Live and in effect: New Digital Seller Underperformance Policy

The Digital Seller Underperformance Policy (DSUP) is designed to improve information-sharing in whole-of-government digital procurement. In effect as of 6 July 2026, the policy establishes a structured approach for identifying and recording instances of serious underperformance by sellers on major Australian Government digital contracts.

The DSUP applies generally to large ($4 million and above) or strategically significant government contracts for digital products and services.

“At its core, the DSUP introduces a mechanism for capturing and sharing confirmed cases of seller serious underperformance across government through a central register,” outlines Simon Quarrell, Deputy Chief Executive Officer, Digital Investment Advice and Sourcing Division, DTA. “This information will be made available to agencies on a need-to-know basis when assessing sellers for future work.”

“The DSUP will enable agencies to make better-informed procurement decisions. It creates greater transparency and consistency in how seller underperformance is considered across the Australian Government.”

The DSUP aims to strengthen outcomes in government digital delivery by driving accountability and safeguarding public value. Making past performance more visible encourages earlier remediation of issues and more effective contract management across major digital projects.

“Importantly, the DSUP is not intended to operate as a blacklist or to replace existing contract management processes,” emphasises Mr Quarrell. “It complements current frameworks, maintaining agency responsibility for managing contracts.”

The policy will be periodically reviewed to ensure it remains fair, effective, and responsive to market and technology changes.

The Digital Seller Underperformance Policy is accompanied by a suite of supporting material to assist stakeholders in understanding its intent, requirements and operation.

Standard and Guidance

Our DSUP Standard establishes clear requirements under the policy; while the DSUP Guidance outlines how the policy operates in practice.

Buyers can report serious underperformance to the DTA at any stage of a contract, provided they have first attempted to resolve issues directly with the seller. Reports trigger a structured, impartial assessment process. Sellers are given a fair opportunity to respond within 15 business days to provide evidence or rebuttals, ensuring procedural fairness and transparency.

“We’ve made sure to include guidance on pathways for sellers to demonstrate improvement,” details Mr Quarrell. “Where serious underperformance has been confirmed, sellers may develop remediation plans outlining how issues will be addressed and prevented for future contracts.”

“These plans, alongside performance records, help ensure procurement decisions are balanced and focused on improving outcomes across government digital delivery.”

Where underperformance is confirmed by a designated DTA decision-maker, it is recorded on a central Confirmed Serious Underperformance Register. This register supports government buyers during procurement by providing relevant underperformance history, while maintaining confidentiality and due process.

Importantly, inclusion on the register does not exclude a seller from future contracts but informs value-for-money assessments alongside other factors. 

Overall, the DSUP is designed to strengthen accountability and support better procurement outcomes across government digital investments.

Review the Standard and Guidance at digital.gov.au.

Consultation summary 

The policy was shaped by industry consultation that took place from November 2025 to February 2026. The purpose of the consultation was to ensure the DSUP was fair, transparent, and clear, with industry stakeholders having the opportunity to help shape the final policy. Our summary collates key feedback from 19 written submissions and three roundtable discussions on the policy and its implementation. 

“Overall, the consultation has helped shape a more balanced and practical approach to the policy,” explains Mr Quarrell. “The DSUP now better supports consistent reporting and protects fairness, giving buyers clearer information to inform future procurement decisions.”

A copy of the consultation summary can be found on digital.gov.au.