Defence starts IT vendor consolidation
The Department of Defence released two request for tender documents on Friday, which are part of its strategic plan announced in November last year to have fewer suppliers who can act with more responsibility and flexibility to meet its requirements.
A swathe of Defence technology contracts are due to expire soon, including a central ICT services contract held by Fujitsu (through its Kaz acquisition) and a terrestrial communications services contract held by Telstra, which both complete this year.
Contracts coming to an end brought Defence to rethink how it received its services, with the department hoping that fewer industry players would play a greater role in providing ICT services, reducing complexity and costs. The idea would be to reduce Defence involvement in service delivery to high-level direction setting and assurance. Numerous smaller contracts would in time be consolidated under the plan, with fewer suppliers taking larger pieces of defence pie.
"Although Defence aims to consolidate certain ICT services, and therefore fewer suppliers will be selected, those chosen as key strategic partners will have increased responsibility and opportunity to contribute to Defence's business outcome," parliamentary secretary for defence support Mike Kelly said in a statement.
Defence will be looking for the provision of day-to-day operations, but also "optimisation and transformation" services, which the department considered would bring the most benefit under the new contracts.
The two tenders brought out on Friday account roughly for two of five Defence sourcing bundles into which Defence ICT services will be divided, according to a strategy it outlined last November — distributed computing and terrestrial communications. When it announced its strategy, the department had approached the industry to gauge interest in providing the distributed communications services.
It had also requested information in June last year from vendors on a contract held by Kaz (now Fujitsu) for central ICT infrastructure support services.
The distributed computing contract will cover that $200 million Kaz agreement, another Kaz contract for support to the Navy and contracts with Telstra and Excelior for certain voice and mobile support systems.
The second tender looks to replace a Defence communications network support contract with Telstra for the provision of network equipment maintenance services. It could also cover level two network operations and level three network engineering functions if the department decides those services fit better in another contract.