Customs, EDS fallout hits Senate

The Australian Customs Service (ACS) lost strategic control of IT with in-house capabilities effectively "hijacked" under outsourcing arrangements with EDS, the Senate's Legal and Constitutional References Committee heard recently.

In hearings before the Senate into the outsourcing of Customs IT to EDS almost five years ago, national president of the Community and Public Sector Union (CPSU) Matthew Reynolds said there was no transition period under the whole of government IT outsourcing program with IT staff shunted out of the agency.

The move, Reynolds said, led to a loss of corporate knowledge and a loss of connection between IT and the goals of the agency.

He said Customs was locked into a deal with EDS for all IT infrastructure and support.

"The computer system in Customs is an essential tool. It is as essential as a pen. So when the system goes down for a couple of hours you sit in a phone queue for 20 minutes losing control over your work; previously processes were in place to resolve issues quickly and for a significant time much of that was lost," Reynolds said.

As a result, the CPSU is concerned about progress on the Customs Cargo Management Re-engineering Project (CMR) which has a July 2003 deadline.

Initially assigned to EDS, the project has been reassigned to a consortium of companies including Computer Associates (CA), Iocore, Aspect Computing and NCR.

EDS will operate services for the ambitious e-cargo project while CA will design, build, test and implement. It will have more than 3000 users who issue permits as diverse as those for quarantine, customs brokers, freight forwarders, shipping lines, terminals and airlines.

However, those involved in the project fear it will not meet deadline.

Tradegate Australia CEO Andrew Robertson said the deadline is only 15 months away, adding that the project is huge, particularly the transition from current legacy systems.

He said the project would be "timely, complex and expensive", warning it could cause disruption to Australia's international transport task.

Decision time

The Australian Customs Service (ACS) is expected to reach a decision this week on its $200 million-plus outsourcing deal with EDS, which expires in March 2003.

ACS has an option to extend its outsourcing arrangements for a further two years with negotiations continuing between the two parties last week.

EDS Australia executive vice president Sheelagh Whittaker told the Senate a decision will be made by the end of April.

Opposition IT spokesperson Senator Kate Lundy warned the ACS and the Cluster 3 group of agencies to not "rush in and repeat mistakes made in the past".

A number of government agencies have shifted to a selective outsourcing model and Lundy said agencies should "shop around" and be creative as "we have the perfect conditions for this to occur".