Health hands enterprise computing to Leidos in $91m deal

The Department of Health, Disability and Ageing has contracted Leidos Australia to supply enterprise computing services for the next three years in a deal worth $91 million.

The contract covers compute, storage, data centre network and cloud services to support department applications and digital platforms, according to the original tender documents.

Currently, these services are supplied to Health by Datacom under a 12-year agreement due to wrap up in mid-2027.

A Health spokesperson declined to outline the department’s transition arrangements from Datacom to Leidos Australia, with the two contracts overlapping by almost a year.

“For security and operational reasons, we do not provide details on transition arrangements. We also do not provide information regarding commercial arrangements,” the spokesperson told iTnews.

The spokesperson also declined to confirm whether the scope of work contracted to Leidos mirrors what Datacom provided, or whether there have been changes such as a downgrade in requirements.

The Datacom deal topped $952 million over 12 years; the Leidos deal, at $91 million over three years, is a fraction of that valuation.

The simplest explanation for that is that Leidos has picked up only a subset of the work that was outsourced to Datacom, which Health confirmed.

“The existing Datacom contract covers multiple services including enterprise computing services,” the spokesperson said.

“The department has put these through a competitive procurement process to deliver sustainable, secure and scalable benefits,” they added, without elaborating.

While the Leidos arrangement is for an initial three years, there are three possible extension options that could ultimately double that duration and see it run through to mid-2032.

The Datacom deal is previously credited with aiding the department's migration of workloads to cloud and in producing remote work systems during the pandemic.