Interview: Inside the ATO's Change Program

iTnews: Can you tell iTnews readers a little more about the three major IT outsourcing deals you are working on?

Bill Gibson: There are three bundles timed for when current outsourcing agreements [with EDS, valued at $1.8 billion] come to an end [in June 2010]. There is Managed Network Services, for telephony and internal networks, which has gone to tender and is down to two finalists [Dimension Data and Optus]. There is end-user computing, for all of our desktops and laptops etc, for which an RFT has been released and we are in discussions with five finalists [CSC Australia, EDS, Kaz Group, Lockheed Martin and Unisys]. Then there is the centralised computing - mainframes, mid-range servers and data centres, which goes out to tender in the third quarter.

iTnews: If reports I've read are correct, we are looking again at deals stretching out to ten-year periods. Is there not some pretty incredible risks associated with such long contracts should the deal not be working in the ATO's interests? Does it need to be ten just to get a good price?

Bill Gibson: Typically, we offer four to seven year initial periods with options to extend. We don't do these deals for one and two years. It is a huge investment on our part and the part of our suppliers, for them to understand our needs. We also have to be mindful of other whole-of-government initiatives driving a more coordinated procurement approach, such as the recent centralised negotiations for Microsoft licenses, which gives every agency the economies of [scale of] having large Commonwealth departments grouped together.

iTnews: Who at the ATO will be in charge of ensuring the winners of the new outsourcing deals will deliver what they promise?

Bill Gibson: It will be me. It is an IT services contract, established through a procurement exercise, so ongoing management and performance management will be with me. The procurement group will be asked to form opinions, or I might ask them to help negotiate variations, but at the end of the day the responsibility lies with me.

iTnews: Finance Minister Lindsay Tanner would like to see less money spent on contractors within Government. Does that affect your plans to outsource?

Bill Gibson: The focus of Sir Peter Gershon's review was to release our reliance on contractors employed as individuals in lieu of developing the competency of our workforce. Outsourced agreements are not part of that. When we outsource, it is not prescriptive of people providing the service. We are just outsourcing infrastructure according to service contracts, so it is not subject to that review.

iTnews: But surely a contractor is better than an outsourced worker if the aim is to keep intellectual property closer to the agency?

David Butler: We have been consultative with the Department of Finance all the way through. We give them updates and consistently ask whether we are within the law or even just the spirit of the law. I must commend Bill - he had already done a good job of reducing our reliance on contractors before the review even happened.

iTnews: Do you ever experience any difficulties should you want to implement a new project that is out of scope for your outsourcer - and also not in their best interests to provide?

Bill Gibson: We focus on getting the best business outcomes for the ATO. Usually you work on the premise that what is good for us is good for [the outsourced partner]. Take Voice over IP, for example. We barely knew that even existed when we signed the EDS contract. But we have it in our environment today. There are benefits to us and the service provider - it may be easier for them to maintain, for example. We really have quite a good working relationship with EDS. They can come to us with initiatives they have in mind, we can suggest initiatives they would take up for us. We don't have the difficulties you talk of.