IBM keeps deep Government bond
The Federal Government has signed a reported $1 billion deal with IBM.
“As a major buyer of IBM’s products and services, the deal enables us to maximise the return on our ICT investments and ensures that taxpayers are always getting the best possible value for money,” Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation Michael Keenan said.
The deal comes alongside concerns that key agencies including Medicare are becoming captive to IBM’s legacy mainframe systems, which are running out of support.
Medicare and Centrelink have been two of IBM’s biggest Australian government clients, with deals lasting decades.
The Turnbull Government had tried move Medicare’s payments processing work to external parties, but that idea was knocked down in the last election's so-called ‘Mediscare’ campaign.
“As well as discounted prices, the new agreement contains other benefits such as access to software upgrades over the life of contract and other innovations being developed by IBM,” Mr Keenan said.
“These additional benefits will help to future proof our ICT procurement against unexpected cost increases as technology rapidly evolves.
“Services offered by IBM Australia include software solutions and IT support, cloud services, and the building and maintenance of IT systems.”
Mr Keenan says the DTA’s new contractual framework will mean the new IBM deal “harnesses the bulk-buying power of the entire government to secure the best possible prices for all departments and agencies, regardless of their size or how much they spend”.
Mr Keenan said the deal is structured “to enable small and medium-sized firms to engage with IBM through ‘channel partner’ arrangements to ensure they also benefit”.
He also responded to claims that this type of big, whole government arrangements are a means of entrenching incumbent suppliers.
“Whole of government agreements align with the findings of the 2017 ICT Procurement Taskforce report which recommended a coordinated process be mandated for significant IT procurement and IT vendor relationships,” Mr Keenan’s announcement said.
“That coordinated process allows for better oversight of contract delivery and greater accountability of how public funds are being spent.”