Computer Sciences Corporation (CSC) yesterday held urgent talks with the Department of Family and Community Services and Centrelink following a decision by both agencies to abort a $1 billion IT outsourcing tender.

CSC's integrated business services vice president Roger Allen confirmed discussions were taking place after the agencies ended the existing tender as a result of the Humphrey Review into the government's IT Outsourcing Program.

Allen described the announcement as "very disappointing" pointing out it is too premature to determine the company's next step despite having spent millions of dollars on the tender process.

He was unwilling to discuss compensation although a Labor Opposition spokesman said the "most likely outcome is that IT vendors will sue as some firms spent up to $5 million" tendering for the lucrative contract.

Centrelink and the department have commissioned an outsourcing assessment to issue a new request for tender which is likely to be less than a quarter of the business originally on offer.

Allen said CSC is yet to decide if it will bid for the new tender as it will "depend on what they are requesting".

"All of these issues are under consideration and will be discussed over the next few days; we have been doing business with the government for 30 years and plan to continue that relationship," he said.

IT Opposition spokeswoman Senator Kate Lundy applauded the decision by both agencies to end the Group 1 tender.

But believes the government must "accept responsibility for the disruption and costs imposed on departments, agencies and IT companies that have spent huge sums preparing tender documentation to date."