Centralised Computing Services – Contract 27210

straightforward

clearthinking

tailoredoutcomes

Centralised Computing Services – Contract 27210 (Mid-Term Review)

Department of Health

(Health Information Network)

Document Prepared By

The Birchman Group Asia Pacific Pty Ltd

1 Howard Street

Perth, WA 6000

Birchman Contact

Brian Lee

(08) 9322 2808


The Birchman Group Asia Pacific Pty Ltd – Commercial in Confidence

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Company’s Details

Name Of Entity: The Birchman Group Asia Pacific Pty Ltd

Trading As: The Birchman Group (Birchman)

ABN: 15 116 571 361

Address: 1 Howard Street, Perth WA 6000

Representative’s Details

Name of Contact Person: Brian Lee

Title State Manager

Mobile: 0439 935 196

Facsimile: 08 9486 8566

Email Address: [email protected]

Document Version Control

Document Name: Centralised Computing Services – Contract 27210

Document Type: Mid-Term Review

Document Status: Final

Version No.: 1.0

Date: Friday 22nd November 2013

mailto:[email protected]



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Disclaimers

The following disclaimers are made in respect of this report:

Our findings and observations documented within this report are based on the information that has been provided to us.

We have taken the information provided in good faith as presented and have not conducted detailed validation or cross checking of the information.

There may be further detailed information relevant to our scope which has not been provided or made available to us.

We have been unable to fully complete a comprehensive review due to some information requested not being provided to us.



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Table of Contents

DISCLAIMERS ......................................................................................................................... 2

EXECUTIVE SUMMARY ........................................................................................................... 5

1 THIS ENGAGEMENT ......................................................................................................... 7

1.1 SCOPE ................................................................................................................................. 7

1.2 APPROACH ........................................................................................................................... 7

1.3 KEY STAKEHOLDERS ............................................................................................................... 7

2 INTRODUCTION TO CONTRACT 27210 ............................................................................. 8

2.1 KEY DATES ........................................................................................................................... 8

2.2 HIGH LEVEL SCOPE ................................................................................................................ 9

3 THIS REVIEW – KEY FINDINGS & OBSERVATIONS ........................................................... 10

3.1 OVERSPEND ....................................................................................................................... 10

3.2 CAPACITY ........................................................................................................................... 14

3.3 CONTRACT GOVERNANCE ...................................................................................................... 15

4 RECOMMENDATIONS.................................................................................................... 16

4.1 GET CONTROL – IMMEDIATE ................................................................................................. 16

4.2 GET FIT – MEDIUM TO LONG TERM ........................................................................................ 17

5 APPENDICES ................................................................................................................. 18

5.1 GLOSSARY .......................................................................................................................... 18

5.2 DATA CENTRE CURRENT STATE VIEWPOINTS ............................................................................. 19

5.3 FINANCIAL ANALYSIS – SUMMARY .......................................................................................... 20

5.4 FINANCIAL ANALYSIS – DETAIL ............................................................................................... 25



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Executive Summary

Birchman were engaged by WA Health (Health Information Network) to deliver a ‘Centralised Computing Services Mid-Term Review’, under CUA14008, Quotation Number HIN23813.

The scope of this review was limited to an ‘initial high level review of the contract’ to include:

Expenditure;

Delivery and Quality of Service;

Barriers to Service Improvement; and

Identification of areas where performance could be improved.

The approach used by Birchman to best ascertain what has occurred to date within this contract, was to perform a comparative analysis of financial expenditure versus contract value. This was performed by requesting copies of sample invoices and interviews with Key Stakeholders from both WA Health and Fujitsu.

Key Findings

1. Overspend a. There is a significant overspend of the contract. As at 30-JUN-2013 (27 months into the

contract) information provided highlights an overspend of $26.7m against base contract value. Birchman forecast that if the current level of expenditure is maintained, the overspend by 31-MAR-2015 (48 months into the contract) will be approximately $47.0m. This essentially represents that the budget for 96 months will have been spent in 48 months. Any extension options granted beyond 31-MAR-2015, will further significantly increase the overspend on this contract;

b. There was no Contract Budget (Schedule 3B) for any service other than ‘Base Services’. Whilst the contract provided opportunity for additional services to be provided by the Service Provider, no financial budget was created for such take-up;

c. WA Health invested in DC Expansion Projects where DC’s were inadequate to needs. There was no budget for WA Health to invest in the expansion of DC’s to meet changed or new requirements throughout the term of the contract;

d. Cloud Services have been procured within The Contract. As well as the significant footprint within DC’s, WA Health has established a contract with Fujitsu for Cloud Services (as a variation to the Centralised Computing Services contract). This appears to conflict with a current strategy to provide significant capacity within the Fujitsu DC’s.

