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Fast Enterprises scores $129.7M of new IRD contracts in 2022

Fast Enterprises scores $129.7M of new IRD contracts in 2022

Contractors working on IRD's transformation programme are now required for ongoing support and licensing.

Credit: IDG

With its multi-year, $1.4 billion-dollar transformation now closed, the Inland Revenue Department is settling down to a new form of "business as usual".

That means suppliers who implemented solutions during the department's transformation programme are being contracted for long-term support and maintenance of the tax office's new systems.

Figures released by IRD to Parliament show US-based Fast Enterprises was the major beneficiary, winning four contracts valued at a total of $129.7 million (see chart).

Business intelligence and analytics company SAS Institute was second in terms of contract value, winning $27.8 million in contracts while IRD's long-time software quality and testing partner Assurity Consulting collected $12.6 million worth.

Colorado-based Fast Enterprises is the big winner in IRD's 2022 ICT contracts list.Credit: IDG
Colorado-based Fast Enterprises is the big winner in IRD's 2022 ICT contracts list.

The transformation has seen IRD move from a predominantly insourced service model, whereby it was both the developer and integrator of services, to as-a-service and cloud-based services which are classified as operating rather than capital expenditure.

These become immediately deductible for tax purposes rather than being depreciated. That shift has delivered a startling change in how the agency treats its ICT spending (see chart).

Credit: IDG

Total spending on contractors and consultants in 2022 was $96.6 million, down from a high of $206 million in 2019.

The business case for IRD's business transformation project relied, in part, on headcount reductions to fund the investment. The department had to negotiate a plunge in staff morale as a result, and then the COVID-19 pandemic.

In 2017 the department had 5401 full-time equivalent staff while by 2021 that had reduced to 4106. In 2022 that number dropped further, to 3819 with 212 of those from redundancies at a cost of $25.4 million.

"Over the past five financial years, Inland Revenue has undergone significant restructuring in line with its business transformation programme," the department reported. "Inland Revenue continues to create an agile, intelligence-led organisation built around the needs of its customers."

The department handed back a total of $429 million of capital and operating funding to the government following the closure of the transformation programme on 30 June. $35 million has been retained to complete "residual" activities over the next two years.


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