ATO confirms $186.5m Optus deal

The Australian Taxation Office today has confirmed Optus as its managed network services provider in a deal worth $186.5 million over four years — up to $55 million less than previously indicated by the agency.

The two have been negotiating the final contract since the ATO flagged Optus' selection in May. At the time, ATO said it typically spends around $60.5 million annually on such services; however, the deal inked will see Optus rake in around $46 million a year.

The Optus win represents the first arm to be broken off from the Tax Office's agency-wide IT outsourcing contract, which it inked with EDS in the 1990's.

The ATO's end-user computing deal, worth around $60 million a year, is due to be signed by March 2010, with CSC, HP/EDS, Fujitsu-owned Kaz Group, Lockheed Martin Australia and Unisys still in the race. The mainframe contract, worth around $160 million per year, is due be signed by mid-2010 and has been whittled down to Lockheed Martin, CSC, IBM and incumbent EDS.

Optus said it will implement a new IP network for the ATO, with up to 70 offices to be placed on its Evolve network. The telco said it hoped to move the ATO's 23,000 staff to IP-based telephony services. A timetable was not specified.

The telco will also manage the ATO's call centre, and implement a call routing system to distribute the agency's incoming calls across its national network of call centres. Optus' ATO win follows the recent contract it signed with Australia and New Zealand Banking Group, worth $500 million over five years.