2. Capacity

a. WA Health appears to be paying for significantly more DC capacity than required. Based on this review, it is estimated 65% of WA Health footprint in the DC’s is currently surplus.

3. Contract Governance

a. No overall ownership for end-to-end Contract (within WA Health). It has been identified that different stakeholders manage individual components, but no stakeholder manages the holistic contract on behalf of WA Health;

b. Lack of understanding of Contract 27210 (throughout WA Health). It is felt that multiple parties within WA Health need a better understanding of the pricing and inclusions within the contract. This understanding should be applied to investment decisions.



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Note: Birchman deem the above findings to be significant. The original scope for this review included measurements of service. However, timeframe and budget meant this review could not be completed. We deem this to be less of a concern to WA Health.

Recommendations

The following table summarises a number of recommendations made by Birchman, with the intention of addressing the Key Findings that have been presented.

Objective – Timeframe

Key Finding Recommendation

Get Control – Immediate

(i.e. Manage what you have)

1. Overspend 1. Add Financial Reporting to existing Monthly Reports provided by Fujitsu as required by the contract (note: this was a requirement of Schedule 2 Attachment A).

2. Add Network Service costs to every monthly invoice for ease of reconciliation back to budget.

3. Create an awareness within WA Health of the current financial overspend and amend the contract with a relevant budget amendment.

4. Negotiate with the Service Provider to reduce the

2. Capacity current spend and capacity. Consider rationalising DC and Cloud Service arrangements to get effectiveness.


5. WA Health to have opportunity to contribute to Monthly Reporting on Service Provider’s performance.

6. Proactively and holistically manage & monitor the contract spend.

7. Put in place the process of raising/approving formal contract variations to reflect overall contract spend.

8. WA Health to assign or employ an FTE Contract Manager to focus on the overall management of the contract and focus on reducing expenditure.

Get Fit – Medium to Long Term

(i.e. Improve what you have)

1. Overspend 9. Complete forensic analyses of all invoices that have been paid under contract 27210 to date to validate and expand on the findings of this report including allocating spend to each project/initiative.

2. Capacity 10. Consider the use of a more elastic cloud service for development/test scenarios which does not lock WA Health into fixed term agreements with stranded costs.

11. Complete a full capacity plan taking into account known and planned projects to validate DC space allocated.

12. Beyond the initial CCS contract term consider moving away from the Murray Street DC and entering into an agreement with a separate Service Provider for secondary DC services (rather the investing in any further upgrade of this facility.)



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1 This Engagement

1.1 Scope The scope of this CUA was for an ‘initial high-level review of the contract’, to include:

Expenditure: o To Date against the budget; o Deviations from scope and the budget implications; and o An estimate of expenditure over the remaining contract term.

Delivery and Quality of service against contractual services;

Barriers to Service Improvement; and

Identification of areas where performance could be improved.

1.2 Approach In order to perform this review Birchman:

Requested certain information to be provided by WA Health and Fujitsu Key Stakeholders;

Measured, modelled and analysed financial expenditure (contract value vs. actual) for the period up to and including 30-JUN-2013 (i.e. Transition; plus 27 of the initial 48 month term); and

Gathered information on the way services had been delivered and in particular the Data Centre(s) – as this is a major source of cost variation within the contract.

1.3 Key Stakeholders In conducting this review Birchman engaged with the following key stakeholders:

WA Health o Keith Darbyshire; o John Youngson; o Craig Robinson; o Stephen Pattison; o Victor Tsvetkov; and o Daniel Scott. Note: Key Stakeholders were identified at the beginning on this engagement. Towards the end of the engagement (once findings and viewpoints had been determined), Birchman made a number of requests to meet with Bill Leonard. Unfortunately our requests were unable to be met, due to his unavailability in the timeframe.

Fujitsu Limited o Joanne Gooding; and o Aaron Marshall.



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2 Introduction to Contract 27210

2.1 Key Dates

In December 2010, WA Health through the Health Information Network (HIN), entered into a four year contract (i.e. 48 months) with two options to

extend, each of two years (i.e. 24 months + 24 months) with Fujitsu, to provide Centralised Computing Services. This contract is 27210.

Shown on the timeline below are:

1. Periods that span this Contract:

This Review Period (Green); Financial Year Periods (Blue); and Contract Periods (Red).

