IBM scores $62.9m Medicare deal

Medicare has decided to pay IBM $62.9 million for the extension of an information technology services and support contract while its parent agency, Human Services, reviews its technology strategy.

Medicare has decided to pay IBM $62.9 million for the extension of an information technology services and support contract while its parent agency, Human Services, reviews its technology strategy.

"The Human Services portfolio, of which Medicare Australia is an agency, is currently reviewing its information and communications technology strategy," a spokesperson for Medicare said. "While this is underway, Medicare Australia has put in place a one-year contract with IBM Australia for ICT infrastructure services."

The services included providing computer hardware and software, as well as mainframe and data warehouse environments, a gateway and help desk services.

"The extension of this contract is part of a broader approach towards coordinated procurement more widely across government," the spokesperson said.

Medicare said last year before the Gershon review on Federal Government IT was released that its contracts were coming to an end and it was in the process of developing its future ICT sourcing and services delivery strategy. Former Human Services Minister Joe Ludwig said he wanted to better coordinate ICT procurement within agencies in his portfolio. At that time, IBM held most of Medicare's ICT infrastructure services.

Since that report's release, the Federal Government has been trying to put together a datacentre strategy as well as desktop and telecommunications panels for whole-of-government use. Defence has led the charge to create an interim desktop panel for those who need new services before the panel is in place, but vendors for the panel were only scheduled to be assessed this month.

The new contract is not the first extension IBM has achieved since its original contract ran out, although the amounts it received for its work has reduced with each recent resigning. The extension of the IT services and support contract for the half year from October 2008 to February 2009 gave IBM $55 million. Another, announced in October last year, pledged a year's IT service and support for $70.3 million — a 36 per cent discount. This newest extension, signed in September for $62.9 million, discounts the company's work by another 10 per cent.