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Following is a question by the Hon Sin Chung-kai and a written reply by the Secretary for Commerce, Industry and Technology, Mr Joseph W P Wong, in the Legislative Council today (April 18):
Question:
In recent years, the Government has taken a more flexible approach in dealing with procurement matters relating to information technology (IT) projects, including the following two arrangements: (a) the launch of a pilot scheme for opening up intellectual property (IP) rights, under which contractors are allowed to own the IP rights of the new IT systems they have developed for the Government and to use such IP rights for commercial purposes, although the Government may retain those IP rights for reasons such as public interest, and (b) setting a ceiling on the legal liabilities to be borne by the contractors in respect of the losses indirectly caused by them. In this connection, will the Government inform this Council:
(a) of the details of the IT projects approved by the Government since the launch of the aforesaid pilot scheme, including the project names, the government departments by which the outsourcing contracts were awarded, the starting and ending dates of the tendering exercises, and whether the IP rights are/will be owned by the contractors or the Government, together with the Government's reasons for retaining such IP rights;
(b) of the details of the IT projects approved so far for which a ceiling on the possible legal liabilities to be borne by the contractors has been set, including the project names, the government departments by which the outsourcing contracts were awarded, the start and end dates of the tendering exercises, and the types of legal liabilities for which a ceiling has been set;
(c) whether it has formulated guidelines to assist various departments in assessing if there is public interest reason in individual IT projects which warrants the retention of IP rights; if it has, of the relevant guidelines and assessment criteria; and
(d) as some contractors allege that certain government departments have failed to implement the above two arrangements, whether it has adopted measures, such as issuing guidelines or generic model contracts to various departments, to ensure full implementation of those arrangements by various government departments; if it has, of the relevant measures; if not, the reasons for that?
Reply:
(a) The pilot scheme for opening up intellectual property (IP) in government IT systems for commercial exploitation was launched in March 2006. The pilot scheme is to facilitate commercial exploitation of government IT systems originally developed by contractors. Only new projects that involve creation of IP by contractors are covered by the pilot scheme. As of December 2006, there were 10 IT projects that involved creation of IP in new government IT systems. Details of the projects are attached at Annex 1.
(b) Regarding contractor's liability, the procuring departments will, in consideration of the requirements of the IT projects concerned and the potential loss to the Government which are attributable to the contractor in undertaking the contract, negotiate with the contractor on the liability to be borne by the contractor. It is noted that certain liabilities cannot be subjected to negotiation under the law. Where applicable, we encourage government departments to specify a cap on the contractor's liability in IT tenders. We note that the tenders issued by government departments in 2006 as listed out at Annex 2 have specified liability caps.
We do not have ready information on a full list of IT contracts awarded by government departments that have arrived at capping of contractor's liabilities after negotiation with contractors.
(c) Guidelines and sample contract terms and conditions (T&Cs) have been developed and issued to government departments for assisting them to implement the pilot scheme. As the nature and targets of public services provided by individual government departments may differ, the respective procuring departments will, based on their business environment, decide whether to retain the IP for reason of public interest. Such decision should be made by an officer at the level of assistant head of government department or above. We will provide advice to the procuring departments, where necessary, to assist them in making the decision. Guidelines and sample contract T&Cs are attached at Annex 3 and 4 respectively for reference.
(d) We have taken measures to ensure the implementation of the two arrangements by giving guidelines as well as sample contract provisions for reference by government departments. We have also posted the guidelines and sample contract provisions in Government's Intranet.
Ends/Wednesday, April 18, 2007
Issued at HKT 15:40
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