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Vendors Need to Work Together to win Outsourcing Deals

by Staff Writers •
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According to an interview with Bill Gibson, CIO of the ATO (reported last week in ZDNet), vendors will in future be required to work more closely together in order to secure Federal Government business.

As part of the move away from whole-of-agency outsourcing towards strategic outsourcing, Gibson is reported to suggest that suppliers that may have previously been rivals will be required to work together as they will be providing complimentary services.

the issue of outsourcing within Federal Government agencies. In a detailed report in The Medium ( 23 July 2007), we identified a large number of IT infrastructure outsourcing contracts signed in the late 1990s that were due to expire in the near future, resulting in new contracts worth more than $600 million per annum coming to the market in the period to mid 2009.

Intermedium identified 23 Federal Government agencies with major IT infrastructure contracts that were due to expire, and that would need to go to the market by mid 2009. Seven of them were due to expire in 2007, seven in 2008, and nine in 2009.

At that time, Intermedium identified a discernible trend away from single supplier outsourcing towards strategic outsourcing and multiple suppliers.

The first agency to move away from single-supplier outsourcing was Customs when it signed a 5 year, $160m contract with IBM for the management of its main processing environment, the first to be signed by Customs following the break-up of the previous 5-year single supplier deal with EDS.

Since then, ATO has commenced market testing for contracts worth over $1b to multiple suppliers, ending its single-supplier arrangement with EDS that had been in place since 1999. The ATO identified three ICT infrastructure bundles for market testing, the first of which went to the market with release of a tender for Managed Network Services in January 2008.

However, not all agencies have moved away from the single supplier outsourcing model. In January 2008, DOTARS went to the market replace its existing IT outsourcing arrangement, a four year outsourcing contract with Commander that began in July 2004.

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