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DIAC outsourcing deals revealed: winners are...slimmer

by Paris Cowan •
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The Department of Immigration and Citizenship (DIAC) has finalised the market testing of its two major ICT outsourcing arrangements, opting to stay with incumbent suppliers Unisys and CSC in each case.

While the vendors haven’t changed, the sizes of the deals have, with some annual values cut by more than 50 per cent.

The new contract with CSC for mainframe services is worth $89.3 million over five years to June 2018 – an average of approximately $17 million per annum.

DIAC’s previous mainframe and midrange outsourcing contract with CSC had been worth $39 million per annum between September 2010 and June 2013.

The new contract with Unisys, for IT services including end-user support, is worth $104 million over five years to June 2018 – an average of approximately $20 million per annum.

Unisys won the IT services contract in 2006, following DIAC’s decision to break its previously monolithic outsourcing arrangement with CSC into tranches.  The contract has been worth an average of $34 million to Unisys every year since.

A spokesperson for the Department advised that the drop in values can primarily be attributed to its decision to return midrange operations to in-house management. Under the expiring contract, they were the responsibility of CSC. Management of file and print operations, email servers and Citrix products will also become the responsibility of DIAC’s IT shop.

The spokesperson added that the Federal Government’s coordinated procurement program had also impacted upon the deals. Under the internet gateway reduction program overseen by the Department of Finance and Deregulation, DIAC will source gateway services from the Australian Customs and Border Protection Service instead of Unisys, once the lead agency has selected a supplier to provide this service.

Other mandatory buying schemes that will be having an effect on the size of Unisys’ end-user computing responsibilities include the whole-of-government desktop hardware panel and the whole-of-government Major Office Machines (MOM) panels.

DIAC has outsourced its ICT infrastructure management since 1998, when it engaged CSC as sole vendor under the Cluster 3 outsourcing arrangement. In 2005 it split the arrangement, and following an approach to market awarded midrange and mainframe services to CSC, and end-user computing services to Unisys. The Department outsources its telecommunications needs to Optus under a deal extended by two years in April 2012 at a value of $93.6 million.

The Department runs one of the larger ICT operations in Canberra, (outside of the ‘big three’- Australian Taxation Office, Department of Human Services and Department of Defence). It supports approximately 9,200 onshore users and 1,200 overseas staff.

DIAC’s midrange is the second major chunk to have been taken out of the Canberra managed services market in less than a year. In parallel with its transition into the newly integrated Department of Human Services, Medicare will move its ICT into similarly integrated in-house ICT operations. As a result it transitioned out of its partnership with IBM, effective as of the end of 2012.

View DIAC profile in GovFacts >>>

Related Articles:

Procurement plans reveal DIAC’s outsourcing intentions

DIAC renegotiates telco outsourcing deal for $94 million

Second last lead agency approaches market for Secure Internet Gateway Services

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

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  • Federal
  • IT Services
  • Human Services
  • Australian Customs and Border Protection Service
  • Australian Taxation Office (ATO)
  • csc
  • Department of Defence
  • Department of Finance and Deregulation
  • Department of Human Services (DHS)
  • Department of Immigration and Citizenship (DIAC)
  • Desktop Hardware Panel
  • IBM
  • Internet Gateway Reduction Program
  • Major Office Machines panel
  • Medicare
  • Optus
  • Unisys