Apart from the broad provisions of the FMA Act regarding the ‘proper use’ of Commonwealth resources (see Chapter 2), obtaining ‘value for money’ is the primary guidance provided to Government agencies of relevance to consulting services.
Contract fees may be affected by the extent of liability accepted by, or imposed on, the contractor. In general, liability should generally rest with the party best placed to minimise the occurrence of an identified risk, and any limitation of a contractor’s liability should be based on comprehensive risk management.
When people ask me whether the [Defence Materiel Organisation] is going to revert to using fixed price contracts, or increase the use of innovative contracting techniques like pain-share, gain-share, my answer is ‘it depends’. To be more business like is to be more willing to adapt one’s approach to the market, the risks, and the circumstances.
Steve Gumley, Reforming Australia’s Defence Acquisitions, 3 March 2005