Tax to issue vendors with public report cards

Tax to issue vendors with public report cards

The days of vendors hiding behind commercial confidentiality clauses in government IT contracts appear numbered, with the Australian Taxation Office (ATO) to issue its vendors with public performance report cards.

The report cards will form the public accountability regime of a stiff new set of operating conditions for the ATO's IT suppliers which will also see vendors held financially liable for cost blowouts, bungles or scope creep - including the cost of ATO staff deployed to fix problems.

"If we have to put our own staff into it [to fix problems], they [vendors] will underwrite it," said ATO second commissioner (technology) Greg Farr.

The new public discipline regime comes as the ATO announced new contracts under its massive Change Program that aims to overhaul the agency's applications and IT architecture and is currently budgeted at $350 million.

After providing the ATO with much of its project scoping and initial design for the Change Program, Accenture has scored the lion's share of the work having been awarded a $254 million contract over four years to implement the build of the Change Program.

Other winners under the deal include Siebel Systems, which has scored a 15,000-seat deal to provide unified customer relationship and case management systems, with the first alpha site going live this April.

Other key vendors to be put under the new regime include EDS (desktop and mid-range), IBM (mainframes, heavy processing, middleware and Web architecture), Accenture (implementation) and Cap Gemini (oversight). Microsoft is also understood to be included as it currently provides Tax with its whole-of-agency desktop operating system (XP and 2000), and productivity suite (Office).

In November 2004, the ATO redefined its $180 million contract with outsourcer EDS with the inclusion of similar service level agreements that saw vendor accountability extended to outcomes across the agency.

Farr is making no apologies for the new hard line, saying it represented current best practice in risk management for both the government and the taxpayers who fund it.

Farr described the report cards as "staged gates" which vendors would have to pass before proceeding to the next stage of their project.

"We will be doing a full review of the contract...benefits, security, all of those things... and bringing in independent [people from Cap Gemini to assess vendor performance].

"We are committed to giving the report cards. We are making it as open as possible; we do not have anything to hide," Farr said.

He added that Cap Gemini had been specifically banned from pitching for any Change Program work other than performance audits.

Asked whether the ATO was out to set an IT management example to the rest of the public service, Farr said it was "not a conscious thing", adding that other departments made their own choices.

Even so, other federal government CIOs with like vendors are watching. An existing EDS and IBM customer, Customs CIO Murray Harrison recently established a market testing branch within his division as the agency approaches the expiry of its current EDS outsourcing contract in June 2007.

"At this stage we have not decided our final sourcing strategy for this exercise. We will be researching any developments in the outsourcing arena and attempting to apply best practice in our strategy. Obviously we will be watching the Tax/EDS relationship closely," Harrison said.

Computerworld is currently seeking comment from the ATO's vendors.

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