Cloudy with a chance of Contract Management

Managing a cloud-based services contract should be well, anything but cloudy... At the latter end of July 2025, the Department of Finance hosted a Community of Practice Special Event for Commonwealth Procurement and Contract Management. I was lucky enough to attend this event - which saw speakers from the Australian National Audit Office (ANAO), Transport for NSW, the Department of Finance, and other procurement policy owners provide their valuable thoughts, input, and guidance on various topics relevant in the procurement and contract management space.

Digital transformation and migrating services to cloud-based environments are still the biggest thing in the Government IT Space, though some would argue that AI is right there as well. The common themes in the contract management space were that overall, the Government is doing a better job at managing its large-scale contracts, however the common pitfalls of poor record keeping, vague contract terms and accountability are still holding entities back from achieving better value for money.

As the Government transitions into more Cloud-based service offerings, officials must be equipped with the right tools and knowledge to ensure value for money to the Government and by extension, the Australian people.

So, what are the nimbus clouds to consider when managing a cloud services contract?

Record Keeping

With cloud platforms, most of the data is stored online, including logs, access records, and other information. While this represents a shift to the paper-based system we're used to, it doesn't remove the Commonwealth's responsibility for making sure these platforms adhere to the National Archives Act. This can be done by ensuring:

• The buyer (Commonwealth) is the owner of all data generated as part of the service
• The data will be stored in Australia
• The data will be archived and available to the owner of the data even after the contract has ceased
• Entities retain independent access to these records for compliance and auditing purposes/

Pop quiz: How long are customer identification records stored for in Australia?

A: 7 years

Ambiguous Contract Terms

All contracts, regardless of the type of services being received, must provide a clear understanding of the responsibilities and deliverables for both parties. Any ambiguity in contract terms can lead to mismanagement, poorer stakeholder relationships and a less effective end-product.

When managing Cloud contracts, it is just as important that the Service Level Agreements (SLAs) provided to the buyer are understandable and adhered to throughout the life of the contract. Remember, as a government entity, if you own a cloud product which provides a service to the Australian people, any downtime in that service has a likely chance of making its way into the media. Everyone can appreciate that some things are out of control, but from a contract management perspective, it's important to:

• Ensure SLAs are clear and favourable towards you, as a government buyer
• Ensure that during the life of the contract, those SLAs are adhered to. Often one of the SLAs will be called "Service Credits", where refunds and credits are available to the buyer for the inability to meet other SLAs
• Ensure you're familiar with all the SLAs for a given contract, and that you can hold the supplier accountable if something is to not be met (such as Availability or Uptime of the product)

Pop Quiz: What is the typical uptime expected for a cloud service being provided to the Commonwealth?

A 99.5 - 99.9%

Whilst it's important to maintain good stakeholder relationships during a contract, the SLAs are the strongest indicator for how that contract should be running. SLAs are also the greatest value for money. Sometimes, difficult conversations may need to take place, so clarity of expectations and how they are managed are crucial for any good contract manager. Hopefully this article, and others available on the Synegry Law page, give you more confidence to tackle the weather conditions that may come up ahead and help you navigate the way to clearer skies.