No further tech contractor cuts planned at Services Aus

Services Australia is planning no further cuts to its technology contractor workforce this year after shedding 1245 workers in late 2022 and standing down more over the Christmas and New Year period.

In November, reports emerged that 1000 technology contractors would be let go at the services agency following the end of several significant multi-year projects, including the Welfare Payment Infrastructure Transformation (WPIT).

The WPIT program, a seven-year overhaul of the systems underpinning Centrelink, officially ended in June, but work on one of two major elements – the Entitlement Calculation Engine (ECE) – has continued.

Contractors were also stood down on other projects, including the government’s massive enterprise resource planning system overhaul that will deliver the “digital backbone” of the Australian Public Service.

At a Senate Estimates hearing on Wednesday, Services Australia chief information and digital officer Charles McHardie said “about 1245” contractors – the equivalent of 1000 full-time equivalent roles – were “released” in December, but he ruled out any additional cuts this year.

“There’s no plan to let any further contractors go this year,” he said, adding that this was completed by a 4-6 week stand down over Christmas to “allow the contractors to have a break, allow the public servants that monitor and direct the contractors to have a break”.

Mr McHardie said Services Australia had devised an “integrated work plan to enable us to be able to deliver on all of our committed projects that we have underway”, including a major upcoming software releases that will bring a digital Medicare card to the myGov app in March.

“The integrated work plan allows us to move through to the end of the year with the workforce that we now have,” he said.

In significantly reducing its contractor workforce, Services Australia is now close to its target of having a 70/30 blend between APS staff and contractors in its technology services group by June 2025.

The agency revealed its plan to reduce contractors and increase the number of APS staff in July 2021, following criticism from the Community and Public Sector Union that the agency had “lost sight of the benefits of in-house IT”.

Mr McHardie said Service Australia now has a split of 67/33 between APS staff and contractors, down from the peak of 48 per cent contractors and 52 per cent public servants over the last three years.

“If you look at the amount of work that the agency has had on over the last couple of years, we have had to bring on a lot of contractors to deal with COVID emergencies, the work that we did in the floods, the bushfires, plus we had a lot of large project work,” he said.

“[We also had] very large programs of work where we just didn’t have the range and the depth of skillsets that we required to deliver on that work, so a lot of contracted workforce was brought into the agency.”

Mr McHardie also revealed at Estimates that Services Australia had quietly assumed Infosys’ systems integrator (SI) role on the rebuild of the Entitlements Calculation Engine (ECE) used to determine Centrelink payments.

The ECE – which is one of the projects connected to a lobbying scandal involving former Services minister Stuart Robert now under review – is a Pegasystems-based platform that has been developed to replace Centrelink’s legacy income security integrated system (ISIS).

Work on the complex project has been ongoing since November 2019, when Infosys won the initial standing offer and a $18 million contract for proof-of-design work. Since then, the company won additional contracts worth close to $150 million.

Mr McHardie said that although the work orders were originally set up so that Infosys was the SI and had end-to-end responsibility, this changed when the project progressed to the second phase in November 2021.

“As we moved from… program increment 0 to program increment 1, the agency took on responsibility as [the] prime SI, so we then became responsible in all respects for the delivery of the program and we then shifted the contractual arrangements with Infosys to… time and materials,” he said.

Mr McHardie said work on the ECE is continuing. The platform entered production in October and is now being used in “shadow mode”, allowing the system to be used alongside the former Model 204 system.

Do you know more? Contact James Riley via Email.

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