DTA signs new 5-year agreement with Microsoft: Delivering value and innovation for the Australian Government

The agreement provides cost certainty through stable pricing, improved discounts and capped price increases for essential ICT products and online services used across the Australian Government.

Chris Fechner, CEO of the DTA, said the new arrangement will strengthen the Government’s ability to operate critical ICT infrastructure in the future. “We are partnering closely with agencies to deliver a smooth and coordinated transition to the new arrangement,” he said.

In addition to supporting critical ICT infrastructure, the agreement introduces a standardised contracting framework that introduces:

• Better commercial outcomes for government. Stable pricing and capped increases over the five‑year term helps minimise the APS’s exposure to global price fluctuations.
• Stronger legal protections. The arrangement includes enhanced legal provisions that improve governance, reporting, security, liability and regulations for the handling and use of government data.
• More support for emerging technologies. The arrangement accelerates the APS’s capability to adopt AI and other innovative technologies.
• The five-year agreement will commence on 1 July 2026.

The recent review of the Australian Government’s Single Seller Arrangements found they continue to deliver strong value through volume pricing; achieving $1.6 billion in discounts between 2019 and 2024. The review also reported that Single Seller Arrangements had made broader economic contributions:

• Discounts across the Single Seller Arrangements enabled the Australian Government to invest in other core services such as education, health care, and agriculture.  
• The Single Seller Arrangements were found to provide additional value for the Australian workforce, with more than 10,000 Australians employed by Single Seller Arrangement sellers.  
• The investment these sellers are making in skills development and training programs is helping to build long-term capability across the Australian workforce.

The review confirmed that the Single Seller Arrangements improved commercial terms, strengthened legal and data protections, and reduced complexity for agencies through consistent, whole‑of‑government arrangements. It found that the Australian Government negotiating as a single buyer leads to better pricing outcomes, greater efficiency in contracting, better terms and conditions and more effective risk management, particularly in a rapidly evolving technology environment.  

The Microsoft arrangement builds directly on these findings, modernising the framework to ensure agencies can continue to access critical Microsoft products and services under robust, fit‑for‑purpose terms that support both operational needs and the government’s broader digital transformation agenda.

“The recent review of our Single Seller Arrangements confirmed their value in delivering stronger protections, better terms and significant cost savings for the Australian Government,” Mr Fechner said. “Building on these strengths, the Microsoft VSA6 will deliver benefits for all agencies, particularly smaller entities, while supporting the government’s digital transformation agenda.”