FOLLOWING the war of words between tech services provider TechnologyOne (ASX: TNE) and Brisbane Lord Mayor Graham Quirk, the Brisbane City Council (BCC) has terminated its contract with TechnologyOne.
The contract to supply 13 customer service systems in Brisbane City has been the subject of ongoing, public dispute between the BCC and TechnologyOne, with the former complaining it was delayed and over-budget.
Last week BCC terminated the contract, and in an ASX release TechnologyOne has detailed its intentions to sue the council for more than $50 million in damages for wrongful termination.
In a release TechnologyOne has chastised the BCC for its handling of the situation since January this year.
"TechnologyOne sees this as a positive step forward for our business, as BCC was no longer genuinely pursuing a resolution to the dispute because of reasons outside TechnologyOne's control," says TechnologyOne in a release.
"Now that the contract has been terminated by BCC, TechnologyOne is able to pursue the matter in court, and at the same time redeploy our resources to constructive projects."
Executive Chairman of TechnologyOne, Adrian Di Marco, had some choice words for Lord Mayor Graham Quirk, saying that he was "bewildered and disappointed" by the council's actions.
"TehcnologyOne was at the time caught by surprise by the Lord Mayor's announcement," says Di Marco.
"This matter should never have been put in the public arena by the Lord Mayor.
"BCC should have first followed the remedial processes allowed for in the contract away from the public spotlight. This would have allowed us to find a commercial resolution.
The release goes on to say that the BCC was unable to complete its obligations under the contract, a point which Di Marco says was revealed in a separate report compiled by the Mayor's LGS independent review committee. Di Marco says the council has continually refused to release the report to the public.
"If the report is damning on TechnologyOne then BCC would have released it," says Di Marco.
"BCC are hiding this report from the public because it is damning on BCC and it will expose their unprofessional and disingenuous behaviour."
Now that BCC has terminated the contract with TechnologyOne the tech group is now seeking to sue the council, which could cost Brisbane ratepayers more than $50 million dollars.
"Projects at times have problems, and in my 30 years in business, when this happens people get in a room to discuss it and find a commercial resolution. People do not go public until all avenues have been exhausted, especially if they have not previously raised a problem, let alone attempted to resolve the matter," says Di Marco.
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