​TechnologyOne blames Brisbane Council for contract hold-up

The enterprise software firm has said the council is not being 'commercially reasonable' with its contractual obligations.

TechnologyOne has called out Brisbane City Council (BCC) for focusing on crossing minor items off a list rather than progressing the project originally expected to upgrade the council's Local Government Systems (LGS).

"In TechnologyOne's view, it is clear BCC has adopted a 'contractual strategy' to not reasonably accept completed milestones, and to not be commercially reasonable," TechnologyOne said in a statement issued on Wednesday.

"BCC also continues to refuse to participate in subsequent stages of the project for no valid reason, which places the project significantly behind schedule."

The public spat began in January, when Brisbane Lord Mayor Graham Quirk directed council officers to renegotiate its contract with TechnologyOne after learning of an 18-month delay in deployment and a potential AU$60 million cost blowout.

Work has since stopped on the 10-year project to replace the LGS at the council; however, TechnologyOne executive chairman Adrian Di Marco told shareholders on Wednesday that Quirk had been given incorrect information during a briefing held the day he went public with his concerns.

"The BCC LGS project was not in trouble when the Lord Mayor made his statement on 25 January 2017," Di Marco said. "Until the Lord Mayor's statement, there was no contractual dispute and all parties were working and progressing to the agreed contracted 'go live date' of January 2018."

The IT systems replacement contract was awarded to the Australian Securities Exchange (ASX)-listed company back in June 2015, and was initially expected to go live on March 30, 2017.

According to Brisbane City Council, it is worth AU$122 million. However, in its letter to shareholders, TechnologyOne commented the deal was worth "approximately" AU$50 million.

In detailing the series of events that has unfolded since work between both parties kicked off, TechnologyOne said that Brisbane City Council's project team "do not understand their own business processes, which leads to confusion".

The IT firm also said that the council is slow in making decisions, if they are at all made.

According to TechnologyOne, the solution requested by Brisbane City Council was an "off-the-shelf" one, but as work began, the council requested further functionality of its software, which TechnologyOne said it provided at no extra charge.

After working with the council to determine what it actually wanted in September last year, the new go-live date was pushed to January 2018, TechnologyOne said.

Shortly after, TechnologyOne said its executives were briefed by the council and told that opposition councillors had heard rumours about a purported project delay from the original contracted go-live date.

"There are no contract delays, as the 'go-live date' of January 2018 has been approved in writing by BCC," TechnologyOne said.

As explained by Quirk in January, after he heard delivery of the contract was behind schedule, he commissioned a review in a bid to "get the project back on track".

"The independent review committee is not negative about TechnologyOne's role in the project to date, but is critical of BCC," TechnologyOne said.

Prior to going public with his thoughts, Quirk received an amended cost from TechnologyOne to the tune of AU$3.6 million, the IT firm explained, noting it is yet to hear back from the council regarding approval.

Quirk and the council has listed the contract cost blow-out to be in the region of AU$60 million.

"These additional costs are not costs being charged by TechnologyOne, and TechnologyOne is not aware of the basis for these additional costs," the company said.

The council gave the ASX-listed company until July 2017 to deliver the software in January, which was not known to TechnologyOne.

"Unless there are significant changes, the Lord Mayor's stated date of July 2017 for the reformation of this project will not be achieved," the company said, noting that as of April, Quirk was refusing to meet to resolve the issues.

"TechnologyOne states that, contrary to the Lord Mayor's statement, the software build has been completed, tested, demonstrated to the BCC in October, and again in December 2016 for the next stage of the project, which is to configure the software to meet BCC's specific business processes," the company said.

"TechnologyOne remains confident of its legal and commercial position and will vigorously pursue its legal rights."