2. Key Dates/Milestones of this Contract (below the timeline):

Note: There are 2 optional contract extension periods beyond this timeline, each for 24 months. These can extend until:

31-MAR-2017 (i.e. 72 months in total); and

31-MAR-2019 (i.e. 96 months in total)



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2.2 High Level Scope

The following is a high level summary of the Scope of Contract 27210:

Base Services, which are specifically itemised and valued as:

o Server Support; o Storage Support; o Network Support; o Facilities; o Transition; o Change & Release Service; o Transformation Service; and o Pass through Costs (i.e. expenses incurred to operate, such as Power).

Base Services are to be provided for the following environments:

o Data Centres:

Primary Data Centre; and

Secondary Data Centre.

o Some Computer Rooms in:

Tertiary Hospitals;

WA Health Country Health Services; and

Other Metropolitan Health Services Locations.

Base Services were to cover the Management and Support of computing & network

infrastructure located within each of the above environments.

Transition & Transformation, which are specifically itemised as: o Transition

Transition;

Data Centre Relocation;

LAN/WAN Pre-Provisioning;

HP Relocation Services; and

AGFA Relocation Services.

o Transformation

Tools Implementation;

Disaster Recovery;

Technology Plan; and

Server Virtualisation and Consolidation.

Note: Schedule 3B of the contract (contract value) did not cater for any other scope.



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3 This Review – Key Findings & Observations

3.1 Overspend 3.1.1 There is a significant overspend of the contract

As at 30-JUN-2013, the contract has overspent by $26.7m.

The following table briefly outlines the contracts financial situation as at 30-JUN-2013:

Amount ($000,000)

Contract Value as at 30-JUN-2013 $27.2m

Actual Expenditure as at 30-JUN-2013 $53.8m

Overspend as at 30-JUN-2013 $26.7m

The Actual Expenditure identified above has been analysed and categorised into two groups through a process of invoice sampling and interviews:

1. Base Services (i.e. services clearly covered by the contract).

Based on our analysis we calculate that ‘Base Services’ are currently running at 47.00% over the original contract value.

2. Other Expenditure (i.e. services outside of the initial contract value).

Based on our analysis we calculate $13.90m of Other Expenditure as at 30-JUNE-2013, with an on-going commitment of $6.9m per annum (until expiration of commitments).

Refer to Section 5.3 (Financial Analysis – Summary) and Section 5.4 (Financial Analysis – Detail) for the approach and transactions calculated to determine the above situation.

Presented below is a ‘to-scale’ summary of expenditure against the contract.

Note: The purpose of this illustration is to present contract spend (against budget). The forecast

column is to merely highlight areas of known future commitments.



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The key points illustrated above are:

Base Services and Transition & Transformation are approximately 47.00% over Contract Value;

Other Expenditure of $13.90m has been spent as at 30-JUN-2013; and

Other Expenditure has an on-going commitment of $6.9m pa (until expiration).



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Forecast Expenditure

Based on the current level of expenditure, if this were to continue, the contract will overspend $47m by the end of the first period (i.e. 4 years).

The following table summarises this forecast:

Amount ($000,000)

Contract Value as at 31-MAR-2015 $45.0m

Forecast Expenditure as at 31-MAR-2015 $92.0m

Overspend as at 31-MAR-2015 $47.0m

Note: This forecast does not allow for further growth. Should extension options be exercised, this overspends further increases significantly. This $92m forecast covers:

Spend as at 30-Jun-2013 ($53.8m);

Base Services for the remainder of the first term (with a 47% variance).

Remaining Lease Commitments ($6.50m); o For 21 months to 31-MAR-2015

Cloud Service Commitments ($5.60m) o For 21 months to 31-MAR-2015

Should either extension option be exercised, the overspend on this contract will further increase.

3.1.2 No contract value (Schedule 3B) for services other than ‘Base’

The original ‘Base Services’ expenditure was based on the environment as it stood as at contract establishment. The budget never factored in growth predictions (e.g. server numbers, storage, DC capacity, etc.). Therefore it was unlikely that the original budget would have satisfied WA Health needs over the period of the contract, and it should have been factored into the original contract.

Secondly, no contract budget was allocated for additional ‘Project Work’ over the contract period. It is expected that variations to the contract value would occur as formal WA Health contact variations over the life of the contract. While the Service Provider submitted, and had approved, various change orders, there does not appear to be related WA Health variations to the contract ceiling. This has created a general perception that the contract is running significantly over budget when in fact this spend can largely be attributed to ‘Project Work’ and its impact on the base services needed post project (such as additional floor space within DC’s).



