Dow Jones Newswires
CANBERRA -- The Australian government Friday awarded a A$500 million contract to a local unit of Electronic Data Systems Corp. (EDS) to supply information technology to the Australian Taxation Office for five years.
The contract includes options for EDS Australia Ltd. to extend the arrangements for up to four years, the government said in a statement.
The contracting out continues a trend for the government to privatize assets and contract out services it believes aren't central to the operation of government.
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EDS selected to negotiate IT contract for Australian Tax Office
11 Mar 1999 – CANBERRA, Australia
The Australian government announced Friday it selected EDS Australia to enter into contract negotiations for a major Australian Tax Office (ATO) tender which is valued between $400-$500 million (AUS) over five years.
Once contract negotiations are successfully completed, EDS will assume responsibility for the entire information technology function for the ATO, including IT infrastructure, mainframe, mid-range and desktop computers, local- and wide-area networks, telecommunications facilities (voice and data), and data warehouse services.
This decision follows the government's rigorous bidding and evaluation process, which began in 1997. EDS was selected over Computer Sciences Corp. and another Australian IT services company. According to Australian Finance Minister John Fahey, "Over a five-year term, this outsourcing contract will deliver savings in the order of $100 million (AUS). This is an excellent financial result for the Australian taxpayer."
Richard Alston, Australian Minister for Communications, IT and the Arts, said, "By entering into a long-term service relationship with EDS, the ATO will gain access to world-class IT and telecommunications expertise. EDS will bring a flexible, responsive approach to IT service delivery that will assist the ATO in the implementation of the government's tax-reform initiatives and other changes as the government moves into the 21st Century."
EDS partnered with seven Australian small-to-medium (SME) companies in the bidding process, including the local subsidiary of Lucent Technologies, Lucent JNA, and Fuji Xerox. The SMEs are joining EDS to create industry development initiatives that will contribute to the Australian economy.
As part of the contract, EDS will create the Asia Pacific Electronic Business Centre in Australia. This centre will be the hub of EDS electronic business training and development activity for the region. EDS will also use its global reach to assist SME partners market their products and services internationally. This economic development is above and beyond EDS already significant investment in Australian industry.
Tony Henshaw, Government Services Director, said EDS will draw upon its experience in Inland Revenue collection in New Zealand and the United Kingdom to deliver services to the ATO. "EDS is committed to meeting all required service levels by building on the ATO's professional and established IT infrastructure," he said. "We will provide a technical solution that supports the ATO's requirements while generating real financial savings for the Commonwealth."
The ATO announcement is the second of seven outsourcing initiatives being undertaken by the Australian government. With the announcement, John Fahey, minister for Finance and Adminstration, said, "The government is on track to save a billion dollars from its whole IT outsourcing program."
EDS will also comply with strict government requirements to ensure the privacy and security of taxpayer information.
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