Managing Information Under Government Contracts
September 2009
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Records of Outsourced Activities - Guidelines for Victorian Government Agencies
A standard part of modern government practice is to use contractors and external organisations to deliver a wide range of services. Outsourcing creates potential challenges to good public sector recordkeeping, which in turn can impact on probity, transparency and continuity of function.
Circumstances in which government functions may be performed outside of government may include outsourcing arrangements such as joint ventures, public private partnerships and the engaging of non-government organisations. Such arrangements may cover the performing of government functions by an external service provider under contract or functions performed by a non-government organisation where government retains some input.
Public Record Office Victoria (PROV) is the state’s archival and recordkeeping authority, created by the Public Records Act 1973. The Director of PROV, the Keeper of Public Records, has the responsibility and authority to set standards governing the creation, maintenance and disposal of public records. The Act also imposes a responsibility upon the head of any public agency to ensure that a “full and accurate record” of the business of the office is made.
Under the Public Records Act a public record is a record made or received by a public officer during the course of his or her duties, and any record made or received by a court or a person acting judicially in Victoria. Where agency activities are outsourced to external service providers, the agency’s recordkeeping obligation extends to contractors and consultants acting on the agency’s behalf. Agencies therefore have an obligation to define the recordkeeping responsibilities of service providers acting on behalf of the agency.
“Public records” are defined in the Act as any record made or received by a public officer in the course of his or her duties. In the case of outsourced activities, this may pose a particular problem, as the employees of the outsourcing partner are not themselves public officers. Thus, part of the records management process employed in outsourcing arrangements must include provision for the records to be “received” by a public officer within the relevant agency.
Under the authority of the Public Records Act 1973, PROV issues recordkeeping standards (which are mandatory for all public sector agencies), recordkeeping disposal authorities (which specify how long particular classes of records must be retained for), and recordkeeping Advices and Guidelines (which are intended to be best-practice directives but are not mandatory for compliance).
PROV issued Advice 17: Records of Outsourced Activity in 2005. This non-binding advice is the current PROV official position on the records of outsourcing activities and can be found at http://www.prov.vic.gov.au/publications/publns/
PROVRMAdvice17.pdf
A set of agency guidelines is currently in preparation, extracting the legal / technical material in Advice 17 and presenting it in a more pragmatic, project-oriented way. It is also intended to build principles regarding the management of records of outsourced activity into PROV’s mandatory standards, which are undergoing a substantial revision in 2009-2011.
Sometimes agencies may be participating in outsourcing as a direct result of specific legislation. If so, the agency should check the legislation, as it may contain specific provisions relating to records. Such provisions may specifically exclude or include certain categories of records as part of the exercise. These provisions must be considered when developing the contract or agreement.
Agencies participating in outsourcing should examine the terms and definitions in a contract closely. Records may not be mentioned specifically, but be intended by those drafting the contract to be included within the scope of the term ’assets’. Without precise clarification of what constitutes assets, the opportunity could arise for ambiguity in the treatment of records.
In the absence of consideration of records as ‘assets’, the agency should be advised to ensure that the contract specifically clarifies the rights and responsibilities of all parties with respect to records.
The contract should be clear with regard to the ownership of both the records and intellectual rights to the contents of the records created during the contract. It should be clear which party has further developmental rights in any intellectual property generated during the course of the contract. Intellectual property rights and copyright must be secured if the agency intends to re-use and develop the intellectual property contained within the records.
For example, it is imperative that the agency be able to provide specific information about previous work to potential new suppliers. Shared intellectual property arrangements should also be considered.
Building recordkeeping considerations into the outsourcing model
Records, and their management, should be part of the core discussion in any outsourcing arrangement in several areas.
1. Planning:
Outsourcing activities should include provisions for making, maintaining and disposing of records to limit government/agency exposure to risk. Any applicable principles outlined in any recordkeeping documentation and requirements specific to the agency’s jurisdiction must be considered. PROV requirements should be consulted.
2. Ownership:
Ownership of records that result from an activity performed by an external service provider must addressed and resolved through legislation or contract/agreement. The agreement should be specific about which records will belong to which party, at what stage and in what manner they must be transferred from one to the other, and that no permanent public record (as defined in the relevant PROV disposal authority) is transferred to the outsourcing partner.
It is important to note that an agency’s legal ownership of outsourced activity records does not mean the records are public records. In order for records to be public records they must be in the custody of an agency and the agency must also secure the beneficial ownership of the outsourced activity records via contractual agreement.
3. Control:
The agreement must include requirements that third party entities comply with the records management controls determined by the controlling agency.
4. Disposal:
Records that provide evidence of government functions and activities held by external service providers must be disposed of in accordance with relevant archival legislation, or other instrument.
5. Access:
The agreement must include provisions ensuring that the same level of access (or limitation on access as applicable) is provided, regardless of which party holds the records.
6. Storage:
Outsourcing partners must store records appropriately and in
accordance with the relevant PROV standard on storage. This includes the provision of appropriate environmental and hazard controls, monitoring of record conditions, the use of security to control physical access to the records as needed, and documentation of all records is available for inspection.
7. Contract Completion:
Any outstanding recordkeeping issues (or records) should be specifically addressed upon completion of the contract of service.
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For Further Information
For further information or legal advice on any issues raised in this paper contact:
Isabel Parsons on 8684 0405
Special Counsel
The VGSO is the primary source of legal services to the Victorian State Government and its statutory authorities, providing strategic advice and practical legal solutions.
