Tech giants add $12.5m professional services bill to Defence work


Joseph Brookes
Senior Reporter

The Department of Defence will pay Amazon Web Services and Microsoft nearly $12.5million over the next 15 months for ‘professional services’ to support Defence projects using the US tech giants’ software and infrastructure.

The contracts come through the massive whole-of-government deals the companies hold with the Commonwealth, but one was not declared by Defence within normal reporting requirements.

Defence expects to pay Microsoft $7.9 million over 11 months for professional services, while Amazon Web Services (AWS) was handed $4.58 million for 19 months support services on enterprise data hosting.

Both contracts were reported publicly last week, but the AWS work began in early March, meaning it should have been reported months ago. The introduction of a new AWS whole of government agreement delayed reporting, according to the department.

The contracts were awarded through limited tender because of their establishment through the whole-of-government agreements the US giants hold with the Australian government.

Microsoft’s whole of government arrangement is currently valued at $810 million over six years while AWS started a new $174 million arrangement last month after its previous three-year version ballooned 10x to $390 million.

A spokesperson for the Department of Defence said the $4.58 million AWS professional services contract was for “for professional services in support of Defence’s enterprise data hosting capabilities”.

According to the contract notice, the professional services started on March 7, but the contract was not reported until June 23, more than double the time allowed for reporting under Commonwealth Procurement rules. This delay was due to the Defence transitioning to the new AWS whole of government agreement, the spokesperson said.

“The new Amazon Web Services Whole of Government Agreement came into effect on 1 May 2022. The posting of [the contract] was delayed as Defence transitioned to the new agreement,” the Defence spokesperson told InnovationAus.com.

The $7.9 million Microsoft contract is for “professional services to support the use, deployment and maintenance of Microsoft products used within Defence”.

Defence is currently undergoing a $515 million data management upgrade to make more strategic use of the information and assets it holds.

The department has also approached the market for multi-vendor ‘Secret’ Cloud Services, which the US giants are candidates to provide.

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