Qld payroll lawsuit ‘rewriting history’, says IBM



news Technology giant IBM has accused the Queensland State Government of trying to “rewrite history” through filing a new lawsuit against IBM over the botched Queensland Health payroll systems upgrade, despite the fact that the two parties had already come to a legal agreement on the issue.

The project was first kicked off in late 2007, when Queensland Health determined there was a need to look at a new payroll platform to replace the previous platform, based on Lattice and ESP software, which had been progressively implemented from 1996. Partially as a result of the fact that the state had decided to standardise on SAP’s ECC5 and Infor’s Workbrain software across its whole of government operations, those same platforms were picked for the Queensland Health implementation.

However, the project, implemented by prime contractor IBM, Queensland Health itself and government shared services provider Corptech — quickly went off the rails as poor governance and the complexity of Queensland Health’s award system kicked in, with the result that many of Queensland Health’s 85,000 workers went without pay for a period, or were overpaid, at various periods from early 2010, when the system went live. The LNP administration in Queensland recently announced additional funding of the project of $384 million, taking total project costs to an estimated $1.25 billion.

A number of audits and inquiries have examined Queensland Health’s payroll upgrade. For example, in June 2010, an audit by Queensland’s Auditor-General found that the project’s difficulties were caused by woeful project scope definition at the project’s commencements, as well as poor governance throughout, especially by the Queensland Government. KPMG has also audited the situation.

A more recent examination of the project by a Commission of Inquiry found damning allegations of procurement impropriety in the appointment of IBM as prime contractor for the initiative, and has concluded that Big Blue should never have won the contract in the first place. The Queensland Government subsequently banned IBM from winning future contracts with its departments and agencies.

Last week the Queensland Government confirmed, despite a previous legal agreement which appeared to absolve IBM of blame in the issue, that it had taken IBM to the Supreme Court in the state over the failed project. In a new statement released today, an IBM spokesperson rubbished the Government’s lawsuit. The statement in full reads:

“The government’s lawsuit seeks to rewrite history by erasing the settlement it reached in 2010 to resolve its differences with IBM over the Queensland Health Project.”

“The government’s actions also ignore the findings of its own Commission of Inquiry. After a detailed investigation, the Commission Report found no evidence that IBM had breached any law or contractual provision when performing on the project. Instead, the government’s hand-picked Commission concluded: the primary cause of the problems suffered by the Payroll System project was the State’s “unjustified and grossly negligent” conduct.”

“IBM worked in challenging circumstances throughout the project – challenges created in large part by the government’s unwillingness or inability to perform its own obligations.”

“As the Commission found: Communicating the State’s business requirements to IBM was required to “result in a functional payroll system.” The State’s failure to provide these requirements to IBM was a “serious shortcoming” and a “material contribution to increased cost of the System to the State, and the problems concerning scope which plagued the system until it went live.”

“Furthermore, once the lack of direction in requirements led to system issues, the State dealt with these issues “in an ad hoc manner” leading to increased costs. This volatility in the Project introduced by the State’s actions “caused the quality of the system to be compromised” and “produced great difficulty for IBM having to build and test a system… in a state of flux.”

“IBM made “genuine attempts” to elicit the requirements, was“sufficiently clear in stating [the] limitations” to its scope and, during the project, “made an attempt to have scope locked down.””

“IBM intends to vigorously defend against the government’s continued efforts to shift blame to the company for the government’s own shortcomings on the project.”

Image credit: Patrick H, Creative Commons