Queensland drags IBM to court over payroll debacle

Queensland drags IBM to court over payroll debacle

Summary: IBM believes the court case is only to make it a "political scapegoat".


The Queensland government is beginning to seek compensation from IBM after the company failed to deliver as expected on the state's health payroll system.

According to the Australian Financial Review, a statement of claim has been lodged with the Supreme Court. This course of action is in contrast to the former state government's handling of the issue in which Anna Bligh sought to settle the case outside of court.

In 2011, IBM buried the hatchet with the Queensland government, with the company's Australian managing director Andrew Stevens telling ZDNet Australia that it was "behind us and behind Queensland".

Yet the matter was flagged to be dragged through the courts after a change in government saw a new commission of inquiry conducted earlier this year. It found that IBM should have been disqualified from the payroll tender early on, and that a former employee had given IBM preferential treatment.

IBM had disputed the findings from the commission of inquiry, stating that in some cases the government's own inability to clearly articulate its requirements and scope made the successful delivery of the project impossible from the beginning.

The company is continuing to fight the government's case, telling Business Insider that the court case appeared to be an effort by the current government to make it a "political scapegoat".

"In the process of unjustifiably shifting blame to IBM, the government seeks to evade the deal it struck years ago to settle its disputes with IBM. IBM will defend itself vigorously against any proceedings commenced by the Queensland Government."

In the meantime, the state government is pursuing current and former public servants that may have contributed the the payroll disaster.

Topics: IBM, Enterprise Software, Government, Government AU, Health, Australia

Michael Lee

About Michael Lee

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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  • I hope

    that the Qld government has thought this through because in my experience public servants rarely know what they want and commonly seek changes to specs after they've been signed off. Often the changes are so fundamental that earlier specs become useless and work performed has to be written off. If this is the case here, then I suggest that IBM is on pretty solid ground while Campbell Newman might be saddling the Qld taxpayer with a sizable legal bill for nothing.
  • To some extent, but...

    "...stating that in some cases the government's own inability to clearly articulate its requirements and scope made the successful delivery of the project impossible from the beginning."

    The purpose of hiring companies the size and alleged experience of IBM is that they know how to handle this kind of thing. The fact is, CR's are where these big service companies make their margins; they know this already. Complaining about the one thing that takes their projects above the line is disingenuous.

    The facts are that IBM failed to manage the change control process adequately; whether deliberately, as the gov't suggests, or just through incompetence is for the courts to decide. Either way, it's just another highly profitable failure to chalk up.

    I think they tried to milk it and they let it get out of control.
    • Naivety

      @Pachanga-4184c suggesting that govt engages the large consultancies due to their expertise is very naive.

      Lesson number one the bureaucrats learn is that if they want to get ahead in govt, you need to ensure that it doesn't matter what you do but just make sure blame can be diverted from you individually.

      When engaging the consultancies they all know that the people actually doing the work will be quite inexperienced junior staff typically working off shore, with a few high priced suits, generally salesman, blowing smoke up the senior bureaucrats to make them feel like they are real business people.

      The large consultancies are engaged because if and when the sh*t hits the fan, the committee of bureaucrats that made the decision to engage the consultancy can hide the very argument you have made.

      I have worked on numerous such projects and the formula is very clear, and as a result those in the bureaucracy who have learned to play this game best, now hold senior positions in govt departments and instrumentalities and the level of incompetence has become pervasive.
  • Govt incompetence yet again but consultants expect it.

    @KRP1950 is quite right. I have worked extensively consulting to govt department sin several states and the level of incompetence is mind-numbing. However, I also believe that the large consulting companies are quite predatory in their dealings with govt. The large consultancies know any govt project is going to be a mess, they also know that the govt will try to avoid publicity and have the deep pockets to continue to pay in order to avoid a scandal. So the consultancies basically play the govt to extract the maximum revenue.