DFAT renews Datacom contact centre deal for $176m

The Department of Foreign Affairs and Trade (DFAT) has handed Datacom $176 million to continue managing its contact centre services for another five years.

The Christchurch-headquartered IT services firm will oversee inbound and outbound telephony, as well as processing services, including for the Australian Passport Office (APO), through to 2030.

The renewal comes in the wake of an auditor-general’s report into DFAT’s previous contract with Datacom, which highlighted “significant cost underestimations.”

Originally signed in May 2022 for $6.9 million over one year, the agreement was amended five times, ballooning to $134 million by its expiry on July 5, 2025 - more than 10 times its initial estimate.

In its response to the audit [pdf], DFAT said the increase in value reflected increases in Datacom staffing for the APO from 40 full-time people in the original agreement to 318 for the first year.

The first amendment also reflected Datacom gaining access to the Australian Passport Office’s IT systems to accelerate processing, DFAT added.

The rise occurred during a period of soaring demand following the reopening of international borders post-Covid, though staffing was later reduced to 278.

As of September last year, the full-time staffing level stood at 197 people.

While the previous deal was procured via the Digital Transformation Agency’s Digital Marketplace Panel, DFAT has opted to use the Australian Taxation Office’s outsourcing delivery panel for the new contract.

DFAT declined to comment on the new arrangement when contacted by iTnews.