Kaz beats 13 to $200m Defence desktop contract

Stan Beer
Monday, 07 November 2005 11:00

IT Industry - Deals

Telstra-owned IT outsourcer, KAZ, has beaten 13 other outsourcers to sign a five-year contract for an estimated $200m to support the desktop infrastructure of the Department of Defence.

Under the agreement, which according to CEO Mike Foster will be very profitable for the outsourcer, KAZ will deliver remote support to 90,000 desktops across 325 Defence sites throughout Australia. The contract includes options for Defence to extend for a further ten years at two-year intervals and KAZ will sub-contract responsibility for network operations to Boeing Australia Limited.

KAZ will recruit more than 200 staff, who will work with members of the Defence force and Boeing Australia from Defence facilities in Canberra. According to Foster, the staff supporting the contract will come from a variety of sources. "Some will be full-time, some will be seconded from Defence, while others will be contractors," said Foster.

Described by Kaz as one of Australia’s largest IT services contract this year, services will be delivered to users over IP Wide Area Networks comprising two security levels: restricted and secret.  The networks will provide access to corporate applications and email as well as specialist Command, Control and Intelligence applications.

The services that KAZ has committed to deliver under the contract include:
• Provision of a 24 hours x 7 days capability managing the Defence Restricted and Secret networks;
• Provision of an ICT infrastructure management capability across Defence’s Central Office functions;
• Enhanced Service levels, particularly in relation to service desk and incident resolution as well as the introduction of ITIL (IT Infrastructure Library) processes; and
• Provision of enhanced support during peak periods throughout the year that heavily affect the ICT support services.

Foster said Kaz will take over functions that were previously run by Defence internally. "They want improved service levels and this is in line with the trend to selective outsourcing," he said. "We are taking over functions that are not core to Defence," he said.

When asked if he felt the deal would be a profitable enterprise, Foster said: "I feel confident that we can deliver the expected outcomes. We looked at this deal well in advance.

"KAZ succeeded following a competitive tender, which short listed 14 of the world’s top IT companies.  This success endorses our ability to leverage the end-to-end ICT capability that we bring to market as part of Telstra, as well as recognition of our flexibility and focus on achieving positive business outcomes for our clients."

Foster dismissed recent speculation in some sections of the media that Telstra has put Kaz up for sale, implying that the I services company would remain within the Telstra fold. "Kaz and Telstra came together because of convergence between IT and telecommunications in the marketplace and that's not going to go away," he said.