Defence's huge IT tender put on backburner

The Department of Defence has stuck with global IT service provider Unisys as it postponed a long-awaited tender process for outsourcing deals worth hundreds of millions of dollars.

It may be late 2016 before other IT providers have a chance at bidding for contracts to supply IT support to 100,000 users in the Australian Department of Defence.

Unisys has signed a two-year extension to the contract, which includes the provision of on-site server and desktop support at 460 Australian Defence Force locations. The contract is estimated to be worth around $52 million.

It was expected that bidding for the work would have occurred this year, with the Department of Defence previously discussing consolidating the contract with another one awarded to Fujitsu.

According to CRN's sister title, iTnews, the Fujitsu contract is expected to expire in June this year.

Defence had been expected to invite bids for its distributed computing package of works some time in 2014, to replace expiring contracts with a combined total in excess of $500 million.

As well as server and desktop support, Unisys also provides network security and infrastructure support under the Defence contract. Unisys was awarded the contract in 2008.

Last week, the Department of Defence announced it has decided "not to proceed with the planned market testing" of the combined contract. The Department cited the focus and "sustained effort" required for projects currently underway as the reason.

A media release by the Department states that a decision on "longer-term delivery of ICT services through a Distributed Computing Bundle will be made over the next 24 months".

While the Unisys contract has been extended until October 2016, a media release issued by Unisys notes that the Department of Defence "has the option to terminate the contract prior to the expiry of the two-year contract extension period".

It's not yet clear whether Fujitsu will also have its Defence contract extended this year.

Fujitsu won back the contract in 2010, continuing a relationship that had already spanned more than a decade and which sees roughly 450 Fujitsu staff working with the Defence Chief Information Officer Group (CIOG) at any given time. It signed a 12-month extension originally valued at $40 million (now $53 million) in early 2013.

As iTnews reports, the Department of Defence has previously outlined plans to combined existing IT contracts into three "outsourced bundles", each with a single vendor.