ATO extends EDS contract for two more years

The Australian Taxation Office (ATO) has extended its outsourcing agreement with Electronic Data Systems (EDS) for a further two years, an extension for which the ATO will pay $300 million.

EDS has supplied the bulk of the ATO’s IT&T infrastructure needs for the past five years under an initial $500 million outsourcing deal signed in June 1999.

Since then some of EDS' work has been in preparing the ATO for Y2K and with a transition to a new GST tax system in 2000.

EDS also worked on the ATO develop and rollout a mobile computing platform, enabling the agency's 2500 field officers to update and access client information online. The platform was also crucial to the successful implementation of GST, EDS officials said.

That initial agreement was regarded as the largest by an Australian federal government agency, EDS said in a statement.

With this contract up for renewal, speculation was rife in the industry that the ATO would consider trying a new approach to IT outsourcing.

Instead, the ATO has exercised an option written into the original contract that will extend the arrangement for a further two years to June 2006.

However, the extension will see some changes to the relationship - EDS will take on some new responsibilities, but also lose the provision of internal telephony and printing systems. These will be put to tender by the ATO before the end of the year.

Meanwhile, EDS is also helping the ATO roll out 20,000 new desktop PCs. The ATO has 19,000 staff across 98 sites.

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