Health Dept rejects IBM review allegation

Summary:The Federal Department of Health and Ageing has issued a statement rejecting a report that it had kicked off an urgent review of its recent decision to retain long-term partner IBM for a key outsourcing contract without putting the work out to formal tender.

The Federal Department of Health and Ageing has issued a statement rejecting a report that it had kicked off an urgent review of its recent decision to retain long-term partner IBM for a key outsourcing contract without putting the work out to formal tender.

iTnews reported on Wednesday that the department was looking for a company to review the "processes, procedures and functions" relating to the IBM outsourcing deal, which was revealed last year just before Christmas. IBM has had a long-running relationship with the department, dating back to 1999.

However, the department yesterday slammed the report as being "absolutely incorrect".

"A probity auditor was engaged at the outset of the procurement process to advise the department on the integrity of the procurment process," it said.

"This is a new quality review to ensure that the process as set out is supported by the relevant documentation for the entirety of the process, including the transition period of three months. It is certainly not about reviewing the decision or the process used which led to the contract entered into with IBM which is signed and sealed. This is normal quality process with such a large contract."

The deal — worth some $109 million over four years — will see IBM continue to provide a range of services to the department, including mainframe, mid-range, storage, help desk and end-user computing services. In addition, Big Blue will now also provide new security compliance solutions and will conduct mainframe and storage upgrades. It will also include the roll-out of a desktop virtualisation platform to all of the Department of Health and Ageing's 4500-odd staff.

The news comes as the Federal Government continues to reform its technology purchasing program. New contract templates for deals worth less than $80,000 were recently released, for example, and peak IT strategy group the Australian Government Information Management Office is continuing to focus on issues such as the adoption of open-source software within government, as well as streamlined whole-of-government purchasing panels.

Marina Freri contributed to this article.

Topics: Government, Government : AU, IBM, Legal

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