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WHEN the Richard Chesterman QC opened the Queensland Health Payroll System Commission of Inquiry on February 1 last year, his intention was to “determined why such large amounts of money have been lost to the public, whether anything might be recovered; and why such distress was inflicted on the Queensland Health workforce.”
The appointment of CorpTech by the Queensland Government in 2007, who in turn appointed private contractor IBM, was the beginning of an expensive cautionary tale on how not to run an IT project.
Holding Redlich’s Corporate and Commercial Group partner Michael Grosser is an expert in government procurement and probity.
“Probity is now recognised by Queensland Government agencies, statutory bodies and government-owned corporations as being an integral part of how the Queensland Government does business,” he says.
According to Grosser, the absence of a probity advisor in the Queensland Health payroll system tender process created an environment where the fundamental principles of tender and procurement were not upheld.
“By requiring that all tenderers for the undertaking be treated fairly, outcomes that reflect not only transparent and accountable procurement decisions, but also defensible procurement decisions, are more likely.”
It goes on to say the government did not adequately communicate to IBM the business requirements for the workforce of Queensland Health.
“Many projects experience a variation in the initial instructions, also known as ‘scope creep’, as a result of the scope not being detailed or specific enough,” says Grosser.
He says ensuring that the statement of work is finalised prior to entry into a contract will be beneficial in guaranteeing that the project does not waver too far from its objectives.
When the government received its new payroll system from IBM in 2010 it was faulty, late and over budget.
“Terminating a contract and reserving your rights to recover losses, while in parallel engaging alternative providers to get the job done is often the best practical, commercial and legal option,” he says.
He says the findings of the report reinforce the importance of ensuring that, before any deed of release is entered into for an ICT project, the party providing the release must be completely satisfied that the terms of the release strike the right balance.
Michael Grosser will discuss the issue further at a free Australian Corporate Lawyers Association event at the Brisbane Holding Redlich office on March 26 from 7.45am.
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