ASG sues Victorian Govt over cancelled ERP contract


news Australian IT services provider ASG is suing the State of Victoria with the aim of recovering its costs arising from a terminated contract for an implementation project.

According to the company, the Department of Environment, Land, Water and Planning (DELWP) told ASG that it was taking the “strategic decision” to adopt a new ‘whole of government’ model for its Enterprise Resource Planning (ERP) systems.

This meant that the planned implementation project was being terminated “for convenience”.

ASG said that, pursuant to the contract, the state of Victoria is “obliged to indemnify ASG for its liabilities and expenses arising from the termination”.

The IT firm further said it had tried and failed to negotiate an agreement with DELWP over the amount of the indemnity, and that it had decided to initiate legal proceedings in the Victorian Supreme Court to recover the full amount of its claim.

ASG added that it doesn’t expect any “material adverse impact” on ASG’s profitability as a result of the legal action.

The company further confirmed that it is “on track” to bring in revenue of $185-190 million for the financial year 2016, with an EBITDA margin of 14%.

In its statement, ASG also announced an expansion of its contracts with an unnamed “leading” international construction and contracting group.

The expansion will involve transforming the client’s Oracle applications across its operations in Australia and Asia-Pacific to ASG’s New World platform, as well as incorporating Oracle’s Cloud Services capability.

ASG already supplies the group with a range of application and infrastructure managed services, it said.

The new contract will commence in financial year 2017, and is planned to contribute to ASG’s revenue growth in going forward from that date.

Geoff Lewis, ASG Group CEO, said: “It’s very pleasing to get confirmation through contracts with such a leading international group that ASG has the ability to provide excellent business solutions that make a real difference to the way our customers can do business.”

“As well as delivering a significant improvement to the client’s operating capacity, it will also deliver material savings to the group,” he concluded.

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