IBM government contract exceeds budget by over a $1 billion

IBM Australia’s five-year whole-of-government agreement has exceeded $2 billion in value to the vendor - double the initial $1 billion budget, with almost a year still left to run.

An analysis by iTnews - confirmed by the Digital Transformation Agency (DTA) - shows that the value of the whole-of-government agreement was initially put at $1 billion, which at the time was promoted as “the highest value contract negotiated by the Australian government”.

Digital Transformation Agency (DTA) general manager of digital investment advice and sourcing Wayne Poels told iTnews the DTA has already “commenced commercial discussions with IBM” to extend or renegotiate terms.

But the larger than anticipated volume of work under the existing arrangement is also a key discussion topic as the DTA enters discussions about the future of the arrangement.

However Poels was cautious in his comments on where the renegotiation might lead. He said:

“The DTA is monitoring the market and working with agencies to understand the current level of demand across government.”

- CyberBeat