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EDS loses another Australian government agency contract renewal

For the second time this month, embattled IT services giant EDS is fighting for its Australian public sector life as government agencies activate sunset clauses on the last of its big outsourcing deals.

The Australian Customs Service has given the services supplier notice of a full-scale strategic review of all IT operations in preparation for the conclusion of its current deal with the supplier, due to expire in June 2007.

The Customs review comes only weeks after the Australian Taxation Office said it would substantively modify all IT suppliers' contracts including EDS', if they wanted to keep their business.

Customs CIO Murray Harrison said the strategic review had become necessary because the agency had changed both its business process and core technologies over the life span of the current EDS contract, which commenced in 1996.

Naming Customs' Cargo Management Re-engineering project as an example of significant change, Harrison said a request for proposal for IT solutions will be put to the market by the end of 2005 or early 2006.

"We are going to do a fairly detailed examination of what we've got and how it [Customs current IT infrastructure and processes] relates to each other. We've set up a new branch - the national strategic planning and sourcing branch," Harrison said.

The new branch has been charged with developing future blueprint for how Customs will both run and procure IT.

Harrison's lead is being carefully watched by CIOs of other government agencies - not least because Harrison chairs the procurement arm of the federal government's influential CIO Committee.

EDS was contracted to build Cargo Management Reengineering in 1996. However, the project stalled and was re-tendered to a consortium headed by Computer Associates and IBM in 2001.

The first stage of CMR, exports, went live in October and is understood to be performing at or above expectations.

While not naming EDS, Harrison said aspects of the project "could have been handled better", adding that CMR was representative of the next wave of strategic IT at Customs as the agency moved away from older transactional systems and onto web-based platforms.

"Obviously we have been focused on CMR for some time and we have to broaden our horizons a bit now. The causing issue is that once the contract of five years plus [four years of extensions] finishes, there is no other option than to go back to the market," Harrison said.

Julian Bajkowski writes for Computerworld


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