[LINK] Companies told to stop prep
Tue, 16 Jan 2001 09:18:50 +1100
This seemed a bit extreme, saying that the companies have been told to stop
their bid work, but I guess that is the practical result afterall, even
though 'on hold' is the language used to date.
Note the mention of INCREASING the charges on the EXISTING contracts. So
much for savings......
$350m deal is off, IT tenderers told
16 January 2001
MULTINATIONALS competing to win the latest federal government computer
outsourcing contract were told yesterday to abandon their bids because the
project had been scrapped.
The companies, including IBM, EDS and SMS-Sausage, had been working on
multi-million-dollar tenders for the $350 million five-agency bid since
well before the
tender details were released last September.
The huge IT outsourcing program has been put on hold after the Humphry
released on Friday, found significant problems with the Government's
The agencies involved in the bid include the departments of Treasury;
Training and Youth Affairs; and Employment, Workplace Relations and Small
Business. Finance Minister John Fahey announced on Friday that the body
of outsourcing would be disbanded and that agencies would regain control of
outsourcing their own computer needs.
The $1 billion Centrelink bid is also in doubt, but the two potential
winners of that
now-unlikely contract, CSC and Siemens, will have to wait. Key agency
decision-makers are still on holidays.
Most outsourcing companies are keeping quiet about any frustrations
with the new
arrangements for fear of upsetting their new public service buyers. But
bidding for government work said the cost of providing services in
contracts would probably go up.
Several government departments have already outsourced their IT
including the taxation office and the departments of Immigration,
Regional Services, Communications and the Arts, and Health.
"Most of the big vendors would have priced their existing outsourcing
on an expected growth of similar business," he said.
"Economies of scale would then allow for a reduced cost rate for many
without this expected growth, the cost of providing services in
contracts will probably go up."
One of the main beneficiaries of the outsourcing program so far, CSC,
outsourcing will continue apace but that it may not receive so much of
CSC vice-president of federal systems Sheryle Moon said the numbers
the total government spend on IT were unlikely to change, but the
distribution of that
Wizard Information Services managing director Tony Robey said the new
"won't suit the bigger outsourcing companies as well as the previous
centralised arrangement, but it will suit the specialist providers,
many of whom are
local Australian companies".
Australian Information Industry Association executive director Rob
Durie said breaking
up the large contracts would make them more accessible to specialist
Association members include IBM, EDS, CSC and many small Australian
companies, all of which believe that putting the process back in the
control of the
agencies is consistent with commercial practice.
Politicians, industry groups and agencies scrambled yesterday for
copies of the
Humphry report, which became available on the Department of Finance
10am after being released at 6pm on Friday.
ACT Information Industries Development Board chairman Brand Hoff said
servants and local IT companies welcomed the changes.
"The blanket decision to outsource was the problem. Many agencies had a
history of computer expertise and they didn't want to outsource," Mr