Human Services Agreement (HSA)
Information for service providers about the standard contract for human services in NSW. The HSA is formally called the Agreement for Funding of Services, but is commonly referred to as ‘the HSA’ for easy reference.
Introduction to the HSA
The HSA is a standard contract used when a NSW government agency procures human services from a non-government organisation (NGO).
It is designed to improve service delivery outcomes by making it easier for NGOs to do business with NSW government agencies with a streamlined and standardised contract. It also balances the need for a standardised contract with the flexibility needed for contracting in the diverse human services sector.
The HSA makes it easier for both parties to understand their obligations and expectations:
- It’s a simple and user-friendly contract.
- It reflects the partnership needed between government and the sector to deliver better human services outcomes.
- It provides a base level of consistency across all HSA contracts.
The Ministry of Health, the Department of Education and DCJ are the main government agencies that currently use the HSA.
The HSA is designed for use where DCJ contracts NGOs to deliver human services.
The HSA is not used where DCJ contracts other government agencies to deliver human services on its behalf. Instead, a Memorandum of Understanding (MOU) is used for arrangements between DCJ and other NSW State government agencies to deliver human services.
The HSA documents
The HSA is a legally binding contract. It is made up of two documents that together form the HSA contract:
1. The Agreement for Funding of Services – Standard Terms (the Standard Terms)
The Standard Terms is the overarching header agreement between government agencies and a contracted organisation (an NGO service provider). It specifies the rights and responsibilities of both parties in the agreement.
2. The Agreement for Funding of Services – Schedule (the Schedule)
The Schedule outlines specific details about the services and programs being contracted, and it specifies payments. Each government agency can have a Schedule specific to their contracts or programs.
The Schedule may also include attachments. All attachments in the Schedule are legally enforceable under the agreement. For example, a Program Specification attached to the Schedule will have more detailed requirements that both parties must also comply with.
It’s important to read both parts of the HSA together: the Standard Terms and the Schedule, along with any attachments.
Applying the HSA to DCJ contracts
Prior to 2017, service providers contracted by the Department of Families and Community Services (FACS), now DCJ, had another type of contract:
- the Funding Deed, which has been replaced with the HSA Standard Terms, and
- the Program Level Agreement (PLA), which has been replaced by the HSA Schedule.
From 2017, DCJ has been progressively using the HSA for new contracts as old contracts expire. The majority of DCJ contracts expire in June 2020, and from July 2020 new contracts will use the HSA.
The Permanency Support Program (PSP) has an exemption from the HSA until 2023 because the program went through an extensive recommissioning process at the same time the HSA was being introduced. The PSP will move to the HSA at a later stage, once existing contracts expire.
DCJ developed the Funded Contract Management Framework to assist service providers and DCJ contract managers to improve the way we manage contracts. It’s an important tool that works with the HSA.
How the HSA works
Reading the contract
Some words in the Standard Terms and Schedule are capitalised. This indicates the word is an ‘operative’ or defined term, and has a very specific meaning in the HSA. Be sure to read these terms carefully.
The Standard Terms has numbered clauses. The Schedule doesn’t have numbered clauses but refers to the clause number in the Standard Terms; for example:
Assets (clauses 1.1 and 11).
The Schedule references the Standard Terms clause numbers (1.1 and 11 in the example above) for ease of navigation.
Both documents work together and must be read together.
Order of precedence
The Standard Terms defines how all of the documents in the HSA work together (refer to clause 2.1, page 12). Precedence is important if there’s any ambiguity or inconsistency across the different parts of the contract.
Supplementary Conditions
The Schedule’s Supplementary Conditions can be used to override the Standard Terms. Clause 2.1 of the Standard Terms is used to do this.
DCJ has decided that there are circumstances where the Standard Terms don’t apply. This is explicitly stated in the Schedule’s Supplementary Conditions.
- Supplementary Condition 6 overrides Standard Terms Clause 11.2 Asset ownership
- Supplementary Condition 7 overrides Standard Terms Clause 9.8
- Supplementary Condition 9 overrides Standard Terms Clause 13(2)(b)
- Supplementary Condition 16 overrides Standard Terms Clause 15(2)(b)
Signing the contract
Organisations are issued with both the Standard Terms and Schedule for each contract they hold with DCJ.
The contract start and end dates are set out on page 2 of the Schedule.
The Execution section of the Schedule must be signed by authorised signatories of the organisation. DCJ then co-signs and dates the Schedule to indicate when the HSA comes into force.
Procurement and contract negotiation
The HSA 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 HSA 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 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 19 of the Schedule: Additional Supplementary Conditions. Clause 19 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 HSA doesn’t apply to all DCJ contracts or funding arrangements
The HSA 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 HSA 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.
2019 version of the HSA
NSW government agencies in consultation with peak organisations representing the human services sector reviewed the HSA in 2019.
The review sought to make practical changes to the Standard Terms and to apply the lessons learned from the first two years of using the HSA.
Changes to the Standard Terms
The review resulted in the following amendments to the 2017 version of the Standard Terms:
Clause 1.1 Definitions | Amended to define ‘Financially Stable’. Amended to define ‘Officer’. |
|---|---|
Clause 5.2 Compliance with laws, standards and policies | Inserted new sub clause 5.2(d) to explicitly require service providers to comply with their own constitution. |
Clause 7 Conflicts of interest | Amended clause 7.1 to require service providers to make diligent enquiries instead of a warranty. Amended clause 7.2(a) to include the option to ‘manage’ conflicts of interest. Inserted new clause 7.3 to allow agencies to notify service providers of conflicts of interest they must address. |
Clause 9.8 Additional contributions | Simplified clause 9.8(a). Removed clause 9.8(b). |
Clause 13.2 Termination without fault | Amended clause 13.2(a) to change the termination without fault notice period from 45 days to 90 days. |
Clause 25 Security | Inserted new provisions for security procedures and notifying the agency of a security breach. |
Changes to the Schedule
The changes made to the Standard Terms also required the following amendments to the Schedule:
- simplified the Additional Contributions and Additional Funds clauses to reflect the changes in clause 9.8 of the Standard Terms
- amended the Intellectual property clause to be consistent with clause 16 of the Standard Terms
- amended the Termination Without Fault clause to be consistent with clause 13 of the Standard Terms
- changed ‘Program Guidelines’ to ‘Program Specifications (Attachment 1)’.
Managing two versions of the HSA
NGO service providers contracted with DCJ on the 2017 version of the HSA can move over to the 2019 version via a Letter of Variation. This is an agreement to apply the most recent version of the HSA to existing contracts without the need to terminate them and create new contracts.
2020 review of the HSA
DCJ, along with other government agencies, will be reviewing the HSA again in late 2020.
NGO service providers and human services sector peak organisations will be consulted on the scope of the review, as well as on any changes to the HSA.
Support and assistance
You can find out more about the HSA by reading:
- the HSA Standard Terms and Schedule
- the Justice Connect, Not-for-profit Law, Guide to the Human Services Agreement
- the NSW Government procurement of human services from NGOs.
For further information, email Partnerships Procurement and Contracts