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ATO fires starter's gun in AU$385m outsourcing race

In front of an audience of 170 staff from 67 IT vendors, Australian Tax Office CIO, Bill Gibson, today outlined the department's demands for its AU$385 million managed network services contract.

In front of an audience of 170 staff from 67 IT vendors, Australian Tax Office CIO, Bill Gibson, today outlined the department's demands for its AU$385 million managed network services contract.

The seven-year deal is the first of the ATO's three infrastructure outsourcing contracts for which the department is seeking expressions of interest (EOI).

The network services contract will cover voice, mobile and data carriage, desktop handsets and PABX, WAN and LAN switches, computer telephony integration, gateway security and mobile devices.

The purpose of the EOI and today's vendor briefing, according to Gibson, is to weed out candidates that cannot offer the scale of the service the ATO requires. The EOI process will serve as a prerequisite to the ATO issuing its request for tenders (RFT).

"We want to do an initial expression of interest so we can fairly deal with the market rather than cause them to feel they must all go through what for many vendors can be a AU$1 million bidding process," Gibson told ZDNet Australia.

"We're looking to make clear to the industry what our expectations are and the size and scale of what we're trying to undertake," he added.

Although the length of the contract remains to be determined, Gibson said he expects it to be between a five to seven year term. The outsourcing contract it signed with EDS in 1999 lasted six years, which was extended twice over its lifetime.

"The initial period, with a number of extensions, would be between five to seven years. It will depend on, quite frankly, the discussions we have with vendors because of the rate of technological change," he said.

The combination of rapid technological change and previous contracts which focused on technology rather than business specifications impeded change at the ATO throughout the 1990s, said Gibson.

"In the mid to late '90s, when the contract was first signed, we wouldn't have had any idea about the penetration of the Internet and what Web 2.0 was going to do for us in terms of how we improve our business operations," said Gibson.

This time the ATO will take a more liberal approach to technology specifications, and will instead focus on business requirements.

"What we have come to realise is that while [tight technology specifications] give you confidence in what you're getting, the rate of change that technology has gone through -- in terms of the desktop and network services -- has probably impeded us from extracting new ways of providing a particular solution that are now available," he added.

The ATO will issue EOIs to vendors on 29 January next year and Gibson expects a short list of three to six vendors will have been selected by the end of March.