Commander's Group 8 contract with DAFF goes on the block

Commander's (ASX:CDR) IT managed services contract with the Department of Agriculture, Fisheries and Forestry (DAFF) is up for grabs. The tender signals the department's decision to break away from the Group 8 arrangement, which it has been a part of since 2000.

DAFF's new request for tender covers the provision of managed desktop, desktop LAN, midrange, storage area networks, helpdesk services, Macs and project services throughout DAFF's Australian offices. Submissions close on August 29, with the new contract due to commence in June next year. The contract is for five years with possible annual extensions for a further 10 years.

The DAFF tender is the first spun out of the Group 8 outsourcing arrangement and is expected to be hotly contested.

The Group 8 contract was won by Australian PC assembler, Ipex, in 1999 and kicked off in 2000. The initial Group 8 contract was valued at about $130 million over five years and covered 7500 desktops across seven government agencies. Ipex was subsequently acquired by Volante Group in 2004.

The Group 8 arrangement was renewed in 2004 with Volante for another four years. At that time, Volante valued the combined contract at $40 million per year. Volante was acquired by Commander in a hostile takeover in April 2006 and is now a business unit within the embattled ASX-listed integrator.

Federal Government agencies accessing IT services under the Group 8 arrangement are the DAFF, the Department of Environment and Heritage, the Australian Broadcasting Authority, the Australian Communications Authority, the Australian Public Service Commission and the Civil Aviation Safety Authority.