SYDNEY (Reuters) - International Business Machines Corp failed in its handling of the A$10 million ($7.4 million) IT contract for Australia's first predominantly online census, Australian Prime Minister Malcolm Turnbull said on Friday.

IBM was the lead contractor for the five-yearly Aug. 9 household survey by the Australian Bureau of Statistics (ABS) that went offline the day after four distributed denial of service attacks that were caused by the website being flooded with clicks.

"This was not a particularly clever attack or some great international assault on the census," Turnbull told Melbourne's 3AW radio on Friday.

"IBM had a contract to deal with it and they failed," he said.

The style of the attack, which occurred through a router in Singapore, was "common" and "utterly foreseeable," Turnbull said, although it was not clear who was responsible for it.

An IBM spokeswoman declined to comment on Friday, but the company apologized last month to an upper house Senate inquiry over the outage, while also saying that the router was set up by a subcontractor, Nextgen Networks Pty Ltd.

IBM has since reached a confidential settlement with Australia for its role in the breach, Australia's minister responsible for the census, Michael McCormack, said in a statement.

The Senate inquiry heard that IBM failed to test the Singapore router properly, which was wrongly configured and became overloaded, causing the website shutdown.

The inquiry's report, released on Thursday, also criticized the ABS for favoring IBM during the tender process.

"There used to be a saying: 'No-one got fired for buying IBM'," Turnbull said.

"I can assure you the lessons will be very carefully learned," he said.

(Reporting by Tom Westbrook; Editing by Paul Tait)