Government taps SAP for welfare payment system overhaul

Negotiations on commercial terms ongoing

The federal government has identified SAP as the preferred core software vendor for its mammoth Welfare Payment Infrastructure Transformation (WPIT) program.

Human services minister Alan Tudge said today that there are ongoing discussions with SAP on commercial matters, including value for money.

The WPIT overhaul will see the replacement of Centrelink’s welfare payments system, which dates back to 1983 and is based on the Model 204 (M204) database for IBM mainframes. The total cost of the program is expected to be in the region of $1 billion.

The government in April 2015 announced it had given the go-ahead for the multi-year project. The 2015-16 budget earmarked $60.5 million for planning, scoping and design work.

A procurement process began in September, with the government seeking expressions of interest from vendors.

“This is a once-in-a-generation project that will transform Government service delivery to meet the challenges of the digital age,” Tudge said in a statement issued today.

“The system is one of the largest and most complex in the world, delivering more than $110 billion of payments to over four million households, through more than 100 million transactions each year.”

The government has now gone to market seeking a panel of systems integrators for the project. The government is seeking up to six systems integrators for the panel.

Tender documents released today state that the government is seeking a “partnering model” for the project.

“The nature of the department’s work means that the WPIT Programme will be characterised by significant operational complexity,” the documents state.

“It is likely that the outcomes, specifications and tasks will evolve over time; including after the formal selection of WPIT Programme Partners... Delivering the WPIT Programme and its objectives will require a tailored approach that ensures joint responsibilities for outcomes, co-innovation and a long-term and sustainable Partnership.”

“The department wishes to establish a Partnering model and a Partnership with the Participants that leverage the core competencies, knowledge and experience of the department and its chosen partners while respecting their aspirations and motivations for working with the department on the WPIT Programme,” documents state. “In particular, co-innovation around solution design and delivery will be critical.”

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