Queensland govt to take IBM to court over health payroll bungle

The Queensland government has said that it will be taking legal action against IBM to make it pay for the malfunction that occurred in the state's health payroll in 2010.

The Queensland government has confirmed that it will be taking legal action against IBM for a malfunction in the health payroll that occurred in 2010.

Premier Campbell Newman said the government will serve court documents to the tech company, which was responsible for implementing the payroll system.

Thousands of health staff were overpaid, underpaid, or not paid at all when the system was implemented under the former Labor government.

A five-month inquiry, headed by former Supreme Court judge Richard Chesterman QC, was highly critical of IBM, which won the tender for the failed $1.2 billion system. The Commission of Inquiry was established in 2012 , but the actual inquiry did not commence until February 1, 2013.

It found that IBM solicited and received information during the tender process that gave it a distinct advantage over its competitors. IBM was also accused of understating the cost of building a new system in order to win the contract.

The government-commissioned inquiry added a further AU$5 million to the damage bill.

The state government will serve IBM on Monday with a statement of claim over its role in delivering the system.

"I can confirm press reports that we intend to take the matter further," Newman told reporters in Brisbane over the weekend.

"Queenslanders were wronged, we believe, in the pay affair, and we intend to recover money for them — the taxpayers — the men and women of Queensland."

However, an IBM spokesperson has told ZDNet that the company will continue to vigorously defend itself against the government's "continued efforts to the shift the blame to the company for the government's own failings on the project".

"The passage of a year and the hiring of new lawyers by the government cannot change the fundamental facts. This lawsuit is the government's latest attempt to rewrite history by ignoring the settlement it reached with IBM in 2010 to resolve the dispute over the Queensland Health Project," the spokesperson said.

"The government's lawsuit also seeks to run roughshod over the findings of its own Commission of Inquiry. After a detailed investigation, the Commission Report found no evidence that IBM had breached any law or contractual provision when performing on the project.

"Instead, the commission concluded: The primary cause of the problems suffered by the Payroll System project was the state's 'unjustified and grossly negligent' conduct."