IBM Australia has kept its stranglehold on the federal Health Department, with a renegotiation of its service agreement over the next four years. Briefing documents for the incoming Gillard government show former finance minister Lindsay Tanner gave the department approval to open discussions on a contract extension. IBM has provided ICT services to Health since the department outsourced its IT infrastructure to the industry giant in 1999. The current contract, estimated at $126.6 million, is due to expire in June 2011. The agreement has twice been renegotiated — in December 2003 and again in December 2008. The agreement covers the provision of IT infrastructure services across all platforms — end users, midrange, managed networks and mainframes — including services to ministers’ offices in Canberra and their electorates, it says. But it excludes applications development and maintenance, voice, data carriage or gateway services which are supplied by other providers.