Feeds

Australian State to sue IBM over $AUD1bn project blowout

Queensland pulls out the big stick to whack Big Blue

The Essential Guide to IT Transformation

The Australian State of Queensland has reportedly filed a statement of claim against IBM to recoup some cash from an SAP disaster.

Queensland's keen to bash Big Blue because its Health Department engaged the company to build a new payroll system. IBM quoted $AUD6m for the SAP-based project, then upped the quote to $27m. A few years down the track the payroll still wasn't working properly and had racked up $1bn of bills and more than a little pain for employees who weren't paid properly, if at all.

The State launched an inquiry that found IBM did not act ethically in pursuit of the contract. That inquiry also found that public sector workers in Queensland were less-than-stellar managers of their suppliers. To make things worse, a previous State government settled with IBM because it feared that if it was hostile to Big Blue it would walk away and leave it with an even smaller chance of delivering a working payroll.

That sequence of events led the Judge who headed the inquiry to describe the project as “in the front rank of failures in public administration in this country,” before adding, “It may be the worst.”

It now appears that Big Blue will have a day in court. Australian outlet ITNews.com.au reports that Queensland has filed a statement of claim in the State's Supreme Court, a jurisdiction that considers claims of unlimited size.

Government sources did not reveal any details of the claim to ITNews.com.au, citing confidentiality requirements of the process. Nor is it known when, or if, the matter will reach court.

Vulture South imagines cash-strapped Queensland may prefer the quick kill of a settlement, especially if IBM offers up an appropriately-sized cheque. Whether IBM decides to fight, and thereby risk its sharp business practices again being aired, will be interesting to watch. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.