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Fujitsu and Defence join forces again

by Aleks Vickovich •
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Given that similar procurement decisions have taken some agencies two years or more, the Department of Defence (Defence) has moved swiftly through its evaluation process to award Fujitsu a managed services contract of more than $150 million (estimated $50m pa) for ‘Core IT Services’.  The announcement came within a week of the announcement that Lockheed Martin was the successful bidder for the$60m pa End User Technology and Support (EUTS) contract with the ATO.  Fujitsu was included in the initial shortlist of five at the ATO, but failed to proceed to the final shortlist.

Fujitsu successfully re-contested the contract it had previously held despite Defence’s wording in its January 2010 Request for Tender (RFT) that the tender was for the ‘replacement’ of its contract with KAZ (now Fujitsu).  Fujitsu bought KAZ Group for $200 million in March 2008, part way through KAZ’s first contract term with Defence.

The initial term of the contract is for a period of three years, with the possibility of extensions of up to twenty years.  Fujitsu’s services will go towards supporting the ‘Distributed computing’ sub-portfolio of the Defence Strategic Reform agenda, which includes the Defence Central ICT Service Helpdesk, and maintenance of 90,000 desktops located around Australia.

In a statement issued on 15 July 2010, Parliamentary Secretary to the Minister for Defence, Dr Mike Kelly, explained that the contract is “in line with the whole of government coordinated procurement policy”.

Dr Kelly also referred to the contract as being reflective of a “new ICT partnership” despite the fact that Defence has had various contractual relationships with KAZ including a previous ‘professional services’ contract, which started in December 2005, expires in October 2010 and has value of $181.3 million over the life of the contract.

In a statement issued on Friday 16 July 2010, CEO of Fujitsu Australia and New Zealand, Rod Vawdrey, referred to Fujitsu’s “strong Defence relationship and our past successes working together on secure government ICT projects”.   

According the Mr Vawdrey, the contract “recognises the strength Fujitsu brings to delivering ICT services to Defence through tapping our global Defence business”.

“The benefits to the Department in this contract are that Defence is partnering with a ‘Tier 1’ vendor with significant experience in delivering ICT to Defence and secure government organisations globally” said Fujitsu General Manager for Defence, Ian Gray.

Re-signing with Defence is also in line with Defence’s aim to whittle down the number of suppliers it does business with.  Dr Kelly said that a small number of suppliers will be “selected as key strategic partners” and will have “increased responsibility and the opportunity to contribute directly to Defence’s business outcomes”.

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