​Government IT procurement still favouring the big end of tech town

The Department of Human Services this week handed out AU$54.9 million to Dell EMC, IBM, and Oracle.

The Department of Human Services (DHS) awarded a handful of IT-related tenders this week, totalling approximately AU$54.9 million, with Dell EMC, IBM, and Oracle reaping the rewards.

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A spokesperson for DHS told ZDNet the four contracts are for the maintenance and support of existing equipment and services, business as usual updates, and service requirements for the department.

"They were awarded under the Commonwealth's competitive tender process," the spokesperson said.

The most expensive contract -- at AU$45 million -- was handed to Dell EMC. DHS purchased x86 converged infrastructure capacity from Dell EMC to replace end of life x86 capacity, and to provide additional x86 capacity for a "broad range of DHS initiatives".

IBM Australia walked away with two contracts, with the first seeing the department purchase of a Security Information and Event Management (SIEM) system, including associated installation and configuration services, for AU$4.7 million.

For a cost of AU$3.8 million, DHS also acquired "technical expertise in SAP DB2 technology" from IBM to assist the department with the migration of workload between technology platforms.

DHS is currently undertaking a handful of technology-driven projects, including building out an "elastic" private cloud that sits across x86 and IBM Power Systems hardware.

The department is undergoing a digital transformation in the social welfare space, and DHS head of enterprise architecture Garrett McDonald told IBM Think in Sydney last month the "elastic" cloud is just one factor being considered as the department heads into that transformation.

"Our existing systems have been with us for the better part of 30 years; it was around the mid to late 1980s that the social welfare system really started to take off in an electronic form," he explained. "While it's served us well, we recognise that the needs of government and the needs of citizens are changing, it's also time for that generational uplift."

The Welfare Payment Infrastructure Transformation (WPIT) program is a billion-dollar project to overhaul Australia's 30-year-old payment system that processes over AU$100 billion in Centrelink payments each year.

Labelled the biggest digital transformation the government has embarked on to date by former Minister for Human Services Alan Tudge, WPIT is expected to take seven years to complete.

The local arm of Oracle also walked away with a AU$1.4 million contract from DHS this month, flagged as annual maintenance and support renewal of "Oracle mid-range storage hardware and software".

The Department of Social Services (DSS) earlier this week also awarded a multimillion-dollar contract to Oracle, handing over AU$9.1 million for software maintenance and support without going to tender.

Classed as a contract extension, AusTender explains Oracle has been charged with providing "additional deliveries" intended as "replacement parts, extensions, or continuation for existing goods or services for compatibility".

When further clarification was sought by ZDNet, a DSS spokesperson simply said the department has a contractual arrangement with Oracle for the provision of hardware, software, and related services.

"This is an extension to the contract within the current terms for a period of 12 months," the spokesperson added.

The Digital Transformation Agency (DTA) is attempting to spread the AU$6.5 billion spent annually on IT by the Australian government across the smaller players by refreshing the way the government procures IT-related services.

The DTA is starting with the archaic panel process, earlier this month publishing the Digital Sourcing Framework and proposing eight principles to underpin all digital and IT government panels.

The Digital Sourcing Framework, developed by a team comprised of representatives from seven different government departments, followed consultation that the DTA began in April, which placed a focus on opening procurement up to smaller firms.

Former Assistant Minister for Cities and Digital Transformation Angus Taylor revealed in November that since August 2016, SMEs have been awarded 75 percent of AU$50 million in technology contracts published on the Digital Marketplace.

However, during a Joint Committee of Public Accounts and Audit hearing in February, it was revealed that consultancy giants EY and PwC were classed as SMEs by the Australian government as a result of multiple subsidiaries or a number of ABNs registered to the parent company.

The definition of an SME is 200 employees or less, the joint committee was told.

Taylor, who considers Australia's approach to cybersecurity "world leading", and who last year called the Australian government a "big bureaucratic beast", believes that in order for the government to make good on its promise to undergo a digital transformation, it needs to change the way it procures products and services.

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