Defence Terrestrial Comms to be worth more than $1 billion

Defence Chief Technology Officer Matt Yannopoulos has revealed that his Department’s much anticipated Terrestrial Communications contract will be worth in excess of $1 billion to the successful supplier.

At this stage both Telstra and Optus are in the running to win the deal, with a decision due in September.

“Both tenderers put in their best and final offers and their updated tender documentation about six weeks ago. Our teams are scoring those right now with a view to making a recommendation up to the executive.

“That down select decision will allow us to go to cabinet and seek second pass approval,” Yannopoulos told delegates at the Technology in Government Summit in Canberra on Tuesday 14 August.

The contract will cover end-to-end managed services for the Defence telecommunications network, including “wall-plug to wall-plug, mobile phones, unified communications and so on” he said. It will also introduce wireless internet to many Defence bases and sites.

The roll-out of the new communications service is due to begin from early next year.

Telstra and Optus were selected from a shortlist that also included Dimension Data and Fujitsu.

Defence is the last of the ‘big three’ Federal Departments – the Department of Human Services (DHS); the Department of Defence; and the Australian Taxation Office (ATO) – to finalise a deal to outsource their telecommunications. Optus was awarded the contract at the ATO, at a value of $217 million over four years. Telstra has recently been announced as the winner of the DHS contract, worth up to $833 million over its full allowable term of 8.5 years, including the Internet Based Network Connections component which will be procured by the Department of Finance and Deregulation on their behalf.

Defence’s contracting history to date has tended to favour Telstra, according to Intermedium’s Analyse IT tool.

In the past five full financial years (2007-08 to 2011-12) Optus has signed $80.4 million worth of contracts with the Department of Defence.

Telstra, on the other hand, has signed $400.6 million worth of contracts with the Department over the same term, including a pair of carriage deals with a combined value of $169 million which commenced in July 2008 and will continue through to May 2014.

Yannopoulos also told delegates that the Department was now half way through its migration to a new Sydney data centre run by Global Switch.

He also said that it would be seeking second pass approval for its Next Generation Desktop initiative in the coming months. Thales was engaged to deliver the pilot stage of the project in November 2011, at a value of $6.2 million.

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