ATO unleashes AU$160m a year outsourcing deal

The Australian Tax Office has laid out the requirements for its centralised computing contract, worth AU$160 million per year.
Written by Liam Tung, Contributing Writer on

The Australian Tax Office has laid out the requirements for its centralised computing contract, worth AU$160 million per year.

Some 180 staff from around 45 vendors packed the National Convention Centre in Canberra to hear Arnold Ellem, the ATO's acting second commissioner, outline requirements for the last and largest of the ATO's three outsourcing contracts, in total worth AU$1 billion over five years.

The contract covers the ATO's mainframe, mid-range and data warehousing infrastructure, currently managed by EDS under a contract that will expire in 2010, and includes the ATO's two EDS-managed Sydney-based datacentres and its Canberra datacentre.

The department currently spends AU$83 million per year on its mainframes, AU$68 million per year on mid-range computing, and AU$8 million per year on its data warehouse.

Narelle Dotta, lead of the department's ICT sourcing strategy team told ZDNet.com.au that of the 45 companies represented today, just five are expected to lodge an expression of interest (EOI) for the work.

"The industry would know that most datacentres are run by three to four suppliers in the Australian market," said Dotta.

However, there may be some scope for those outside the top tier players — IBM, CSC, EDS, HP and Macquarie Telecom — to make a play for the ATO's work.

"It could be that organisations combine together or ones that don't have a significant Australian presence may wish to participate, but as the acting second commissioner said today, all data must be processed and stored in Australia," Dotta said.

The centralised computing contract is EDS's last opportunity to retain work with the ATO, after previously holding a contract that covered the ATO's entire outsourced infrastructure until 2010. Pending the completion of HP's intended acquisition of the Texan outsourcing giant, it could also be the first contract which it competes for under the HP banner.

EDS was absent from the shortlist of candidates for the ATO's managed network services contract — however, Dotta said the ATO did not exclude EDS from the centralised computing deal.

"You're making an assumption that they responded [to the network deal]. That assumption is incorrect," she said.

"The relationship with EDS is good. That's the consensus," she added.

The EOIs received from vendors for the end-user computing contract are currently being evaluated, according to Dotta.

"We had 10 companies respond to that [contract]. We're very pleased the number of EOIs we received are at the higher end of what we had anticipated," she said.

EOIs for the centralised computing contract will close in late July, with a shortlist expected by late August.

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