Defence cuts $268m IBM stealth deal

Just weeks before the Gershon review of the government's $6 billion IT spending was delivered, the Department of Defence has quietly inked a massive five-year deal with IBM worth $268 million.

Just weeks before the Gershon review of the government's $6 billion IT spending was delivered, the Department of Defence has quietly inked a massive five-year deal with IBM worth $268 million.

Details of the deal are scant but are described on the government contracts reporting system as an "enterprise licence agreement" that was procured by Defence's NSW and ACT corporate support centre.

Under the deal, inked some time in August, IBM will provide technology and services for Defence's multimedia, data and voice networks. The deal ends in June 2013. It remains unclear whether the deal is a renewal of an existing contract or a new arrangement, and how the services were previously provided.

The IBM contract appears to have forged ahead where other agencies have held back from committing to technology projects due to Gershon's impending review of IT spending, which was released today. The Department of the Environment, Water, Heritage and the Arts (DEWHA) warned vendors that details in its outsourcing tender were subject to Gershon's review.

The IBM-supplied networks may help Defence improve its information management capabilities, which its chief information officer Greg Farr earlier this year told ZDNet.com.au was the department's "biggest challenge".

"The big challenge is how we deal with information... The information's all there, now it's how do you get it in a way that's usable to actually make decisions? When you're being bombarded with thousands and thousands and thousands of bits of information per minute, how are you going to make a decision? You can't," he said.

The contract is the largest technology deal Defence has made recently. The last that Defence signed was a $240 million, five-year contract with IT services vendor Unisys, to provide infrastructure support and server and desktop support.

Defence is likely to play a critical role in federal government moves towards more centralised IT procurement. It recently approached vendors for a Microsoft software licensing deal, which will see it negotiate prices on behalf of all federal agencies.

But the IT spending review may jar with Farr's plans to speed up Defence's procurement of technology. He told ZDNet.com.au that Defence's acquisition of IT had been sluggish and uncoordinated, and often left it with "obsolete technology".

Farr's department is responsible for delivering an IT platform that supports the administrative functions of Defence, which includes its "far from perfect" Peoplesoft-based PMKeyS HR system, 120,000 work stations, and its international communications networks.

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