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3.1.3 Investment in DC Expansion when DC’s were inadequate

During the term of the contract to date, significant expansion of the DC facilities has occurred both at Malaga and Murray St including the upgrade of network facilities to cater for the increased space and capacity.

Initiated by a lack of capacity at Data Hall 4 in Malaga and Data Hall 1 in Murray St a total of $13.5m has been committed (as per contract change orders #22 and #25) within the contract however this spend has not been reflected in an accompanying lift of the contract value ceiling.

The funding to finalise the DC upgrades and enable WA Health to move out of Malaga DH4 (to reduce rent costs) is awaiting approval before WA Health can implement greater efficiency in DC use. A Stakeholder indicated this would be requested in 2014/2015.

3.1.4 Cloud Services Have Been Procured Within The Contract

WA Health has entered into a Dedicated Infrastructure As A Service (IAAS) arrangement under Centralised Computing Services Change Order #24, which includes a committed monthly cost of $265K per month over a 77 month term, with stranded costs should WA Health terminate this contract.

This appears to be a separate virtual private cloud service with a total commitment of $20.5m and stranded costs should the CCS contract be allowed to expire.

Given WA Health have significantly expanded the DC facilities WA Health is now committed to both a significant head room within DC facilities and a fixed term fixed cost cloud service.

On the surface this does not seem to be a traditional cloud service (in which there are no stranded costs). However, we were not provided with the detail to validate the service or the contractual arrangements around this service.



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3.2 Capacity

3.2.1 Paying for significantly more DC capacity than required

There are two key Data Centre sites being managed within the Contract. These are:

DCM – Malaga; and

DC1 – Perth (Murray Street).

Overall WA Health has the following capacity:

Murray St Data Hall 1 – 121.6kW;

Murray St Data Hall 2 – 222kW;

Malaga – Data Hall 1 – 675kW; and

Malaga – Data Hall 4 – 190kW.

At a high level this gives WA Health 1208kW of capacity and as at September 2013, approximately 433kW was consumed on average (i.e. 35% capacity). While WA Health only pay for power as this is consumed there is a significant floor space cost and fit out cost associated with this extra capacity which is currently idle.

Birchman is unable to comment on whether or not this is an effective model without visibility of a capacity plan to substantiate the size of the investment and capacity.

Whilst the driver for the DC ‘Expansion Projects’ is understood as a lack of capacity at Malaga and Murray St (refer below), no capacity plan or any indication of DC capacity lifetime was available to the review team. One stakeholder suggested that there would be sufficient space for 10 years at current growth rates however no capacity plan is available to validate this.

Newly provisioned DC space in Data Hall 1 (Malaga) and Data Hall 2 (Murray St) are running at approximately 15-20% power capacity (overall WA Health are at approx. 35% power capacity across the 4 data halls). This means that there is significant head room which WA Health have purchased via the DC Expansion project(s) and are paying for but appear not to be using.

Some project activity is currently underway, whereby specific Data Halls are undergoing refurbishment and/or consolidation activities.



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3.3 Contract Governance

3.3.1 No overall WA Health ownership for end-to-end Contract

It appears that no stakeholder accepts or owns responsibility to manage the overall financials of the contract. One party is responsible for the management of ‘Base Services’ within the contract but this does not extend to management of the overall contract spend and projects that occur within the scope of the contract, or ultimately affect the contract value.

As stated in other commentary, Formal Contract Variations (to amend the original Contract Value) were not performed. Formal Contract Variations are important, as this would justify the variance between the contract ceilings and the actual spend.

The formal process that WA Health should follow to increase the contract value, does not appear to have been followed to date, throughout the management of the contract. It is recommended by Birchman that WA Health assign or employ an FTE to have overall management of the contract (refer Section 8; recommendation #8) and that WA Health put in place the process of raising / approving formal contract variations to reflect overall contract spend (refer Section 4; recommendation 7).

3.3.2 Lack of understanding of Contract 27210 within WA Health

There needs to be an awareness and understanding of the scope of services and the cost structures of the contract, in various areas of WA Health. Decisions need to be made with acknowledgement of the implications (or potential implications) to the Centralised Computing Services contract, its financial status and overall value for money.

As an example there was no understanding of the contract commercial terms by the stakeholder interviewed within the WA Health EA Office. Predications and strategies for future growth are developed within this area and the financial & commercial impact of these strategies are a key part of this decision making process.



