Billion-dollar boost for Australian IT industry

An 80,000 PC network outsourcing project by the Australian Department of Defence is gathering momentum with an invitation to register interest opening this week.

The initial invitation, open from January 22 to February 14, involves the department’s central office operations (Corporate Services and Infrastructure Group), one portion of the total project, which is expected to inject hundreds of millions of dollars into the local IT, industry.

Some speculation puts the figure involved closer to A$1 billion with the inclusion of servers, printers, desktops and applications, under the standard three-year Defence contract which includes options on a further two years. It also harbours additional complexities: the infrastructure is spread across army and air force bases and navy ships, and across state and national sites.

Defence would not divulge further details about the invitation prior to its release, however, companies must register their interest to be eligible to bid for the tender when it comes up in July. The contract for these services is expected to be issued early in 2004.

Further contracts covering regionally provided services are tabled for release in the coming months. The Defence Information Environment Committee has sectioned the department’s network infrastructure into 12 regions. Overall, Defence’s IT infrastructure is divided into two networks-the Restricted network used for business and the Secret network used by command control.

All the major government outsourcers are expected to bid for the deal including IBM Corp., Electronic Data Services Corp., Computer Sciences Corp., and Telstra Enterprise Services (TES).

Service companies with a foot in the door, such as KAZ Group, which has connections with the navy through its applications, arm Aspect, may also pick up tenders. However, it is likely that smaller local companies will assume the role of sub-contractors. The department’s in-house IT teams are also eligible to bid for the contracts.

The RFRI is a market-testing exercise, according to Defence spokesperson Anna Marsden, and does not make the full-blown project a foregone conclusion.

Defence has been examining the pros and cons involved in outsourcing its PC network for almost two years. It was finally given the green light on market-testing by the Defence Information Environment Committee last year.

However, a change in the management of Defence’s IT infrastructure seems almost inevitable. In a statement to CIO magazine this year, Director-General of Defence Information Environment, Brigadier Michael Clifford, said Australia’s intervention in East Timor demonstrated the inability of its current IT set-up to provide a “top-down” view of the Defence Force to its outmost fringes.

East Timor was the first time the Australian Defence Force commanded an operation rather than working as a junior partner in a coalition. This had challenged Defence’s traditional thinking on IT. “What Timor really brought on is the realization that we had to take a broad top-down view of information,” Clifford said. Not just in the sense of hardware and software but in the way information is moved around.