IBM wins blockbuster $1B Federal Government deal

Contract structured to allow channel partners to benefit

IBM has signed a whole-of-government deal with the Federal Government’s Digital Transformation Agency (DTA) worth $1 billion.

The blockbuster five-year agreement is expected 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 the 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.

"Previously, agencies have negotiated individually with major suppliers which often resulted in different pricing structures across government,” Keenan said in a statement.

"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.”

Terms of the agreement will see the tech giant offer services including software solutions and IT support, cloud services, alongside the building and maintenance of IT systems.

The deal also spans software upgrades over the life of new and come existing contracts, applying to more than $300 million worth of existing contracts with IBM.

Keenan said the deal with IBM align with the findings of the 2017 ICT Procurement Taskforce report which recommended a coordinated process be mandated for significant IT procurement and IT vendor relationships.

The Government’s ICT Procurement Taskforce initiative, the details of which were revealed in 2016, is aimed at helping to overhaul the way the country spends its $9 billion-plus annual IT investment dollars.

One of the key initiatives stemming from the recommendations of the taskforce’s report included procurement reforms - revealed last year by then Federal Assistant Minister for Cities and Digital Transformation, Angus Taylor - which saw IT contracts capped at $100 million.

The mega agreement represents a reverse in fortunes for IBM in the Australian market, following 24 months of legal battles and revenue declines, with the company coming under over its role in the bungled 2016 eCensus portal project with the Australian Bureau of Statistics (ABS).

IBM was contracted by the ABS to develop, implement, and host the eCensus platform for the 2016 Census. In August 2016, when Australians were accessing the Census page in order to complete their online forms the website had to be shut down.

Big Blue has already been awarded a contract with the Australian Taxation Office under the new deal.