Procurement and contract negotiations

The Agreement for Funding of Services - Standard Terms is a header agreement used across government agencies. It can’t be amended for a specific contract with an NGO service provider.

The NSW Procurement Board is the only authorised body to make changes to the Standard Terms. However, during the procurement process, some parts of the Schedule can be negotiated.

The purpose of the Schedule is to record specific conditions relevant to a funded service being contracted, such as payments, outputs and service activity. The scope of what can and can’t be negotiated in the Schedule is defined during the procurement process, by program policies, or by Program Specifications attached to the Schedule.

The Supplementary Conditions clauses 1 to 19 can’t be negotiated. They apply to all DCJ Schedules because they reference DCJ-specific requirements and work in conjunction with clauses in the Standard Terms.

Additional Supplementary Conditions

Unique conditions about the service or conditions applicable only to a particular service contract can be inserted at clause 20 of the Schedule: Additional Supplementary Conditions. Clause 20 is only used in exceptional circumstances. This should only be used on exceptions basis.  Before you consider inserting Additional Supplementary Conditions check whether the content can fit within the body of the contract. 

The Agreement for Funding of Services doesn’t apply to all DCJ contracts or funding arrangements

The Agreement for Funding of Services isn’t used for:

• asset-based contracts or contracts with a significant asset-based component, such as housing, vehicles and ICT
• goods and services provided directly to DCJ (including consultancy services or labour hire contracts)
• social impact investment transactions, such as social benefit bonds
• leases, licenses or other similar legal documents
• prequalification contracts.

In addition, the Agreement for Funding of Services doesn’t apply to funding grants. Grants are generally paid to be of benefit to communities, and have a wider public good associated with the funding. This is different from public funding paid to an NGO to deliver a service that benefits an individual or group. The conditions attached to a grant are different in nature to the conditions required for funding of human services.

The Permanency Support Program (PSP) have received an exemption from using the Agreement for Funding of Services until existing PSP contracts expire.

History and review of the Agreement for Funding of Services

Prior to the introduction of the Agreement for Funding of Services in 2017, service providers contracted by the Department of Communities and Justice (DCJ) (previously Families and Community Services – FACS) were contracted under a Funding Deed and Program Level Agreement (PLA).

A review of the Agreement for Funding of Services was undertaken in 2019 by NSW government agencies, in consultation with peak organisations representing the human services sector. The review sought to make practical changes to the Agreement for Funding of Services - Standard Terms and to apply the lessons learned from its introduction in 2017.

Support and assistance

You can find out more about the Agreement for Funding of Services by reading:

• the Agreement for Funding of Services - Standard Terms and Schedule

For further information, email Partnerships Procurement and Contracts.