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4 Recommendations

4.1 Get Control – Immediate The following table summarises a number of immediate recommendations, with intention of addressing the Key Findings presented above.



Get Control – Immediate

(i.e. Manage what you

have)

1. Overspend 1. Add Financial Reporting to existing Monthly Reports provided by Fujitsu as required by the contract (note: this was a requirement of Schedule 2 Attachment A).

2. Add Network Service costs to every monthly invoice for ease of reconciliation back to budget.

3. Create an awareness within WA Health of the current financial overspend and amend the contract with a relevant budget amendment.

4. Negotiate with the Service Provider to reduce the current spend and capacity.

2. Capacity Consider rationalising DC and Cloud Service arrangements to get effectiveness.


5. WA Health to have opportunity to contribute to Monthly Reporting on Service Provider’s performance.

6. Proactively and holistically manage & monitor contract spend.

7. Put in place the process of raising/approving formal contract variations to reflect overall contract spend.

8. WA Health to assign or employ an FTE Contract Manager to focus on the overall management of the contract and focus on reducing expenditure.



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4.2 Get Fit – Medium to Long Term The following table summarises a number of medium to long term recommendations, with intention of addressing the Key Findings presented above.



Get Fit – Medium to Long Term

(i.e. Improve what you

have)

1. Overspend 9. Complete forensic analyses of all invoices that have been paid under contract 27210 to date to validate and expand on the findings of this report including allocating spend to each project/initiative.

2. Capacity 10. Consider the use of a more elastic cloud service for development/test scenarios which does not lock WA Health into fixed term agreements with stranded costs.

11. Complete a full capacity plan taking into account known and planned projects to validate DC space allocated.

12. Beyond the initial CCS contract term consider moving away from the Murray Street DC and entering into an agreement with a separate Service Provider for secondary DC services (rather the investing in any further upgrade of this facility.)

The Murray Street DC is constrained for power capacity

(when compared to Malaga or other Perth facilities) and

WA Health appear to be investing significant spends in

the upgrade of this facility.

Having 2 service providers (one for primary and a

separate for secondary), would provide a sense of

completion, whereby service providers are encouraged

to provide best value for money. It will also ensure that

WA Health is not locked in to one Service Provider (i.e. it

would be an easier task to transition across service

providers).


Nil



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5 Appendices

5.1 Glossary

The following terms and acronyms are used within this report:

Acronym Description

AGFA Agfa-Gevaert (Imaging Vendor).

BAFO Best and Final Offer.

CCS Centralised Computing Services.

CUA Common User Agreement.

DC Data Centre.

DCM Data Centre Malaga.

DH Data Hall.

DOF Department of Finance.

DR Disaster Recovery.

EA Enterprise Architecture.

FSH Fiona Stanley Hospital.

FTE Full Time Equivalent.

GST Goods and Services Tax.

HCN Health Corporate Network (i.e. Finance, HR, etc.).

HIN Health Information Network.

HP Hewlett Packard.

IAAS Infrastructure As A Service.

ISA A vendor.

IT Information Technology.

LAN Local Area Network.

NDA Non-Disclosure Agreement.

QA Quality Assure.

T&M Time and Materials.

TCO Total Cost of Ownership.

WA Western Australia.

WAN Wide Area Network.



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5.2 Data Centre Current State Viewpoints

5.2.1 DCM – Malaga

Data Hall 1

Current State Viewpoint

Status Approx. 20% Capacity. Estimate 10-yr growth.

Space 450m2

Power As contracted = 675kw. SEP-2013 average = 108.3kw.

Racks 158

Impact(s) Paying for unused space. Invested in unused space & racking

Data Hall 4


Status Effectively at Capacity

Space 126 m2

Power As contracted = 190kw. SEP-2013 average = 163.29kw.

Racks 66

5.2.2 DC1 – Perth (Murray Street)

Data Hall 1


Status Effectively at capacity.

Space 114m2

Power As contracted = 121.6kw

SEP-2013 average = 101.8kw.

Estimate per Rack = 1.9kw.

Racks 54 Racks

Impact(s) Power density limited compared to more modern facilities such as Malaga

Data Hall 2


Status 17% capacity as at August 2013

Space 162m2

Power 60.13kw used of 222kw capacity

Racks 59



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5.3 Financial Analysis – Summary

The analysis of expenditure for this contract was performed by Birchman as follows:

Schedule 3B – Used as the baseline for Contract Value; and

Actual Invoices – Used as evidence of Actual Expenditure (provided by Victor Tsvetkov).

