ATO takes $158M bite out of DTA’s $1B IBM deal

ATO takes $158M bite out of DTA’s $1B IBM deal

New contract brings ongoing IBM services procurement under the DTA's whole-of-government purchasing agreement

Credit: Dreamstime

The Australian Taxation Office (ATO) has taken a $158.3 million bite out of the Digital Transformation Agency’s (DTA) $1 billion whole-of-government purchasing agreement with IBM, struck in 2018.

A new contract, worth $158.3 million, awarded by the ATO for the ongoing support and maintenance of services on its existing IBM software products — which are widely used within the ATO — brings the procurement of those services under the DTA’s whole-of-government arrangements.

It replaces previous provisions made under a separate procurement panel arrangement. 

The contract, for whole-of-government perpetual licences, support and maintenance is set to extend to June 2024, and was part of a limited tender process involving the agreement struck between the DTA and IBM.

IBM signed its $1 billion whole-of-government deal with the DTA, which handles much of the federal government’s technology procurement, in mid 2018

The blockbuster five-year agreement was slated to deliver more than $100 million in savings and benefits for taxpayers, with channel partners also set to benefit from a deal structured to enable providers to engage with Big Blue throughout the process.

According to then Minister for Human Services Michael Keenan, the purchasing agreement was designed to provide the “best possible prices” for all departments and agencies, regardless of size or spend.

"As a major buyer of IBM’s products and services, the deal enables us to maximise the return on our ICT investments and ensures that taxpayers are always getting the best possible value for money,” Keenan said at the time. 

Terms of the agreement, which spans from June 2018 to June 2023, see the tech giant offer services including software solutions and IT support, cloud services, alongside the building and maintenance of IT systems.

The DTA has struck a number of whole-of-government purchasing and volume sourcing agreements, in addition to the IBM deal. 

In June last year, a deal, initially worth $39 million over three years, was struck between Amazon Web Services (AWS) and the DTA

Additionally, whole-of-government volume sourcing agreements have also been established with SAP, Microsoft and Concur.

Late last year, the DTA revealed that the cost of its common cloud commitment volume sourcing arrangement (VSA) with Microsoft was $96 million, to which Data#3 had been named as the supplier.

Under the VSA, Data#3 is the licensed solutions provider for government agencies and any agency purchases for server licensing, specific desktop applications, online services and select Microsoft products like Microsoft Azure, CRM Online and Microsoft Intune, must go through the listed solutions provider.

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