By Lee Jones
ADELAIDE — The SA government plans to privatise most of its information technology (IT) activities. The Public Service Association and local industry groups have expressed concerns about the timetable, the closed tendering processes and the lack of public scrutiny.
The contract is estimated to be worth $1.2billion over seven years and will be the largest government computing outsourcing in Australia. There is a high potential for disaster, and the costs will be enormous if the project fails.
Once the outsourcing has been done, it will not be feasible for the government to recover its original assets and functions. There have already been several problems where outsourcing from government agencies has failed to deliver promised savings and improvements in function.
The government is determined to have contracts signed by June 30.
The danger of privatisation is that the cost of savings can be wiped out by lack of proper preparation. A government document, "Principles of Outsourcing", states that the potential savings from outsourcing can be completely overshadowed by unexpected costs. Changes to the business over the term of the contract are not predictable, and contract variations are expensive.
A new Office of Information Technology (OIT) has been set up to coordinate the IT outsourcing. Senior staff at OIT were hand-picked according to unknown criteria, without the positions being advertised in the usual manner.
Outsourcing of government information technology means that the government wants to hand over its local and statewide data networks, voice and mobile communications services and large mainframe systems to a US-based multinational company to operate.
Questions relating to the future of the current IT personnel have not been answered. Liberal Premier Dean Brown "hopes" additional jobs will be created in the private sector, but at least 1200 public sector jobs will be lost. As well, an unknown number of private sector jobs are at risk in local IT businesses.
The outsourcing means that information recorded in government files will be handled by private companies. This covers records from numerous department and agency files, including police, family and community services, the health commission and the environment protection authority.
Questions relating to data security, privacy protection and freedom of information have not been answered.
Moreover, how can we be sure that security provisions are adequate to protect these records from unauthorised access? This is especially relevant since there are plans to link the network to Internet, a worldwide network with millions of users.
No business plans will be made available until the process is completed. The June 30 deadline minimises the chance of public scrutiny and criticism before the contract is signed. The government recently supplied financial data to the tendering companies, but the information was requested at such short notice that most of the 12 departments did not have sufficient time to supply complete and accurate details.
A general call for tenders was not advertised. Rather, the government chose two companies, IBM and EDS. These companies alone have been offered the chance to win the IT contract.
If the outsourcing strategy fails, the local IT industry could be starved out by lack of business opportunity, the government won't have any IT expertise in the public sector, it won't have a choice of service providers and it will be forced to pay whatever charges are decreed by the contract provider. It is essential that the outsourcing proposal and strategy be open to scrutiny by government agencies, unions, consumer protection organisations and industry representatives.
Work to rule bans are in place in several IT sections of public sector departments in response to the disregard for workers' conditions and security.