ATO extends DXC contact to 2019

The Australian Tax Office (ATO) has revised its IT contract with DXC Technology, extending its centralised computing supplier deal with the company until June 2019. 

The renewed contract will see an additional $735 million provided to DXC for its services, increasing the value of the contract to $1.47 billion.

The original contract, awarded to Hewlett Packard in December 2010, was renewed with its successor DXC as a result of ‘sector spin-outs’ and despite ‘unprecedented’ hardware failures occurring under its predecessor, the ATO said.

Under the newly revised contract, DXC will provide the tax office with services including data warehousing, mainframe, midrange, storage, data centre facilities, private cloud, and public cloud.

"In consultation with the Digital Transformation Agency, we are revising the way we would use these services to be in line with government policy,” the spokesperson said.

The extension of the contract will add an estimated $195 million worth of value to the existing agreement. This arises from a number of renewed ATO IT contacts within the coming year. 

"Many of these contracts have been in place since 2009-10, and the market and government IT procurement policy has changed over that time," the spokesperson added.

According to Mike Lawrie, DXC chairman and president, the company is "ideally suited to meeting the needs of a rapidly changing technology marketplace.”

The global IT services industry is "fundamentally changing", he said, moving away from the all-encompassing, multi-year projects that traditionally accounted for much of CSC and HPE Enterprise Services' business.

"Our goal is to produce greater value for clients, partners, and shareholders, along with compelling career opportunities for our people," Lawrie said.

Within the 2016-2017 period, the ATO experienced multiple IT-related outages and complications. One of these outages occurred as a direct result of HPE equipment failure, where recovery measures could not be efficiently provided by the company.

"Recovery procedures for applications in the event of a complete SAN outage had not been defined or tested by HPE," the ATO said.

As a result, to allow proper consideration of the options available, the ATO will revise some services currently offered by incumbent suppliers.

HPE subsequently came to a settlement with the ATO over the failure of its storage software in 2016. Under these circumstances, the ATO conclusively decided to extend its centralised contract with DXC Technology.

"We expect to finalise our new IT sourcing strategy in 2018 and, as part of this, we will progressively extend some services currently offered by incumbent suppliers to ensure continued stability of systems while we approach the market for services," the ATO explained.

Established in 2017, DXC Technology formed from a merger between Computer Sciences Corporation (CSC) and the Enterprise Services business of Hewlett Packard Enterprise (formerly Electronic Data Systems).