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05 May 2011

An open door for open source - Australian Government open source software policy released

by Alexandra Wedutenko, Justin Bernau, Anna Haynes

Agencies must now actively consider both open source and proprietary software for ICT procurements.

The Australian Government Information Management Office's (AGIMO) recently revised Open Source Software Policy (Circular 2010/002) requires all Financial Management and Accountability Act 1997 agencies to consider both open source software (OSS) and proprietary software for all ICT procurements initiated after 1 March 2011.

What's prompted the change?

The Policy is a significant development since the Australian Government's initial OSS position of "informed neutrality" was published in the 2005 "Guide to Open Source Software for Australian Government Agencies". This provided agencies with information and guidance on the assessment of OSS solutions, but did not direct agencies towards specifying open source technologies as part of their procurement processes. It was produced against a backdrop of significant and increasing use of OSS by agencies, particularly in network infrastructure, security and internet applications.

The intervening years have seen a greater uptake of OSS by government agencies and advances in technology and the software market. It is in this context that the Australian Government has moved from informed neutrality to the current position: agencies must actively and fairly consider both OSS and proprietary software, and insert a statement into any request for tender that they will consider OSS equally alongside proprietary software.

Following on from the release of the Policy, AGIMO has reviewed its 2005 "Guide to Open Source Software for Australian Government Agencies", and released a revised draft Guide for comment.

What is open source software?

OSS simply refers to a category of software where access to the source code is freely, or at least readily available. Software consists of both source code (human readable programming instructions produced by software developers) and object code (machine readable instructions that enable a computer to read and carry out the programming instructions). The object code is required to install and operate the software and is provided with both OSS and proprietary software.

However, proprietary software vendors generally do not release the source code, as the source code enables users to read and modify the software. In contrast, the open source movement advocates knowledge-sharing and collaboration by making the source code available to users.

All software code is a form of intellectual property and is protected by copyright laws. However, OSS is defined by its unique licence terms, which provide rights or freedoms that proprietary software, such as commercially available off-the-shelf software, generally does not offer (for example, in relation to using, copying, modifying and re-distributing the software).

The collaborative nature of open source allows for innovation, tailoring and a more competitive market, and access to the source code alleviates the risk of vendor lock-in. Open source solutions can also be cheaper in terms of upfront licence costs, although whether this translates into value for money depends on a number of factors, including fitness for purpose and the costs of ongoing services and support.

So what does the Policy say?

The Policy provides that:

  • agencies should consider reusing existing software assets before deciding to acquire new software, or test the market for a new ICT service that incorporates software;
  • Australian Government ICT procurement processes must actively and fairly consider all types of available software. Agency procurement documentation, and decision making processes, will need to be updated to reflect the Policy. The Policy includes model clauses for agencies to use and which can be modified as required;
  • procurement documentation will require suppliers to consider all types of available software in responding to agencies' procurement requests. Suppliers will need to provide justification outlining their consideration and/or exclusion of open source software in response to the tender, and agencies will determine compliance with this requirement when assessing tenders;
  • procurement decisions must be made based on value for money and should take into account whole-of-life costs, capability, security, scalability, transferability, support and manageability requirements. Whole-of-life costs include considering initial costs such as the cost of a licence (if any) and ongoing costs for services and support;
  • agencies will actively participate in OSS communities and contribute back where appropriate; and
  • agencies seeking to opt out of the Policy must follow the opt-out process provided by AGIMO for whole-of-government ICT arrangements.

Practical implications of the revised Policy

Access to OSS is generally provided under one of a number of different licensing schemes. Importantly, agencies should conduct a licence audit regularly, to understand and facilitate compliance with the licence terms for all proprietary and open source products used in their ICT environments.

OSS that is downloaded by agencies free of charge does not generally come with warranties as to fitness for purpose or quality, or indemnities against the infringement of third party intellectual property rights. Where an agency determines that warranties or indemnities are required to mitigate material risks identified in the procurement planning stage, the agency may seek to source OSS solutions through contractual arrangements with external service providers (for example, covering all products and services provided by that organisation to the agency).


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.