Tax office chooses Lockheed Martin for desktop services

The Australian Taxation Office has appointed Lockheed Martin as preferred supplier for desktop outsourcing services, continuing its major overhaul of sourcing arrangements.

Lockheed Martin Australia beat CSC Australia in the battle to provide end-user computing (EUC) services to the department.

The ATO and Lockheed Martin will now negotiate the terms of the contract until the end of July.

Lockheed Martin provides information technology services alongside its core business of military aircraft and other weapons of war. The company holds various IT services agreements with United States Government departments including Defence, Department of Justice, Homeland Security and NASA.

A tax office spokesperson declined to comment on the value of the contract, however it is estimated to be valued around $60 million a year.

This the second nail in the coffin of the mammoth $1 billion IT outsourcing contract with the ATO previously held by EDS.

Following a decision in 2007 to share out its sourcing arrangements, the ATO has now awarded two of three bundles of ICT services.

The ATO signed a contract with Optus in June last year for the managed network services bundle. The tax office spends around $60.5 million a year on these services.

The spokesperson said the ATO would make a decision on the award of the third and final bundle, centralised computing services, during the four quarter of 2010.

HP Enterprise Services and IBM were announced as the short-listed organisations in June.

The spokesperson confirmed the ATO was now in the contract finalisation stage of the EUC process with Lockheed Martin.

"It was determined that the solution presented by Lockheed Martin Australia, represents the best value for money outcome for the ATO," the spokesperson said.

The EUC contracts secured by Lockheed Martin include the following services:

• End-user Technology and Support, including the provision and support of desktop computers and equipment, office machines (faxes and printers) and the supporting back-end infrastructure

• Enterprise Service Management Centre, including a single point of contact service desk for IT and service management integration across the Tax Office's IT environment.

Industry was initially briefed on the EUC services bundle in April 2008.

Based on the recommendations by the Boston Consulting Group, the ATO has embarked on a significant phased procurement program following the decision to terminate sourcing arrangements with EDS.

"Existing ICT sourcing arrangements have worked relatively well in the past but are unlikely to support the future needs of the Tax Office," the spokesperson added.

ATO chief information officer Bill Gibson said the process continues to focus on a 'value for money' solution as part of an outcome-based contract.