“The Coalition’s commonwealth department reshuffle has caused a nightmare for IT outsourcing contract managers, Senator Kate Lundy, Shadow Minister Assisting on Information Technology said today.
“The government’s IT outsourcing approach was bound to restrict administrative flexibility by virtue of the massive, vertically integrated clusters that form the government ‘client’ in the outsourcing arrangements.
“The administrative changes, which see some departments shrinking, others growing, and whole agencies moving from one department to another mean that the claimed economies of scale, homogenising of systems and supposed savings are completely at risk.
“The Government is facing a nightmare of contractual variations to deal with their changes after only a short period of operation for a number of the contracts. Apparently, some contracts are structured in such a way that their costs are linked to the number of desktop units. What happens if whole sections have been moved out to another department?
“The Government was warned about the dangers associated with long term, clustered contracts of this type and must come clean with taxpayers as to how much their restructuring is going to cost in terms of re-negotiating IT outsourcing contracts. The costs could easily wipe out the supposed savings.
“Of particular concern is the impact on tenders currently being prepared and considered by the Government. Group 5, which has already been short-listed, is affected with the transfer of the Employment Network to the new Department of Employment and Industrial Relations. The Minister’s office is won’t return calls as whether or not the changes will affect the tendering timetable and scope for the Group 5 contract.
“Group 5 has been promoted by the Minister for Finance, Mr John Fahey, as an opportunity for indigenous firms to participate in the IT outsourcing program. To date, the program has been structured to exclude the participation of Australian companies at principal contractor level, a feature which has contributed to both the Minister and the Government earning a reputation of neglect for industry development in the critical information technology sector.
“For example, the failure of the DEETYA tender to attract more than one bidder severely embarrassed the Government, and another debacle will demolish confidence in the Dept of Finance’s ability to manage the program. Probity and public accountability must become the priority, Senator Lundy concluded.
For more information, contact Simon Tatz 02 62300411
