Sydney-based research firm Intermedium tracks federal government outsourcing contracts, and according to principal researcher Kim James, the company's data indicates that once an outsourcing relationship was established, it was likely to be continued by agencies through further contract extensions.

"Historically, outsourcing contracts established in the first wave of 'big bang' outsourcing have tended to endure in the larger agencies, except for those which initially outsourced to Advantra - most notably DCITA and DITR, which went on to KAZ and Getronics, respectively," James said, adding research also shows periodic two to three year extensions of outsourcing contracts among the larger departments

James said it is difficult to identify the extent to which outsourcing contracts may be changing in scope over time compared to last year.

Both Immigration and Customs "chunked" their requirements so that prospective providers could bid for some or all of the required services, in a clear move away from "big bang" outsourcing.

"DIMA subsequently awarded Unisys its IT service desk, Internet and e-mail security, and desktop services valued at $140 million over four years, with CSC retaining mainframe and midrange [support], valued at $112 million over four years," James said. "Generally speaking, smaller agencies have not engaged in extensive outsourcing. Where they do, the services are more likely to be selective."

From now on, James believes many agencies will take a "business value" approach, as existing contracts expire and agencies consider their options.

For example, customs is setting the trend in breaking down services into manageable "chunks" to promote greater competition.

"Intermedium has also noted a growing trend toward use of hosted services, particularly managed gateway services, web site hosting, application hosting and business process outsourcing more generally," James said. "This suggests that agencies are increasingly flexible in sourcing a growing range of services, not just infrastructure outsourcing."