The Northern Territory has never re-awarded
a contract for the supply of critical IT solutions and services for
all its departments and agencies to an incumbent supplier.
But before vendors start wringing their hands over what seems
to be an unfair policy, they should listen to the views of Brad
Irvine, the territory government's ICT tenders office project
Irvine -- speaking after the government
dumped incumbent supplier CSC Australia and awarded a
four-year, AU$150 million desktop and helpdesk services contract
to rival Fujitsu -- reckons the situation is more a reflection of
the growing maturity and understanding of outsourcing
relationships from both the customer and vendor sides.
The situation has changed, Irvine told ZDNet Australia
in a phone interview last week, from the "rough and ready" times
of the late 1990s -- days when many customers were less confident
about changing suppliers due to uncertainty about what might
"At this particular point in time, we have not returned the
incumbent, ever," Irvine said. "It's an interesting record, I'm
not sure whether it's something we should be proud of or not. But
that's just simply the facts of the matter."
"It's a maturing of the understanding of these outsourced
relationships from both sides," he said. "The industry has grown
up, they've come to understand how these things work better," he
said. "I think the early days in the late 90's were a bit rough
and ready, a bit agricultural, as far as doing these things".
"People were breaking new ground, and I think that over time
people have got more in tune with what's important with these
Irvine's comments echo those of vendor Unisys' new managing
director Steve Parker, who said in an interview with ZDNet
Australia in mid-February that customers had lost their fear
of switching suppliers.
CSC "will behave"
Irvine said incumbent CSC would behave itself while cleaning
house for Fujitsu's entrance on 29 June.
"CSC are behaving extremely well, they're going to play
nicely," he said. "At the end of the day they have a brand to
protect. And they don't want to be known in the industry as not
doing everything they can."
"They're going to meet all the contractual obligations, I have
no concerns in that area whatsoever."
Beyond the desktop
The desktop contract awarded last week is the territory's largest
whole of government deal, with the next biggest being a
telecommunications contract awarded last year to
"We have three other areas that we select-source. One is our
messaging service, it's a dedicated service provider for whole of
government ... it also incorporates collaboration services," said
"So that's the third, and then we've got a contract for
mainframe applications, and a panel contract for consultancies
and other non-mainframe ICT applications, as in applications
maintenance, enhancement, development."
The mainframe contract is worth less than AU$2 million, with
suppliers on the panel contract winning piecemeal work.
"We're currently reviewing those last two, because they expire
31 October this year," said Irvine. "We're reviewing that to see
if that's still appropriate."
"We've had the ICT panel contract now for five years, and
we're assessing whether that still adds value, because there are
some problems with panel contracts."
Irvine said the territory government had received complaints
from new suppliers who had difficulty breaking the stranglehold
of existing members of the panel.
"We have a process where we review applications every 12
months, and to be equitable with those that did the tender
responses in the first place, the only thing that people can do
is actually submit a tender again," he said. "People see that as
"I think that this is probably the biggest problem with the
panel contract in that it doesn't promote people to get started
in the territory," he added.
But ultimately the project director believes there are
sufficient players in the market to provide a good level of
competition for large contracts.
"Absolutely, we had four very good bids," he said of the
AU$150 million desktop contract.