[LINK] DVA back to IBM after one-bid tender

Bernard Robertson-Dunn brd at iimetro.com.au
Fri Dec 1 12:03:00 AEDT 2006

Is anyone surprised at this news?

And I wonder what they got out of hiring ITNewcom to benchmark the IBM 
bid. What would they benchmark against?

The trouble using benchmarking to evaluate technology value for money is 
that you will never be able to be innovative. Unless someone (and 
preferably more than one) has done it before, you can't compare a 
solution with anything.

Technology benchmarking and major IT outsourcing go together like 
balance scales and jet planes - its measuring the wrong thing in the 
wrong way.

Just my opinion.


DVA back to IBM after one-bid tender
Ben Woodhead
DECEMBER 01, 2006
The Australian

THE Department of Veterans' Affairs has finalised a $128 million 
computer outsourcing contract with IBM Australia following a muted 
tender process that solicited just one bid.

The new contract will kick of from April 10 next year and replaces a 
long-standing agreement between Veterans' Affairs and IBM that has been 
in place since the mid-1990s.

IBM will provide outsourced computer and communications services to 
Veterans' Affairs for at least another four years, and the department 
holds an option to further extend the contract for two two-year periods.

The department commenced negotiations with IBM in September.

Veterans' Affairs said that the outsourcing contract contained 
provisions for IBM to update most of the department's existing IT 
infrastructure, improve its disaster recovery capabilities and install 
virtualisation technology.

The department has long been recognised as one of Australia's most 
adventurous IT users. It was one of the first local organisations to 
implement Linux on the mainframe and it was an early mover to voice over 
IP telephony.

However, the moves have not been without controversy and a senior 
Veterans' Affairs technology executive raised concerns in 2004 that the 
implementation of Linux meant the department may have tied itself too 
closely to IBM.

IBM installed the Linux operating system on the department's zSeries 
mainframes and the company was regarded as having the strongest suite of 
enterprise Linux services.

Veterans' Affairs was again in the spotlight earlier this year after 
only one company responded to a request for tender for its $128 million 
outsourcing contract.

An executive close to the tender process complained at the time that no 
other bids were tendered because rivals to IBM had to include transition 
costs in their proposals. As the incumbent, IBM did not have to factor 
transition costs into its bid giving the company an immediate cost 

The failure to solicit more than one bid forced Veterans' Affairs to 
hire technology services advisor ITNewcom to benchmark the IBM bid.



Bernard Robertson-Dunn
Sydney Australia
brd at iimetro.com.au

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