ATO hands Macquarie Telecom $20m internet gateway deal

Macquarie Telecom has secured a $20 million deal with the Australian Taxation Office to provide secure internet gateway (SIG) and cyber security services for at least the next three years.

In an announcement to the ASX on Monday, the telco said it had entered into an agreement with the agency to protect its IT environment from external security threats.

“The secure internet gateway is a critical service to securely manage the connection between the ATO’s IT environments and the internet, protecting the ATO’s IT environments from security threats,” Macquarie Telecom said.

The contract comes almost a year after the agency went looking for a new SIG provider to replace its Secure ATO Gateway Environment (SAGE) to support its “current and future business transaction needs”.

SAGE currently supports some 25,000 ATO staff, close to 6 million myGov accounts linked to ATO Online and an average of more than 8 million emails sent each month.

Under the new deal, Macquarie Telecom will provide the ATO with SIG and cyber security services through its security operations centre from next year.

The deal will also leverage the telco’s sovereign data centres and its Australian Signals Directorate-certified cloud computing platforms.

Shifting from an on premises SIG with only a single entry point to one that is located off premises and provides multiple entry points into each of the ATO’s environments was regarded as a key goal for the procurement.

Macquarie Telecom said it would also “invest in upgrading its whole-of-government SIG” to support the deal.

Following the deal, the telco expects its capex for the current financial year to be between $61 million and $64 million.

The SIG contract was the first ATO service to be re-contested as part of its massive IT outsourcing shakeup that began in late 2018. 

The ATO is now looking to replace its long-running managed network services megadeal with Optus, which is due to expire at the end of June next year, having approached the market for the first of six new managed network services bundles earlier this month.

Other bundles to be market tested over the next two years include the ATO’s $358 million end user computing agreement with Leidos, which was recently extended until November 2021 at the cost of $87 million, and centralised computing.