The Digital Transformation Agency (DTA) has signed the sixth volume sourcing agreement with Microsoft for license access to the vendor’s enterprise and cloud stacks.
Spanning five years, VSA6 covers Microsoft Copilot artificial intelligence (AI), the Microsoft 365 productivity and collaboration suite, Azure cloud services and Dynamics 365 enterprise resource planning (ERP).
Microsoft’s security and identity services are also covered by the whole-of-government VSA6.
Branch manager for whole-of-government contracts at the DTA, Nicole Bain said the largest areas of expenditure is expected to remain with core Microsoft 365 online services, as well as Azure, based on agency use.
The running tally of contractual cost for the current fifth iteration of the VSA – in place since 2019 – has risen to over $1.2 billion, following program expansions with more government agencies joining the purchase agreement, and price increases.
This time round, the DTA is looking for what it said are better commercial outcomes for the government, with stable pricing and capped increases over the five-year term of the deal.
Asked what the price cap increase are, Bain would only say that the agreement “includes capped price increases to provide cost certainty for agencies, however, the specific details are commercially confidential.”
As for Data#3’s existing role as a reseller of Microsoft licenses to the federal government, Bain did not provide any specifics.
“Reseller arrangements under VSA6 are subject to an active procurement process, and DTA is unable to comment further until that process is complete,” Bain said.
DTA negotiated the capped price increases under a standardised contracting framework for VSA6 that the agency said brings stronger legal protections to improve governance, reporting, security, liability and regulations for handling and using government data.
The framework is also intended to support emerging technologies, such as AI.
As part of the deal, Microsoft said it will make available a $1.55 million training fund, “to develop a targeted program for the Australian Public Service to deliver tailored skills training, including for ethical AI use.”
Copilot, Microsoft’s much-touted AI, appears to be an optional buy for government agencies.
“There is no requirement to connect Copilot to any product purchase,” Bain said.
“The arrangement allows an agency to procure Copilot under the VSA should they wish to do so,” she added.
