Labor let IBM off after IT bungle on pay system

PREVIOUSLY secret papers show computer giant IBM was let off the hook over the nation's most notorious government IT bungle when the former state Labor government in Queensland promised not to sue it over the delivery of the health payroll system. 
 
In what it described as an "unprecedented" move, Queensland's Labor opposition yesterday tabled in parliament hundreds of pages of confidential cabinet documents, revealing that while in government it had executed a "supplemental agreement" with IBM releasing the company from potential damages claims for "late and defective delivery".

The documents show the September 22, 2010 agreement came despite the government's admission its "preferred position" was not to release the company from liability.

A June 2011 cabinet submission said the state and IBM had agreed to "withdraw all current contract notices and actions", after IBM had rectified some of the system's defects.

"The agreement releases IBM from those obligations that would normally be released had the contract with IBM been finalised in a normal manner," it said.

 

"In addition, from October 31, 2010, the agreement released IBM from any remaining warranty obligations for the system."

The program was plagued with significant defects and overpaying staff more than $94 million.

IBM was contracted in 2008 to co-ordinate the delivery of a new Queensland Health payroll system but, against the IT giant's advice, it "went live" in March 2010 without adequate back-ups.

It led to Queensland Health's 70,000 staff being underpaid, overpaid or not paid for months.

In a departmental submission approved by ministers in September 2010, the government admitted the "high-level nature" and "uncertainty" of its original tender requirements for the payroll system meant it could not enforce the IBM contract's warranties.

A 2010 Auditor-General report found the system was 20 months late from its scheduled final delivery and was about 300 per cent over budget.

Newman government Health Minister Lawrence Springborg has declared the botched implementation will cost $1 billion and has for months demanded the Opposition release the confidential cabinet documents.
Opposition Leader Annastacia Palaszczuk said the release of the documents was a "one-off" due to the "extraordinary circumstances" of the case.

As at October 30 last year, $94.6m had been overpaid to staff, comprising $84m in salary overpayments to 68,648 staff and $10.6m in interim cash payments to 7344 staff.

A December 2010 cabinet submission also revealed some workers received emergency cash payments for their "own personal gain", despite being paid in full.

"It is both appropriate and a legal obligation for Queensland Health to act in cases of suspected fraud," the submission read.

It said 23 matters were referred to Queensland Police and two staff members had been charged. The submission said one staffer had admitted to misappropriating more than $20,000 and was convicted.

theaustralian.com.au 1 Nov 2012

Many government tenders are fraudulent with the 'winning' bid already being organised by both the successful applicant and the people in government in charge of the project.

The corporate media, terms the word 'bungle' falsifying the reality of the situation of fraud.

IBM is also responsible for a nationwide contractor payment fraud in collusion with agencies worth hundreds of millions of dollars, as detailed by corpau in a previous article.