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Finance spends $60 million on Central Budget Management System redevelopment

by Paris Cowan •
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The Department of Finance and Deregulation has signed a second major contract for the redevelopment of the Australian Government’s Central Budget Management System (CBMS), bringing its total expenditure on the project to date to nearly $60 million.

Earlier this month the Department published a $26.4 million contract with CSC for the provision of systems integration services for the CBMS project, which will continue through to the end of 2013.

This follows the signing of a $24.4 million contract between Finance and SAP in April this year, which covers the provision of Commercial-Off-The-Shelf Software for the CBMS redevelopment out to 2016.

In a briefing on the project delivered by Finance staff in July 2010, officials explained that the Department intended to undertake three tranches of procurement for the project, for Commercial-off-the-Shelf software, for the services to implement this software and for a range of ancillary services.

This would suggest that the majority of the CBMS redevelopment procurement is now complete.

The CBMS redevelopment was originally funded in the 2010-11 Federal Budget, however Finance declined to disclose a budget figure at the time, citing the commercially sensitive nature of the information.

The Department has advised Intermedium that these circumstances have not changed.

“Finance will report on the Measure when we are in a position to do so,” said a Finance spokesperson.

However, Intermedium’scontracts database shows that just under $60 million worth of contracts related to the CBMS have been published by Finance since the project received Second Pass Approval from Cabinet in May 2010. More than $50 million of this figure comes from the two major contracts with SAP and CSC, and the remainder has covered the procurement of ICT services and some server hardware.

IT Newcom won a $1 million contract to provide ICT Benchmarking Services for the CBMS Redevelopment in May 2010 and APIS Group won another $1.6 million to provide Project Management Office Support Services in August 2010. With the exception of the core COTS and systems integration contracts, the remainder of the CBMS contracts have a value of less than $1 million each.

The CBMS redevelopment was originally set to be funded from the Australian Government’s Business-as-Usual Reinvestment Fund, which was established following the review into the use of ICT conducted by Sir Peter Gershon in 2008. The review set a savings target of $1 billion to be achieved through ICT efficiency measures, half of which would be reinvested into ICT capability.

While it was quietly announced in July 2010 that these funds would no longer be quarantined for ICT projects, in order to assist the Government in returning the budget to surplus, it does not appear that the CBMS project was affected.

According to the Finance website, “the CBMS is the system used to manage the flow of financial information between Finance and Australian Government agencies to facilitate agency cash and appropriation management, the preparation of budget documentation and financial reporting”.

It assists the Government with:

  • Recording of Government decisions;
  • Budget Estimates updates;
  • Monthly estimates profiles;
  • Appropriation and cash management; and
  • Monthly and annual reporting.

The current version of the CBMS is expected to reach the end of its useable life at the end of 2012. The transition to the redeveloped version is due to take place during the second half of the 2012 calendar year.


Related Articles:

SAP to rebuild Finance’s Central Budget Management System for $24 million

Finance to establish portfolio-wide IT panel

Labor dumps Gershon reinvestment plans

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