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ATO reveals IT Application Services Panel

by Paris Cowan •
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The Australian Taxation Office (ATO) has revealed the list of suppliers on its IT Application Services Panel.

Five IT companies with strong track records at the ATO have been named as panellists for one of the highest-value ICT procurers in the Federal Government.  The five are:

  1. Accenture
  2. Capgemini
  3. CSC
  4. HP Enterprise Services
  5. IBM

A spokesperson for the ATO has confirmed that this represents the final list of panellists.

“Contract negotiations are finalised and no more names will be added at this stage,” she said.

The IT Applications Services Panel will augment the capability of the Enterprise Solutions Technology unit, the division of the ATO in charge of the agency’s extensive ICT business applications.

“This extra capability will supplement the Enterprise Solutions and Technology (EST) sub-plan within the ATO. The panel will be capable of providing a comprehensive range of IT Services dedicated to applications development and support activities that cover the whole of the ATO’s Standard Operating Environment (SOE),” said the spokesperson.

The EST employs 2,115 staff across 26 locations and operates with an annual budget of $627.3 million.  The panel arrangement will see applications services delivered to the EST for three years to July 2014, with two options for one year extensions available to the ATO.

Owing to the size of its client (taxpayer) base and the ICT intensive nature of its business transactions, the ATO has a big appetite for applications services.

According to Intermedium’s Analyse IT tool, in 2009-10 the ATO spent $56 million on Systems Integration Services of the sort that will be covered by the panel. Reflecting the cyclical nature of big IT refresh programs in the Federal Government, this total dropped to $16 million in 2010-11, upon completion of the Change Program, for which panellist Accenture received somewhere in the vicinity of  $614 million over the 7 year life of the Program.

The selection process for the panel commenced in October last year.

The Request For Tender (RFT) sought providers “capable of providing Services across a range of application development service categories including project management, analysis, design, development, testing, information design, operations and release management”.

At the time, the panel’s Program Manager Tania Walsh pitched the idea of a performance framework to interested readers over the Australian Government Information Management Office’s (AGIMO) Blog.

The framework, which the ATO has confirmed will be implemented as part of the panel arrangements, provides panellists with a score out of five based on the quality of the services delivered.

According to Walsh, panellists receiving an overall score below three could find themselves removed from the arrangement altogether. Panellists scoring above this benchmark would become eligible for performance payments and increased in personnel rates, thus creating an incentive-based system for continuous service delivery improvement.

The eServices Panel run by the Victorian Government uses a similar ratings system, which is reportedly popular amongst both suppliers and agencies.

Such a system has also be slated for inclusion in the whole-of-government IT Services Panel (WISP) proposed by AGIMO.

Within the IT Services procurement landscape envisaged in the WISP plan, the larger and more specialised Federal agencies, specifically the ATO, the Department of Defence and the Department of Human Services, would each establish their own IT Services panel, with the remainder to be serviced through the WISP.

Its inclusion on the panel continues a highly successful start to the new financial year for Accenture. As Intermedium reported last week, the company has already won two major government contracts with a combined total of nearly $90 million, this financial year.

The inclusion of HP Enterprise Services (previously EDS) on the panel must reflect a strong vote of confidence in their current performance. The company is currently the infrastructure management outsourcer covering the Centralised Computing environment at the ATO. HP Enterprise Services (including the years trading as EDS) has had a total contract value of nearly $4 billion with the ATO since the commencement of the outsourcing arrangements in 1999.

IBM has a major installed hardware and software base in the ATO, with a total value of contracts over the last two financial years of $65 million, including a $48 million contract for IBM software licences as associated services. 

CapGemini was the ATO’s Change Program assurer and in that role has won $3 million worth of business from the ATO since 1 July 2009. It has won $29 million worth of ICT contracts across the Federal Government in the same period.

While four of the five panellists have had previous track record with the ATO on which to rely, CSC has had no such background, but was one of the final three shortlisted for the ATO’s End-user Computing contract

Missing from this ‘tier one’ league of suppliers are Fujitsu and Unisys, neither of which, according to Intermedium’sdata, have had much to do with the ATO in the last five years.  Lockheed Martin, now one of the ATO’s key outsourcers, is also missing from the list, potentially as it does not have any major Systems Integration track record in the non-Defence sector as yet. 


Related Articles:

Accenture continues winning streak with $40 million Defence contract

ATO & AGIMO team up for online panel consultation

ATO signs $783m HP contract, opts out of AGIMO’s data centre panel

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