Serious concerns have been raised about IBM's ability to meet the demands of merging the Customs and Immigration computer systems by people familiar with the roll-out of the half-billion dollar contract.

Key points: System failure could have serious national security implications

System failure could have serious national security implications Labor's Shayne Neumann says problems involving IBM's contract would be "deeply disturbing"

Labor's Shayne Neumann says problems involving IBM's contract would be "deeply disturbing" Department says "robust risk management framework" is in place to address potential risks

The ABC has been told IBM looks increasingly unlikely to hit its October 31 deadline and there are growing fears in the Department of Immigration and Border Protection that the risk of a system failure is rising, as the busy Christmas holidays loom and a long-running industrial dispute remains unresolved.

An IT failure could have serious national security implications as the mainframe will manage Australia's border controls, including red flagging terror suspects attempting to enter or leave the country.

In response to a series of questions from the ABC, the department issued a statement saying: "This schedule remains under active review."

"This is common to all major system changes in which the protection of operational capability and security protections remains the overarching priority," the statement said.

The concerns about the enterprise-wide mainframe contract come in the wake of the high profile woes of another federal agency.

The Australian Bureau of Statistics was embarrassed by a census-night shutdown, which Prime Minister Malcolm Turnbull blamed on IBM.

The company is also currently embroiled in a Canadian payroll scandal, where tens of thousands of public servants have been underpaid, overpaid or not paid at all.

And that echoes the billion-dollar health payroll debacle in Queensland, after which the State Government banned its agencies from signing contracts with IBM.

Problems involving IBM would be 'deeply disturbing'

Labor's immigration spokesman Shayne Neumann said any problems involving IBM's contract with the department would be "deeply disturbing".

"You can't muck around with border protection and national security," Mr Neumann said.

"I have been to airports and seen the how the system works behind the scenes and any software problems will affect that."

He also pointed to a damning Auditor General's report that identified "serious and persistent deficiencies" in the department when it came to procurement, and a Rand Corporation review of the merger between Immigration and Customs that said there was "an absence of a solid plan" for executing the integration.

"We can't have a department that's not up to the job and a tick-and-flick minister," Mr Neumann said.

Before Customs and Immigration merged in 2015, two companies had been delivering IT services — IBM for Customs; and CSC, another US information technology giant, for Immigration.

CSC lost the bid for the combined tender and was told in February that its contract would be terminated 20 months early, with the new finish date set at October 31, this year.

That upped the ante on transferring enormous amounts of information between CSC-managed and IBM-managed data centres.

'Robust risk management framework in place'

As that deadline approaches, fears have grown within the department that IBM is not ready and that the system might fail.

There have been meetings between IBM and officials as they war game solutions, which might include IBM hiring CSC's workforce.

The total value through to 2019 of the mainframe contract is $509 million, and it is understood that the department does not have any more money to bolster the transition and is struggling to find the staff it needs within its own ranks to handle the change.

It is just one of many contracts IBM has with the Federal Government.

The department's statement in response to the ABC's questions also said it "has a robust risk management framework in place to address any potential risks that may arise from a large scale change to border systems".

"IBM has had a long relationship with the former Australian Customs and Border Protection Service and has maintained a stable computing environment for critical border systems," the statement said.

IBM said the department was also responding on its behalf.