​IBM awarded AU$7m in federal contracts amid Census investigation

As the investigation into the botched August 9 Census continues, IBM Australia has scooped up more than 10 federal government contracts worth a total of almost AU$7 million.
Written by Asha Barbaschow, Contributor

Since the start of September, IBM Australia has been awarded almost AU$7 million in federal government contracts across the Department of Defence, the Australian Taxation Office (ATO), the Department of Human Services, and the Department of Industry, Science, and Innovation.

For a fee of AU$4.1 million, IBM will be providing the ATO with "Cloud Ops Support" via the Amazon Web Services (AWS) cloud, and will also be providing Defence with seven separate contract solutions, one valued at AU$1 million.

With almost AU$7 million awarded to Big Blue this month alone, the ABC reported on Monday that IBM looked "increasingly unlikely" to meet the demands of an existing project that requires the tech giant to merge the Customs and Immigration computer systems by October 31.

The Department of Immigration and Border Protection told the ABC in a statement that the schedule with IBM "remains under active review".

"This is common to all major system changes in which the protection of operational capability and security protections remains the overarching priority," the statement reportedly said.

The ABC report pointed toward the possibility of IBM picking up staff from Computer Sciences Corp (CSC) to help in meeting the impending deadline. Before the Customs and Immigration merger, CSC held the IT services contract with Immigration and IBM with Customs.

The ABC also noted that a Customs and Immigration IT failure could have serious national security implications as the IBM mainframe will manage Australia's border controls, including red-flagging terror suspects attempting to enter or leave the country.

Amid the AU$7 million signings, IBM has been 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.

Last week, 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. "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.

"You can expect the government to look so thoroughly into this to understand where the ultimate system failure occurred, and where that responsibility lay, and if there are issues that relate to the service provider in this case, you can expect us to pursue that to the nth degree," Morrison said on August 12.

"The resources were there. The capability assessments and reviews were undertaken, the assurances were provided, and the events of 48 hours ago or thereabouts occurred."

Earlier this year, the Queensland government was ordered by the Supreme Court of Brisbane to pay IBM Australia's legal fees stemming from the legal proceedings over the state's troubled health payroll system, which cost taxpayers an estimated AU$1.2 billion.

It was said in April that the cost of the case was potentially as high as AU$3 million.

The state lost its battle last year, with Justice Glenn Martin ruling in favour of IBM, declaring that "on the proper construction" of the supplemental agreement, IBM was released from the State of Queensland's claims in its lawsuit.

The state government originally settled with IBM in early 2011 over the debacle, in exchange for IBM fixing the system; however, former Premier Campbell Newman announced in December 2014 that the state was taking legal action against the tech giant.

Updated 4.15pm AEST: The amount IBM has won in federal government contracts originally read AU$7 billion, this has since been corrected to reflect AU$7 million.

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