Optimation, Gen-i lock-up $140m+ Corrections contracts

The winners of one of the year’s largest outsourcing contracts are due to be announced later today.

The Department of Corrections tender was split into two halves.

The three-year application development, maintenance and support contract, which one well-placed insider told NBR is worth around $40 million, was one by a consortium led by Optimation.

The Optimation consortium also included fellow Wellington company Relsultex, and Indian outsourcer HCL Technology. The initial two year term is followed by two two-year rollovers.

Gen-i's share
The infrastructure half of the tender was won by Telecom’s Gen-i division. 

It includes 2300 mobile connections - now set to be moved to XT - currently with Vodafone.

An insider says the Gen-i contract - which runs for five years - is worth between $100 million and $120 million.

It will see the Telecom division tackle a range of projects for Corrections including cloud computing, high quality video conferencing and dynamic real-time monitoring.

Gen-i will also deliver the department’s IT infrastructure, telecommunications and user support services, including voice and unified communications, data and internet services, boundary security, remote access, video conferencing, data centre hosting, server and desktop management, and print output services.

The agreement also covers mobile services for the Department’s mobile phone users. (Helping to make good on Gen-i's Friday brag that it has won 10,000 government XT connections of the past three weeks).

Final contenders
The Optimation-led consortium and Gen-i replace a range of incumbents.

In the final round of bidding for the new contract, NBR understands Optimation was up against HP in the final round. IBM was an earlier-stage contender.

In Gen-i's case, it was up against Corrections incumbent teleccommunications services TelstraClear.

Gen-i was up against Datacom in the final stages for services work, and the incumbent Vodafone for Corrections' 2300 mobile connections (which will now become XT).

"We believe the local-global model – which as far as we know is unique in the New Zealand market – gave us an edge over the multinationals because of having ultimate decision-making and accountability resting with the Optimation execs in Wellington, while still being able to draw on the scalability and price advantages of an offshore partner [HCL]," a rep for Optimation told NBR.

More government outsourcing ahead?
Some of the functions previously handled by Corrections inhouse will also now taken over by Gen-i under the new contract.

Gen-i Australasia boss Chris Quin said the new agreement is ground-breaking for both Gen-i and Department of Corrections.

“Both the Department and Gen-i see this agreement as a big step forwards for Government outsourcing," Mr Quin said.

One Telecom insider speculates that more outsourcing tenders could be in the works as the government looks to streamline other large departments.

Optimation chairman Neil Butler told NBR his company was in early-stage talks with other government departments in regard to similar outsourcing deals.

IOMS, SAP, Oracle
Corrections has worked with all three members of the Optimation-led consortium on previous projects, including redevelopment and enhancement of the core Integrated Offender Management System (IOMS) and a major SAP upgrade.

The new contract will cover IOMS (which Resultex has worked on since 2005); an Oracle-based Data Warehouse and Business Intelligence environment; an SAP environment; public and internal websites; and electronic content management systems

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