Defence ICT Procurement Dynamism

6th May, 2010

Matt Hill, Public Sector Analyst

Despite belt-tightening measures, recent announcements indicate that ICT developments will continue to move ahead at the Department of Defence (DoD), with emerging opportunities for local contractors and service providers.

With Defence attempting to extract $20 billion in savings through its Strategic Reform process, with $1.7 billion slated to come out of information and communication technology changes, commentators have been predicting a gloomy season for private sector suppliers. Yet as recent announcements have indicated, opportunity remains.

An Australian Army Blackhawk helicopter.

On May 5th, DoD confirmed earlier rumours that Fujitsu had secured the contract for the department’s Distributed Computing Central Services (DCCS), an expansion of an original 2005 tender of $200 million for the remote support of over 90,000 defence computers nation-wide.

Similarly, rumours continue to circulate indicating that Dimension Data had won another DoD contract, this time for support of the Terrestrial Communications contract. If confirmed, this would represent an upset for existing suppliers Telstra and Optus.

Perceptions of procurement dynamism are further buttressed by the recent success of UXC subsidiary Red Rocks, which recently picked up a $16 million contract for the overhaul of Defence’s PMKeys human resources platform.

CEO Jonathan Rubinsztein is reported to have pointed to the contract as an example of the increasingly positive outlook for local providers in tendering for large-scale contracts.

Other ICT opportunities have emerged at DoD in recent weeks. Of note is the tender for the Next Generation Desktop, aimed at achieving a virtual, thin-client architecture.