The Australian Taxation Office (ATO) is paying up to five times the market price for IT services and products under its five-year outsourcing deal with EDS, Federal Parliament heard last week.
Describing details of the $487 million outsourcing contract as a "horror story", Opposition IT spokeswoman Senator Kate Lundy said examples of overcharging include paying: $821.12 for a $357 scanner/printer/fax/copier; $163.40 for a $31 ergonomic keyboard; $172.45 for a $69 sound card; and $460.65 for a $300 15in monitor.
"It begs the question: what other overcharging is taking place?" Senator Lundy asked.
"The ATO has been captured by its outsourcing contractor and forced to pay over market price for basic office IT.
"It is no wonder the Howard Government has gone to extraordinary lengths to prevent the disclosure of contract details."
Details of the contract emerged during question time, with Senator Lundy ridiculing claims by the Government that the outsourcing contract will generate $100 million in savings.
"ATO investigations show that the contract will barely make $40 million in savings," she said.
Responding to the claims, the manager of Government business in the senate, Senator Ian Campbell said the ATO is one of the greatest departments in the world when it comes to providing services online and tax payers are reaping the benefits of IT outsourcing.
He said the Government has created a burgeoning and booming IT industry in Canberra, with Australia becoming one of the leading IT economies on the globe.
"There are more Internet connections per capita in Canberra than virtually another other city in the world; we have an Australian home-bred IT industry that is now providing services to the world.
"Senator Lundy has admitted we will save $40 million in this project but that's not enough for her," Senator Campbell said.
EDS was unwilling to comment.