Govt outsourcing 'won't be stopped'

The federal government's IT outsourcing initiative is "here to stay" and "will not be pulled back or changed in any way", according to Cluster 3 contract provider Computer Sciences Corporation (CSC).

Speaking to Computerworld in the wake of the federal government's decision to review its controversial outsourcing initiative, CSC's vice president of integrated business services Roger Allen said it will not result in "any lessening of the program".

"Governments throughout the world have committed to IT outsourcing; Australia is not an orphan but part of a global trend which indicates outsourcing is here to stay," he said. "In my opinion, the review will not change the government's commitment to outsourcing or alter the program."

Finance and Administration Minister John Fahey announced the review following an Auditor General's report which revealed a 300 per cent blow-out in costs and a significant savings shortfall (CW September 18, p1).

Richard Humphrey, managing director of the Australian Stock Exchange, will conduct the independent review that will report to the government in December.

Despite the review, which will examine the impact of outsourcing such an unprecedented volume of IT to private industry, Allen said current tenders for Group 1 and Group 2 are moving ahead.

This is good news for CSC as it has tendered for group one and is competing against Siemens Australia to provide a processing facility for Centrelink and the Department of Family and Community Services.

However, tenders for the Group Nine cluster, which includes the CSIRO, Group 10 and the Department of Defence will not proceed until the government considers the findings of the review.

While IT opposition spokesperson Senator Kate Lundy has labelled the review an admission by the government that the program is a disaster, Fahey has played down the announcement.

With five tenders already let under the program and a further five to go, Fahey said the review is timely and part of the normal course of events.

Fahey announced the review within days of the Office of Asset Sales and IT Outsourcing (OASITO) annual report showing government spending on outsourcing consultants spiralled to more than $91 million in the 1999/2000 financial year.

This is a jump from $46.4 million spent the previous year, a figure which Senator Lundy labelled as "obscene".

Fahey said the scope of the review would take into account the audit report, the views of commonwealth agencies participating in the program, as well as submissions from relevant contractors.

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More about Australian Securities ExchangeCentrelinkCSC AustraliaCSIROCSIRODepartment of DefenceOASITOOffice of Asset Sales and IT OutsourcingOffice of the Auditor GeneralSiemens

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