IBM and Unisys were the big winners in government over the past year, according to recent market research from Intermedium.

Unisys rose 77 places to become the third largest supplier to Federal Government in 2006/2007. Its annual contracts were valued at $158.8 million.

But it was IBM which took the top supplier's spot, chalking up $661.8 million in contracts over the 12 months to September 30. The result was three times higher than second place holder, Telstra (contracts worth $218.3m).

Both IBM's and Unisys' bottom line benefited from contracts with the Department of Immigration and Citizenship (DIAC), an Intermedium spokesperson said.

Commander also leapt 18 places from 24th on last year's list to come in as the sixth largest Federal Government supplier. Intermedium said the shift was predominantly due to the inclusion of Volante's result, which was previously listed separately. Commander also came in as the Federal Government's fourth largest supplier of IT hardware as well as the sixth largest supplier of services.

Noticeably absent from the top five was Kaz Group, which took pole position over the 2005/2006 period with $269.7 million in contracts. The Intermedium spokesperson said that result was mainly due to a $181 million contract with the Department of Defence. Kaz's 11th position this year was more in line with its performance in previous years, the spokesperson said.

The top five was rounded out by CSC in fourth position ($154.7 million) and Optus ($123.8m). Other movers and shakers included defence supplier, Mincom, which lifted from 31st to eighth on the ladder.

In a sign that the skill shortage is impacting government agencies, 20 labor hire companies also featured in the top 100 supplier list.

The top 25 suppliers to government accounted for 65 per cent of total contract value during 2006/2007, with the top three players covering almost one-third of new contract value. Just 73 contracts, worth over $5 million, represented nearly half of the government market, Intermedium stated.

Average contract value was also up from $185,000 in 2005/2006 to $256,000 in 2006/2007. However, Intermedium found total spending was down from $3.6 billion to $3.3 billion annually. IT services was the only segment of the market to record growth, the company said.

Intermedium's report is based on contracts published on the AusTender website.