Govt targets $80m annual saving from ICT contracts

20/01/2017 - 15:26

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The Barnett government is hoping to slash its spending on information and communication technology (ICT) infrastructure by up to 25 per cent after signing contracts today with three international vendors.

Bill Marmion says the three suppliers will deliver services using a mix of local and national providers.

The Barnett government is hoping to slash its spending on information and communication technology (ICT) infrastructure by up to 25 per cent after signing contracts today with three international vendors.

The Australian subsidiaries of France-based Atos and Japan-based NEC along with New Zealand-based Datacom have been awarded the contracts to supply ICT infrastructure as a service to the government for the next five years.

They were chosen as preferred contractors in September last year but until today the government had not confirmed their selection.

The contracts, announced today by Innovation Minister Bill Marmion, are part of the state government’s GovNext ICT program.

“The contracts with Atos, Datacom and NEC will save an estimated $65 to $80 million annually in ICT infrastructure expenditure as the government moves to a regime where agencies only pay for what they use,” Mr Marmion said in a statement.

A government spokesman said it typically spent $316 million on these services and computer equipment per year.

A saving of $80 million would cut 25 per cent off its annual spend, with much of this expected to come from the government no longer having to invest in its own infrastructure.

Under the new arrangement, all government agencies will purchase through one contract, but with the three vendors competing to sell their ICT infrastructure services.

Mr Marmion said the three suppliers would deliver services using a mix of local and national providers, but did not provide any details.

Many people in the local ICT industry are concerned they will be squeezed out and end up with less work.

Datacom said today its bid was with a consortium that included Perth-based firm Kinetic IT, telcos Optus and Vocus, as well as PierDC and Metronode for datacentre work.

Collectively the members of its consortium have more than 1,000 people on the ground in WA, with many of these employed by Kinetic IT, which is ranked number one (by ICT staff) on the listing of WA ICT firms on the BNiQ Search Engine.

Datacom said it would establish a broad range of cloud and telecommunication services to be provided on a whole-of-government basis.

“We’re proud to have been awarded this work after going through such an intensive, competitive tender process,” chief executive Jonathan Ladd said.

“This is an innovative, forward thinking project that will transform how the Western Australian Government provides services to its citizens.”

Datacom is headquartered in New Zealand and has 4,700 people and annual revenue of $NZ1.06 billion ($A930 million).

NEC and Atos were unable to supply any details of their plans today.

NEC Australia opened in 1969 and has 11 offices in each state and territory employing 1,700 staff.

NEC’s office in Perth opened over 20 years ago and currently employs approximately 150 staff, which is set to increase.

Atos globally has 100,000 employees in 72 countries and pro forma annual revenue of €12 billion. 

Its Australian subsidiary has offices in Sydney, Melbourne and Perth, and its clients in WA include Western Power and Edith Cowan University.

Mr Marmion said other ICT services, such as application support and project management services, would continue to be delivered under the existing common use arrangements the government has in place with local suppliers.

Dimension Data, Telstra and IBM were the other short-listed tenders who missed out on the contract.

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