Base Services

Per Schedule 3B, the total Contract Value for Base Services (over 48 months) is $44,940,943 Inc. GST.

An internal memorandum was located which states that WA Health negotiated a better Contract

Value position with Fujitsu ($40,428,450). This is $4,512,493 less, over 48 months. If this is correct,

the Contract Value amount could be decreased by a proportionate amount per month (i.e. $94,010).

At the point in time of this review (27 months to 30-JUN-2013), this equates to a variance of $2.54m.

The following analysis of specific Base Services under this contract was performed:

Server Support

Status as at 30-JUN-2013: Variance +$6.17m (Contract Value: $13.86m. Actual expenditure: $20.05m).

Closer analysis has identified:

The volume of servers has increased by 150 (April 2011 = 727; May 2013 = 877).



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Storage Support

Status as at 30-JUN-2013: Variance +$0.50m (Contract Value $1.36m. Actual expenditure: $1.41m).

As there is little variance in Storage Support, closer analysis has not been performed. We expect

however, that there is a direct relationship with the increase in Server Support.

Network Support

Status as at 30-JUN-2013: Incomplete Actual data to determine variance (Contract Value: $2.78m).

As Actual Data is incomplete in Network Support, closer analysis has cannot be performed.

Note (s):

1. Data was not provided for the following periods:

MAY-2011; MAR-2012; JAN-2013; FEB-2013; MAR-2013; APR-2013; MAY-2013 and JUN-2013.

2. Network Support costs are passed through by Fujitsu from ISA Technologies. These costs do not

regularly appear on the monthly Fujitsu invoice with other Base Services expenses.



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Facilities


Closer analysis has identified:

Space (square meter) has increased by 603.08 (April 2011 = 250.00; May 2013 = 853.08).

Includes after hours support and Hard Mac fees of $205,000 (i.e. approximately $7,500 - $8,000

per month) which were not specifically included within the Schedule 3B contract value.

Change & Release Services


As there is little variance in Change & Release Services, closer analysis has not been performed.



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Power Pass-Through


Closer analysis has identified, the increase in Power Pass Through is directly related to:

Server Support – An increase in volume of servers;

Facilities – An increase in the physical space allocated to WA Health.

Birchman acknowledge that there are potentially many reasons for the additional expenses

presented in the above graphs. Within this review we have not explored what these specifically are,

except for the commentary provided beneath each graph. We view that an additional dimension

(columns) could be added to the image presented on page 11; each being a “Reason”.

We believe that some of these reasons are the following:

Growth in Volume – Between Contract Creation and Day 1 (April 2010);

Growth in Volume – Organic Growth during the contract (i.e. April 2010, to June 2013);

Fiona Stanley Hospital;

Other Business Units of WA Health using the Data Centres;

Formal Projects (e.g. HCN Oracle Financials Upgrade Project);

Minor Projects; and

Expenses incorrectly allocated to contract 27210 (e.g. Fujitsu resources under CUA14008, Costs

that were not within the original scope of contract 27210).

A forensic analysis of invoices would be required to ascertain the reasons for expenditure.



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Transition & Transformation

Within this review we have not been able to accurately determine the Actual expenditure for

Transition and Transformation, as actual payments made by WA Health have not been specifically

coded within the WA Health financial system against these components of the contract.

A forensic analysis of invoices would be required to ascertain the expenditure.

Other Expenditure

There have been two significant areas of ‘Other Expenditure’ in this contract:

1. Lease Payments:

a. Actual Expense to 30-JUN-2013 = $12.30m (all paid in JUNE-2013).

b. Forecast Expenditure beyond 30-JUN-2013 = $3.70m per annum.

c. This Expenditure has included payments for the following:

i. Procurement of Equipment;

ii. Procurement of Services to install Equipment within the DC;

iii. Interest Payments, for deferred Lease Payment arrangements.

2. Cloud Services Payments:

a. Actual Expense to 30-JUN-2013 = $1.60m.

b. Forecast Expenditure beyond 30-JUN-2013 = $3.20m per annum.

c. This Expenditure has included payments for the following:

i. Cloud Services for FSH.



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5.4 Financial Analysis – Detail

In completing the Financial Analysis within this engagement (i.e. Contract Value, versus Actual Expenditure in each month), a spread sheet was created to compare these financials.

5.4.1 Financial Year 2010/2011



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Documents

Centralised Computing Services – Contract 27210