$600m IT contract feast looms

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Ben Woodhead | July 24, 2007

THE federal Government is gearing up for an outsourcing frenzy with contracts worth $600 million per annum due to hit the market over the next two years.

Market research firm Intermedium has reported that 23 federal Government agencies and departments are due to put long-standing computer infrastructure services contracts on the market by mid 2009.

The findings were published in its Federal Government IT Infrastructure Outsourcing Report 2006-2007.

Agencies and departments with contracts that are due for renewal in the next two years include the Australian Taxation Office, Department of Health and Ageing, Medicare Australia and Department of Agriculture.

Intermedium director Judy Hurdich said that agencies whose contracts were signed in the 1990s face a number of decisions as the agreements wind down.

"The threshold question for these agencies now is whether to retain infrastructure outsourcing as a strategy or take a decision to revert to in-house arrangements," Ms Hurditch said in a statement.

"While no agencies have yet completely abandoned outsourcing, it is clear that a number of them are very undecided about what to do."

Ms Hurditch said that moves towards selective sourcing within the federal Government meant that specialist providers were much better placed to pick up a slice of the business than they were when agencies and departments first outsourced.

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