The Department of Agriculture has signed an agreement with Hewlett-Packard to extend the agency’s IT Managed Services arrangement to June 2017. According to a spokesperson from the Department of Agriculture, there are an additional 7 one-year extensions available beyond 2017.
The original HP contract, signed in 2009 was worth $96million and went to 30 June 2014.
Intermedium calculates this extension to be worth $69.3 million, or an average of $23.10 million for each of the three years. Agriculture had a headcount of 5,180, according to its last Annual Report, suggesting the cost per staff member of the IT managed service is around $4,500 per annum.
The decision to stick with the same managed services provider comes at a time when Agriculture is to move its biosecurity division to the new National Border Targeting Centre (NBTC) located in the Australian Customs and Border Protection Service's Strategic Border Command Headquarters in Canberra.
“The NBTC will provide a national, holistic approach to combat serious and organised crime which is responsible for smuggling illegal drugs, guns, bio-security, national security and immigrations risks through cargo and traveller arrival points”, said Immigration Minister Scott Morrison.
Once fully operational, the NBTC will employ shared systems and information to provide a nationally coordinating approach to border management, according to the Department of Immigration.
Funding for new ICT initiatives for the Department was very limited in the in the 2014-15 Budget with Intermedium identifying only two ICT initiatives.
The first, ‘A competitive agriculture sector – stronger biosecurity and quarantine arrangements’, is a $20 million program of which ICT is likely to make up approximately $1 million of the total over the forward estimates.
The second initiative, ‘National landcare programme – establishment’, is a $1 billion program to merge the Caring for our Country and Landcare programs into a single one. Intermedium believes that there are ICT costs associated with this initiative but that these cannot be quantified from the information given in the budget papers.
Many programs administered by the Department were either given reduced funding or ceased altogether in the 2014-15 Budget including:
- Agriculture Advancing Australia – International Agricultural Cooperation Programme;
- Australian Animal Welfare Strategy;
- Exotic Disease Preparedness Programme;
- Fisheries Resources Research Fund;
- Leveraging Australia’s Brand for Food;
- Live Animal Exports – Business Assistance Supply Chain and Official Development Assistance (Improved Animal Welfare Programme; and
- Rural Industries Research and Development Corporation.
By the end of 2017, Agriculture will have been part of some form of managed services arrangement for 17 years. Its early outsourcing years were characterised by the tumult of four acquisitions of its supplier in the first 8 years.
The then Department of Agriculture Fisheries and Forestry (DAFF) was the lead agency in the $130 million Group 8 ICT outsourcing contract. That Group 8 agreement encompassed mainframe, midrange, desktop, data and voice communications, and was co-signed with the Department of Environment and Water Resources, the Civil Aviation Safety Authority and the Aboriginal and Torres Strait Islander Commission, among others.
It was awarded to IPEX on 9 March 2000. Volante merged with IPEX in February 2004 and was then in turn acquired by Commander in April 2006.
In 2005, while Volante was still the supplier, the original contract was extended for a further 4 years. When Commander went into receivership in August 2008, CSG purchased Commander’s managed services business and therefore briefly supplied services to the Departments that were part of the Group 8 ICT outsourcing contract.
DAFF then broke away from the Group 8 agency arrangement to independently procure its IT managed services arrangements.
The $96 million outsourcing contract which eventuated was awarded to EDS in May 2009 following a one year procurement process. (As of September 2009, EDS began going to market as HP Enterprise Services following its acquisition by Hewlett Packard the previous year).
David Caspari, then managing director for EDS in Australia and New Zealand, told the media that EDS had been selected due to their ability to meet the geographical challenges inherent with DAFF, which included delivering services in a large location in Canberra to more remote regional sites, ‘some with only a single employee’.