​IBM Australia scores AU$96m Human Services mainframe contract

Big Blue has scooped up a AU$96 million contract from the Department of Human Services.
Written by Asha Barbaschow, Contributor

IBM Australia has been awarded a contract with the Department of Human Services (DHS) as the department continues to deal with the Centrelink "robo-debt" fiasco.

The contract, valued at AU$96 million, falls under the category of communications devices and accessories, and is described by DHS as "mainframe lease and maintenance".

The contract is valid for four years and has already begun.

DHS is currently in the process of overhauling Australia's 30-year-old payment system, which processes over AU$100 billion in Centrelink payments each year.

Labelled the biggest digital transformation the government has embarked on to date by Minister for Human Services Alan Tudge, the Welfare Payment Infrastructure Transformation (WPIT) program is expected to take seven years to complete.

IBM's contract with DHS comes less than a year after the local arm of Big Blue found itself at the centre of the federal government's investigation into the Australian Census debacle.

On August 9, the Australian Bureau of Statistics (ABS) experienced a series of denial-of-service (DDoS) attacks, suffered a hardware router failure, and baulked at a false positive report of data being exfiltrated, which resulted in the Census website being shut down and citizens unable to complete their online submissions.

The ABS said in its submission to the Census Inquiry by the Senate Standing Committee on Economics that IBM failed to adequately address the risk posed to the Census systems it was under contract to provide, and that IBM should have been able to handle the DDoS attack.

"The online Census system was hosted by IBM under contract to the ABS, and the DDoS attack should not have been able to disrupt the system," the ABS said at the time. "Despite extensive planning and preparation by the ABS for the 2016 Census, this risk was not adequately addressed by IBM and the ABS will be more comprehensive in its management of risk in the future."

Days after the botched Census, Australian Treasurer Scott Morrison called out IBM, saying that if it is found responsible for the failure of the Census 2016 website, the federal government will pursue the global giant.

Since then, IBM Australia has been awarded dozens of federal government contracts across departments including Department of Defence, the Australian Taxation Office, the Department of Immigration and Border Protection, and the Department of Industry, Science and Innovation.

For the 2016 financial year, IBM Australia reported AU$16.8 million in net profit, less than half of its 2015 total of AU$53.3 million.

Revenue for the company was AU$3.2 billion -- down AU$316 million from 2015's AU$3.5 billion total -- with gross profit reported as AU$704 million for the 12 months to December 31, 2016.

The local arm paid AU$13.9 million in income tax, compared with AU$28.6 million paid a year prior.

Globally speaking, IBM reported its 20th consecutive quarter of revenue decline last month, after peaking at $106.9 billion in 2011 before dropping to $79.9 billion in 2016.

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