CSC extends Cluster 3 outsourcing deal

The Federal Government has extended its Cluster 3 outsourcing deal with CSC signing a four-year contract extension at a cost of $157 million.

The deal was signed earlier this week and covers the provision of IT services to the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) and the Australian Electoral Commission.

CSC was the first outsourcing provider to be awarded a contract under the Federal Government's Whole of Government IT Infrastructure Outsourcing Initiative back in 1998 under a five-year, $160 million deal with Cluster 3 agencies.

The new contract extension starts on July 1, 2003 and is good news for CSC after the Department of Family and Community Services and Centrelink aborted a $1 billion outsourcing tender, which CSC expected to win last year. Despite spending millions of dollars on the tender process, Centrelink pulled out following an Australian National Audit Office report that strongly criticised the controversial outsourcing program.

Instead, Centrelink and the CSIRO rejected the single-service provider model and announced earlier this year it favoured selective IT outsourcing.

Under the new contract arrangements, CSC will provide DIMIA with a full range of IT services that will interface with data and voice services provided by Optus. The contract was signed following an extensive 'value for money' assessment which the Cluster 3 Contract Management Office conducted.

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