ATO picks mainframe shortlist

The Australian Taxation Office has selected a shortlist of suppliers who will bid for the last and largest of its three outsourcing contracts, a high-end computing deal believed to be worth a total of $800 million over five years.

Lockheed Martin, CSC, IBM and incumbent supplier EDS have been shortlisted to compete for the so-called "centralised computing" contract, currently worth $160 million per year.

The shortlist was selected from an expression of interest released on 30 June 2008.

"We believe the four companies short-listed have the demonstrated capability and capacity to meet our current and future business requirements," ATO commissioner Michael D'Ascenzo said in a statement.

"We look forward to working with these companies and discussing with them their proposals for managing the challenging transition to new contracts."

The ATO's centralised, end user and managed network computing requirements will continue to be managed by the now HP-owned EDS until 2010.

It's the second ATO contract where EDS and Lockheed Martin have been pitted against each other on a shortlist. Both were shortlisted for the end user computing work in July for a deal worth $60 million a year.

CSC, meanwhile, is the only outsourcing company to have been shortlisted for all three of the ATO's outsourcing bundles. In March, CSC, Dimension Data, Optus and Telstra were selected for the telecommunications component of its infrastructure, currently worth $55 million a year.

The ATO began breaking up its IT outsourcing contracts in late 2007, which had been monopolised by EDS for the past decade and were worth $1.8 billion over the period.

The agency will release a request for tender to the four short-listed organisations in early 2009.