Ipex ousts Telstra in transport deal

Ipex has won a $17 million Federal Department of Transport and Regional Services hardware and services contract from Telstra.

Joel Schwalb, director at Melbourne-based box-builder and services provider Ipex ITG, said a whole-of-IT outsourcing deal worth 'about $16.8 million' had been awarded to Ipex by the Department of Transport and Regional Services on the back of the service provider's success as a Group 8 government contractor.
'It's worth about $16 million for four years,' Schwalb said. 'It happened on the Group 8 [track record] we've been already running for the last three years and I think that was one reason it was given to us – we have been regarded as a very good outsourcing company in Canberra.'

Ipex holds Group 8 contracts worth about $200 million, he said, up for review in 2005 for a possible five-year extension. 'The new [Group 5] deal is total [IT] outsourcing. We supply them with PCs, servers, printers and notebooks and we run the infrastructure. That means also a help desk, which is a very important issue as the government service level agreement is for something like 99.9 percent up-time,' Schwalb said.

The Group 5 contract -- which could be extended for a further four years -- was formerly held by Telstra.

Shadow minister for IT Senator Kate Lundy, in a 17 October joint committee of public accounts and audit inquiry into the management and integrity of the Commonwealth's electronic information, said three agencies that were part of the Group 5 contract with Telstra Enterprise Services had reported a 'serious breach of IT security involving the loss of a quantity of backup tapes by Telstra Enterprise Services' in March 2003.
'What occurred was the loss of backup tapes, due to a major breakdown in TES's tape handling procedures,' Lundy said.

Lundy went on to suggest that one suitable sanction 'for such a serious breach would be loss of contract'.

A spokeswoman for the Department of Transport and Regional Services said she did not know whether the security breach was the reason Telstra had lost the contract to Ipex.

Telstra was also contacted for comment on the Ipex win but had not responded at the time of going to press.

Ipex had signed the Group 5 contract just before Christmas, the spokeswoman confirmed.

Schwalb said government business made up 62 percent of Ipex's revenue and that proportion was expected to increase from 2005 if a proposed $70 million merger with services provider Volante went as planned.

Volante's shareholders would vote on the deal 12 February. 'The merger will take a bit of a setback growth-wise, but for 2005, we will expect a large impact. If we don't grow 20 to 25 percent a year, I'll be disappointed,' Schwalb said.

Approximately equal amounts of Ipex's revenue was from software services and applications, from infrastructure services and from box-building, he said, but hardware was expected to reduce in importance as the services business grew.

Volante, whose main focus had been private company outsourcing, would likewise be complemented by Ipex' strong government business, Schwalb said