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$870 million Lockheed Martin, Defence contract sees staff redundancies

by Euan Brown •
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The $870 million Centralised Processing Services deal the Department of Defence (Defence) signed with Lockheed Martin late last year will see 128 civilian public servant (APS) redundancies among the department’s IT staff.  

Defence also said that 42 staff had already been made redundant in a response to a Question on Notice tabled by Senator Stephen Conroy during Senate Estimates in late February.

Lockheed Martin won the contract to provide Defence with centralised processing services under its ongoing Strategic Reform Program. The contract included a $150 million deal with NEC as supporting partner.

Under the eight-year contract Lockheed Martin will consolidate Defence’s data centres from 280 to 11 domestic and three international facilities as well as be responsible for integrating the management of infrastructure services across Defence’s various security domains.

NEC will provide ongoing services, ensuring the stability of the department’s systems during the data centre migration and assuming Business As Usual infrastructure responsibilities.

Centralised Processing forms one tranche of Defence’s three-tranche Strategic Reform Program, which aims to outsource the provision of ICT infrastructure in three distinct bundles and achieve $1.9 billion in ICT related savings.

Telstra is currently responsible for the delivery of the Terrestrial Communications tranche, which covers a transformation of the Department’s network infrastructure and the provision of new telecommunications capability under a $1.1 billion six-and-a-half year contract signed in 2013.

The tender for the outsourcing of the remaining Distributed Computing tranche, which covers service desk support, hardware management and updating software, was released on a restricted basis late in 2014.  Defence told Intermedium that they expect to announce the down select of the preferred tenderer in the second quarter of 2015.  

APS staff numbers for the Department are eventually projected to taper downwards towards 16,000-17,000 Full Time Equivalents (FTEs) according to the recent First Principles review released by Defence this month. Staff redundancies since 2012 have already led to approximately 3,000 fewer FTEs at the department, the number now sitting at around 19,500 in October 2014.

Defence said that all redundancies were voluntary. 

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