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DIAC approaches market to renew IT outsourcing contracts estimated at $750 million

by Paris Cowan •
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The Department of Immigration and Citizenship (DIAC) has approached the market to refresh both of its IT managed services contracts at once, in deal that could exceed $750 million over its full term based on the average annual values of past contracts.

In 2005 DIAC split its monolithic outsourcing agreement with CSC into two tranches: (1) mainframe, midrange and storage services and (2) end-user computing, helpdesk and secure gateway services.

After an open approach to market CSC retained the mainframe bundle in a contract that is due to expire on 30 June 2013. Between July 2010 and June 2013 the contract will be worth $145.4 million, according to Senate Order Reporting. Intermedium estimates that the full value of the DIAC/CSC IT outsourcing relationship since 1998 is $616 million.

Unisys took over the contract for end-user computing in 2007 at a total value of $211.5 million. This contract too will expire on 30 June 2013.

As forecast in July last year, DIAC has not made any major changes to the scope of its managed services contracting since its previous market test.

It is asking suppliers to tender for one or both of two service packages. The services packages are:

  1. Mainframe Services – including all service provider personnel, equipment, software and any other resources used in providing mainframe infrastructure and services for mainframe data processing; and
  2. Selected IT Services – including single-point-of-contact ICT service desk, support and management with end-user computing, fully managed storage area network services for midrange and end-user computing servers, and the support of midrange and end-user computing server equipment.

DIAC is asking suppliers to tender for an initial five year contract term with four possible 12 month extensions.

With an average annual value of$48.5 million for the 2010-2013 mainframe contract and $35.3 million for the end-user IT services bundle total the potential value of the new contract comes to a conservative estimate of $754 million if the contract were to run for the full nine years.

The only significant change to the scope of the contracts is the exclusion of secure gateway services. Under the Federal Government’s Internet Gateway Reduction Program, DIAC is required to source gateway services under a consolidated agreement led by the Australian Customs and Border Protection Service (ACBPS). The ACBPS is the only one of the eight lead agencies under the scheme which still needs to approach the market to secure these services.

The structure of the approach to market also gives the Department the opportunity to re-integrate both service bundles with a single supplier, or to keep them split between two suppliers.

The successful supplier or suppliers will work within DIAC’s highly distributed ICT environment, which supports approximately 9,226 employees in Australia across 40 offices and detention facilities, and another 1,234 overseas. All domestic staff locations are connected using a Virtual Private Network. Offshore personnel are connected via the Secure Australian Telecommunications and Information Network (SATIN) managed by the Department of Foreign Affairs and Trade (DFAT).

The ICT environment also features a fleet of:

  • 10,500 desktop PCs
  • 1,750 laptops
  • 1,100 printers
  • 430 scanners, faxes and passport readers
  • 350 Fuji Xerox multi-function devices
  • 360 virtual Windows servers

The Department is currently undergoing a Desktop Modernisation Program which will upgrade its desktop fleet to Windows 7 from Windows XP, upgrade EUC servers to Windows 2008, and migrate email from Lotus Domino to a Microsoft Exchange based infrastructure.

Tenders close on 20 August 2012.

Tender documents show that DIAC expects to have named a shortlist of tenderers by the end of December 2012, so that contracts can be finalised by February 2013 and the transition to new arrangements can be complete when the current contracts expire on 30 June 2013.

DIAC also recently renewed its telecommunications managed services agreement with Optus for $94 million over two years.


Related Articles:

DIAC renegotiates telco outsourcing deal for $94 million

Procurement plans reveal DIAC’s outsourcing intentions

ACCC switches providers in new IT outsourcing deal

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  • Federal
  • IT Services
  • Justice
  • csc
  • Department for Immigration and Citizenship (DIAC)
  • DFAT
  • ICT Outsourcing
  • mainframe
  • Optus
  • Unisys