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Unisys in whopper IRD contact worth up to $130M

Unisys New Zealand, the global information technology group, stands to earn as much as $130 million from its eight-year contract to supply mainframe services to the Inland Revenue Department.

The contract to supply the tax department with mainframe hardware, software and operations services was awarded in June, and is worth between $80 million and $130 million, according to a notice published on the government electronic tenders service website. The contract started last month, and is scheduled to end in June 2021.

"The contract value range covers the minimum expected spend under the initial contract through to the maximum cost likely if the contract was extended and/or estimated data processing volumes were higher than estimated," IRD said in an emailed statement to BusinessDesk.

The deal will swell Unisys's annual revenue in New Zealand by at least 12 percent, with the local unit reporting an annual profit of $9.8 million on sales of $85.7 million in calendar 2012, according to financial statements lodged with the Companies Office.

The tax department is in the midst of overhauling the way it operates, including replacing ageing technology to protect its ability to collect tax, and could cost as much as $1.5 billion over 10 years.

The existing FIRST system processes more than 5.5 million transactions a day, and will deal typically deal with 8 million payments and as many tax returns in a year. The Unisys deal is not to replace FIRST, but to maintain and operate current tax collection systems.

Among the reasons FIRST's become stretched over the past two decades is that add-ons to the system to deal with government initiatives such as Working for Families tax credits, student loans, and KiwiSaver, have created complexity.

(BusinessDesk)

Comments and questions
1

You must have a really small notion of how much it costs to run a Mainframe. A few million a year that collects Billions for the government. Seems like a good investment, until they put in the next system. Again a few million a year to collect future billions. Didn't the Aussies spend about a billion dollars to collect their tax in the multi billions range!! NZers are so small minded sometimes....