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Customs dismantles $101 million telco outsourcing deal

by Pallavi Singhal •
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The Australian Customs and Border Protection Service (ACBPS) will split up its existing telecommunications outsourcing deal, worth over $101 million, and instead procure through the Federal Government’s mandatory whole-of-government panel arrangements.

Customs’ existing arrangement with Telstra for the ‘Provision of Telecommunications Services’ has been in place for 10 years, and will expire on 3 March 2013.

“The telecommunications services covered by the Telstra contracts are being progressively market tested through the whole-of-government telecommunications arrangements managed by the Department of Finance and Deregulation,” a Customs spokesperson told Intermedium.

“These market testing processes will result in new value for money contract arrangements for those telecommunication services.”

A preferred tenderer has been selected from the Telecommunications Commodities, Carriage and Associated Services (TCCAS) panel, and Customs is currently evaluating responses to its approach to the Internet Based Network Connections (IBNC) panel, said the spokesperson.

The whole-of-government panels have had an ongoing fragmentary effect on the Canberra telecommunications market since they were first established. FMA Act agencies have no option but to procure these specified services through the applicable arrangements, meaning that the mammoth outsourcing bundles of yesteryear are more often than not broken into pieces.

While this provides a new level of pricing visibility, however, it has not stopped agencies from leveraging economies of scale by continuing to procure through a single supplier.

Late last year the Department of Human Services (DHS) awarded both the IBNC and non-IBNC components of its telecommunications service requirements to Telstra for full-term contract value of $832 million.

Customs too has the ability to reselect Telstra as its single telecommunications provider, since the vendor is a member of all three Federal telecommunications panels (TCCAS, IBNC and Telecommunications Management). However, like DHS, Customs will have to separately publish the components of any deals through the relevant panels.

The Department of Agriculture, Fisheries and Forestry (DAFF) will not have the same option. DAFF is due to approach the market this month to renew its telecommunications services arrangement, expected to be worth up to $25 million. Its current $12.9 million deal with AAPT will expire in June 2013. AAPT is only on the IBNC panel.

DAFF has indicated that it is open to contracting multiple vendors, if that offers the best value for money.

In other ICT outsourcing developments, Customs has also extended its contract with IBM for the provision and maintenance of hardware by three years, now expiring in June 2016. It has a total value of $335.8 million. The deal was initially signed in 2007, prior to the establishment of mandatory hardware panels.

The direction of ICT procurement at Customs will soon come under new authority.

Former Chief Information and Knowledge Officer Joe Attanasio departed the agency in November 2012, and his role has now been restructured into a Chief Technology Officer position, with recruitment currently underway.

The agency has also announced that current acting Chief Executive Officer Michael Pezzullo has been permanently appointed to the role, with newly expanded powers to combat serious misconduct and corruption.

Related Articles:

Attanasio leaves Customs

Customs and AFP the last two agencies to approach the market for Secure Gateway Services

DAFF telecommunications deal up for grabs in February


For more information, please contact the Editor (02) 9955 9896.

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  • Federal
  • Telecommunications
  • Border Security
  • Australian Customs and Border Protection Service
  • Department of Agriculture
  • Fisheries and Forestry (DAFF)
  • IBNC
  • Joe Attanasio
  • Michael Pezzullo
  • Telecommunications Commodities
  • Carriage and Associated Services (Mobile) Panel
  • Telecommunications Management Panel
  • Telstra