Entry No.77i

IT Writers Awards

The Victoria police's five-year, $110 million outsourcing deal with IBM GSA has come under scrutiny with a third party review of the contract after just 18 months.

According to a PC Week source close to both parties, the deal began to show cracks about six months ago. Part of the Police's communications network, managed by IBM GSA, allegedly went down in one of Melbourne's major eastern suburbs stations for a full weekend.

Signed in February 1999, the original contract empowered IBM GSA to manage the police's mainframe data centre, LAN desktop, help desk and wide-area network communications, as well as implement a new desktop infrastructure. Covering some 400 police stations statewide, the deal also left open the possibility for the outsourcing heavyweight to undertake future applications development work on behalf of the Police.

According to PC Week's source, however, ballooning costs have meant that it is committing virtually all budgeted funds to cover IBM GSA's fees, therefore neglecting much of its mission critical development work and, on at least one occasion, affecting the availability of part of its communications network.

"Whatever budget [Vic Police] had- they had some for outsourcing, some for application development and whatever- is taken up just paying the outsourcing fees, so they have very little money left for anything else now, that's how bad it is," the source claimed. "[Vic police] is looking at the fact that it's been a big disappointment. It's costing a heck of a lot more money than they originally anticipated.

"The problem was with the police stations, where in some cases the network was failing. One case we know of in [Melbourne's] eastern suburbs, [the network] was out of action for the whole weekend. It was a major police station and there were others that were connected to that one, and they were out of action as well," the concerned whistle-blower alleged.

The source claimed it was because the Police were fed up after 18 months of cost blow-outs that it went to tender seeking bids for a third-party review of its outsourced operations.

Supporting this claim are documents obtained by PC Week that show Victoria Police asking for an independent review of IT services.

A senior executive from Victoria Police, familiar with the IBM GSA contract denied the allegations of budget problems and network downtime. He did, however, confirm that it sought an independent analysis of the contract and was eventually awarded to, and completed by DMR Consulting.

"It was only to review the resources that I have … and after one year, just to do a quick review of what's been delivered. I think things are improving quite a lot actually. They [IBM] are meeting all their service level requirements at the moment," he said.

While the executive said he contacted IBM prior to awarding the review contract to DMR Consulting - owned by IBM competitor Fujitsu- the decision is understood to have been unwelcomed by Big Blue.

An IBM GSA spokesperson said the organisation would "continue to work very closely with Victoria Police" but declined to comment any further.

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