The Northern Territory's outsourcing program is almost complete, following announcements last week that IT services firms DMR Consulting and CSC have each won one of the three tenders up for grabs.
DMR Consulting has picked up the tender for maintenance of the Northern Territory Government's mainframe systems, which is worth $3.5 million for the first year, and possibly $14.7 million if the contract is renewed for five years.
CSC quickly followed this announcement with the declaration it was the successful bidder for the delivery of government desktop and LAN support - the largest of the NT contracts on offer. CSC's bid is supported by Compaq Professional Services.
According to DMR state manager John Stevenson, the Northern Territory Government had considered such a deal in 1996, but the opportunity had been withdrawn.
Stevenson said DMR had been in Darwin for 20 years and already had great relationships with local industry players.
"Millennium and Greyline form part of the service delivery component in the contract and will be providing complementary programming and maintenance support," he said. "Some of these systems are large, mission-critical systems to government operations and go back to the early 1980s."
While Stevenson said DMR, Millennium and Greyline will handle the initial stages of the mainframe support deal, he also said "there is always opportunity to bring in other local players".
"We always have an open eye to good mainframe service companies," he said.
CSC's win of the desktop and LAN support tender came after recent shortlisting to three providers, IBM GSA, Ipex and CSC. The services company estimates the contract to be worth anywhere between $30 million to $50 million in the first year and $200 million if it runs the full proposed five years.
A panel of about 20 companies has won contracts for non-mainframe projects such as Web development and IT consulting, while DMR Consulting won the lucrative mainframe systems maintenance contract.
Successful tenders for all the NT outsourcing contracts required the winning bidder to engage the State's local IT industry in the delivery of services.
DMR's winning bid was formulated in conjunction with two smaller Darwin-based consulting and integration firms, Greyline IT Consulting and Millennium Systems Consulting.
The contract covers the maintenance of the Northern Territory Government's 14 core business systems. These include the Motor Vehicle Registry system, the Power and Water authority's customer information and billing systems and the Government Housing tenancy management system.
DMR Consulting has worked on various projects with the NT Government over many years, and was involved with the original development of many of the mainframe systems it will now maintain under the outsourcing contract. "[That's] around 50 to 60 per cent of the work the company was already doing in supply-resourcing mode," said Stevenson. "But the outsourcing contract involves the taking on of more risk, a service-level agreement approach as opposed to a direct time and materials approach."
The initial contract runs for three years, with the option of a two-year extension if all parties wish to continue.
Part of DMR's agreement with the NT Government, as well as its obligation to use the services of local integrators and consultants, is to create a technical centre of excellence or "eBusiness Solutions Centre".
Stevenson said there are a number of ways in which the NT Government outsourcing scheme differs to the recent shambles created by the Federal Government's Whole Of IT Outsourcing initiative. "In this scheme, there is a high degree of involvement from the actual Government agencies effected. It's quite an interactive process between the conduit agency and the other agencies. The Government has clear objectives - it is focused on value for money and industry development and the whole model has been very structured and consistent."