Defence drops plans to consolidate IT services contracts

The Australian Department of Defence has dropped plans mulled last year to combine two crucial IT services contracts held by Fujitsu and Unisys.

The Australian Department of Defence has halted its plans to bring together two core IT services contracts in a move that will see Unisys pick up a two-year contract extension worth AU$52 million.

In May last year , the department indicated that it was looking to combine Fujitsu's Distributed Computing Central Services (DCCS) contract with Unisys' regional IT services contract, which the companies have held since 2005 and 2008, respectively. The two contracts have been worth close to AU$500 million to both companies.

At the time, Fujitsu's contract to provide IT service desk, service, and desktop operations; network watch function, email, and groupware operations; applications; and IT service management until June this year.

Unisys' contract to provide IT support to 100,000 users across 460 locations in Australia was due to expire this year.

Defence had considered going to market at the end of 2013 for a Distributed Computing Bundle combining both contracts, but the department said today that it would shelve those plans, and instead awarded a two-year contract extension to Unisys for AU$52 million.

"As the projects currently underway require a focused and sustained effort, Defence has decided not to proceed with the planned market testing of the Distributed Computing Bundle," a spokesperson for the department said in a statement.

"Defence has exercised a contract extension under the existing Unisys Regional ICT Services Agreement for on-site support services until October 2016."

In a statement, Unisys' vice present for global managed services Asia Pacific, Scott Whyman, welcomed the contract extension.

"We are delighted to continue our relationship with the Australian Department of Defence. Unisys has a highly skilled and trusted field service workforce with the national reach to meet Defence's geographic IT support requirements across metropolitan, regional, and remote locations," Whyman said.

The Department of Defence said that a decision on the long-term future of the IT services contracts will be made over the next two years. A spokesperson for the department had not responded to questions from ZDNet at the time of writing on what impact this would have on Fujitsu's contract.