IBM wins $70m Medicare extension

Medicare has awarded IBM a one-year, $70 million extension to its comprehensive technology outsourcing contract after announcing earlier this year that it would review all its information and communications contracts.

Minister for Human Services Joe Ludwig announced the extension today. The contract was set to expire in March 2009, but will now expire in March 2010.

The extension, according to Ludwig, is consistent with the federal government's desire to better coordinate procurement across government. In May, Ludwig said he would seek to better coordinate ICT procurement of agencies under his portfolio, which includes Medicare and Centrelink, with the latter spending some $700 million a year on IT.

"Greater coordination of procurement activity is critical if we are to achieve value for money for the Australian taxpayer and avoid unnecessary duplication," Ludwig said.

Sir Peter Gershon's review of ICT spending by government has still not been publicly released.

A spokesperson for the minister said there were as yet no plans on how to achieve greater coordination.

Under the extension, IBM will continue providing Medicare's mainframe, mid-range, desktop, help desk, secure gateway and data storage. Optus is Medicare's voice and data telephony services supplier. The extension to 31 March 2010 will cost $70.3 million.