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South Australia coughs up $394M for DXC Technology outsourcing deal

South Australia coughs up $394M for DXC Technology outsourcing deal

The state government reveals further details of its landmark end user computing deal

Adelaide - where DXC Technology will establish its new office to service the SA Government.

Adelaide - where DXC Technology will establish its new office to service the SA Government.

Credit: Dreamstime

$394.2 million. That’s how much the massive multi-year end user computing contract CSC (now DXC Technology) struck with the South Australian (SA) Government earlier this year is worth.

The landmark deal was awarded to CSC in February, prior to the completion of the company’s spin-merger with Hewlett Packard Enterprise’s (HPE) Enterprise Services business to form DXC Technology, launched in early April.

At the time, the SA Government said that CSC would provide and support desktop PCs, laptops and tablets to the state’s government agencies, with much of the government’s IT hardware footprint set to be handled by the IT services provider.

“The state will no longer own and manage physical devices, giving agencies more flexibility and access to innovative ICT solutions to help modernise the services they deliver to the community,” a statement issued on 16 February by the office of South Australian Premier, Jay Weatherill, said at the time.

“This approach, which reflects one of the state’s economic priorities to achieve growth through innovation, uses government purchasing power to help create services and grow the local ICT industry.

“This more efficient, end-to-end approach will reduce costs as government will only pay for the services it consumes.

"Once implemented, the new arrangement is expected to deliver savings of over $11 million per year,” it said.

At the time, however, the government stopped short of publicly disclosing the value of the deal.

Now, thanks to fresh documents published by the SA Government, further details of the deal have been revealed, including its value and length.

The end user computing contract is for an initial term of seven years – to February 2024 – with an option to extend for three further periods of 12 months each – coming to 10 years in total, according to the contract notice.

The agreement includes provision of an end user computing (EUC) solution and related services.

In addition, the deal’s core services include device leasing and support, device lifecycle services, virtual desktop services, application packaging services, software asset management, remote systems management, and on-site support services.

The documents also reveal that the SA Government acknowledges that DXC Technology will perform the services using personnel, resources and facilities located in offshore locations.

However, the contract details show that, for its part, DXC Technology acknowledges that the State has adopted policies and practices for security of its information assets that could require some outsourced services to remain within Australia.

The deal will see DXC Technology invest $5 million to establish a new office in Adelaide to make way for increases in its workforce, which is set to rise from 100 to more than 700 by the end of the contract period. CSC will also establish a centre of excellence for end user computing.

At the same time, the government conceded in February that the move to outsource its IT services could see up to 180 of its full-time equivalent staff that are currently delivering end user computing services across the government’s footprint asked to re-apply for a position with DXC Technology.

When the contract was first announced in February, the state government said the new contract is expected to provide reskilling and employment opportunities for up to 30 General Motors-Holden workers – the company’s Elizabeth manufacturing plant is set to close in October this year.
The contract document makes no mention of this arrangement.

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Tags outsourcingcscSouth AustraliaDXC Technology

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