GTS Update

In this Issue:

• Regulation change: social media tools now an option for government!

Regulation change: social media tools now an option for government!

Departments can now use a set of tools and products that potentially offer significant benefits for Government as a result of amended regulations that came into affect on Friday 26 February.

Government Technology Services (GTS) and Treasury staff have worked together to amend the regulations under the Public Finance Act 1989 allowing departments to grant “any guarantee or indemnity contained in the standard terms and conditions for the purchase, licence, or use by the Crown of—
(i) an Internet site:
(ii) software:
(iii) information technology tools, products, or services.”

Prior to the amended regulations, under the provisions of the Public Finance Act, only the Minister of Finance was able to give indemnities of the type usually required in the standard terms for web 2.0 tools and applications. Entering into the standard terms for web 2.0 tools and applications has therefore previously been problematic under the Public Finance Act.

This restrictive regime for the granting of guarantees and indemnities exists because they transfer risk to the Crown that is likely to otherwise sit with the supplier.

The amended regulations broaden the existing categories of guarantees or indemnities able to be granted by departments. The effect is that departments can now potentially use a set of tools and products where the giving of a guarantee or indemnity is required and where the requirements of section 65ZE of the Public Finance Act are met.

The websites, software, tools, products and services intended to be covered by the amendment are:

• social networking and collaboration sites such as Facebook, LinkedIn, Bebo, MySpace and Flickr, YouTube, Animoto and Vimeo
• analytics and data manipulation tools such as Google Analytics and Urchin, FeedBurner and Yahoo! Pipes
• hosted services such as wordpress, PBWiki, Confluence and SocialText.
• packaged software (such as Microsoft Office, Matlab), SSL digital certificates (such as VeriSign, Thawte), Server virtualisation software (such as VMWare), database software (such as Oracle, SQL Server), open source software (where the contribution agreements in particular may require an indemnity), software supporting web technologies (such as Adobe Flash Player, Sun Java), antivirus software (Sophos) and smartphone software (Blackberry, Symbian).

Websites for information sharing purposes (such as Facebook and YouTube) potentially offer opportunities for departments to better engage with the public (particularly younger people) and therefore deliver services and information in new and innovative ways.

Web 2.0 tools and products also assist in achieving the Government’s goal of providing better smarter public services for the same amount of money or less. A number of internet based services and products are free and can replace expensive conventionally procured software.

THE REQUIREMENTS

Section 65ZE(1) of the Public Finance Act 1989 requires departments to ascertain that it is “necessary or expedient in the public interest” to give the indemnity before accepting the relevant standard terms.

GTS recommends that departments have the relevant terms of use reviewed by their legal personnel before they are accepted. The risk of granting of an indemnity of the type that is now listed in the regulations needs to be weighed up in relation to the benefits of the "product".

The Public Finance Act contains a number of requirements if the contingent liability of the Crown under a guarantee or indemnity granted by a department exceeds $10,000,000.

The amended regulations do not affect Crown entities, where permitted guarantees and indemnities are specified in the Crown Entities (Financial Powers) Regulations 2005.

MORE INFORMATION

• Public Finance (Departmental Guarantees and Indemnities) Amendment Regulations 2010 [NZ Legislation website]
• Services Commission Guidelines concerning use of social media by State servants [Principles for interaction with social media - State Services Commission website] 
• Government Use of Offshore Information and Communication Technologies (ICT) Service Providers [e-government website]

CONTACTS

• Rowan Smith, Ph (04) 463 1344 Email rowan.smith@dia.govt.nz
• Anthony Hawkins, Ph (04) 463 1366 Email anthony.hawkins@dia.govt.nz