HP out of major Defence datacentre tender

The Australian Department of Defence is one step closer to awarding an AU$500 million datacentre tender, after HP has bowed out of the race.
Written by Josh Taylor, Contributor

It is down to a race between IBM and Lockheed Martin after HP has been eliminated from tendering for a lucrative Department of Defence contract worth over AU$500 million.

As part of the department's AU$1.9 billion IT reform, it is moving to consolidate its data-processing facilities from 280 datacentres across Australia to fewer than 10 locally and three globally.

IBM, HP, and Lockheed Martin were shortlisted for the tender at the start of this year, and earlier this week, the Department of Defence proceeded to the next phase, cutting out HP from the tendering process. The change was first noted by The Australian Financial Review.

The Department of Defence and HP were not immediately available for comment.

The progression to the next phase in September puts the project slightly behind schedule. In June, Defence CIO Dr Peter Lawrence told a Budget Estimates hearing that the aim was to get from three tenderers down to two by the middle of the year, and to get down to a single tenderer by the end of 2013.

"We are aiming to be through the evaluation process by December this year, and then be able to move into the next phase, which would be contracting, in the first part of next year," he said at the time.

Lawrence said that the Department of Defence has determined the location of the eight facilities, but could not publicly disclose the location of those facilities.

The tender represents one of the largest contracts for the department, following the AU$1.1 billion Telstra terrestrial communications network contract.

That project had been delayed by the federal election held in September because it needed the approval of the parliamentary Public Works Committee. The department has been preparing a submission to the committee for November, with a view to having it signed off before the end of the year, so work can commence in 2014.

According to answers to questions on notice, if the committee does not make a decision before the end of this year, it will cost the Department of Defence AU$639,000 each month it is delayed. This is excluding the cost that Telstra would incur, and the current contract with Telstra allows for three months of delay in the decision.

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