuneration of people in government office (oh, that was raised last week wasn’t it!).

        More props to the Government 2.0 Taskforce!

  9. 2009 October 1

    Great to see Simon Edwards blog post clarifying this issue.

    Now to finalise our wiki configuration and start working through the contract issues together – a perfect project for the upcoming NSW public holiday if not before!

Comments are closed.