NT govt touts ICT outsourcing maturity

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 director.

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 director.

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 happen.

"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 things."

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 Telstra.

"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 Irvine.

"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 cumbersome."

"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.