Audit examines budget blowouts in Feds' outsourcing

Audit examines budget blowouts in Feds' outsourcing

The Federal Government's IT outsourcing program is under intense scrutiny with the release of an audit report examining the budget blowouts and contractual performance of the first four tenders.

The Australian National Audit Office findings into the economic performance of IT outsourcing follow a long list of public blunders which has plagued the program since its announcement in the 1997 budget.

The tenders subject to the audit include Cluster 3 which covers the Department of Immigration and Multicultural Affairs (DIMA) which is a five-year contract worth more than $150 million with the Computer Sciences Corporation (CSC).

IT Opposition spokeswoman Senator Kate Lundy said IT costs at DIMA have increased since outsourcing began and CSC has failed to fulfil about 10 per cent of its service level agreements (SLA).

Lundy said CSC has been issued with more than $2 million in service credit penalties for non-performance, proof that the outsourcing program has failed.

However, CSC's vice president of integrated business services, Roger Allen defended the contract claiming it was signed in a vacuum because there were no benchmarks.

"How could we have predicted East Timor, Kosovo and the influx of illegal immigrants which impacted greatly on DIMA's IT operations," Allen said.

EDS also comes under scrutiny for not meeting SLAs in its five-year contract with the Australian Taxation Office (ATO). The Australian Customs Service was forced to process its refund-related payments manually under the GST when EDS failed to have the system ready by July 1.

The Group 5 tender, which is provided by Advantra Pty Ltd, has also been subject to an audit following reports of server crashes and loss of data in the Department of Transport and Regional Services.

Sandra Van Dijk is a Computerworld journalist.

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