IBM bats away Australian sueball over billion-dollar-blowout

2010 get-out-of-jail free card can't be revoked, says Queensland's Supreme Court

The long-running saga of IBM's botched payroll system in the Australian State of Queensland seems to have come to an end, with Big Blue escaping an attempt at further litigation.

IBM won the project in 2007 and initially quoted a few million dollars for the creation of a new payroll system for the State's Health Department. By 2010, the project had foundered, and staff were being paid wrong amounts when they were paid at all. Costs blew out – past a billion dollars.

Big Blue was later found to have committed ethical transgressions to score the gig.

A commission of inquiry found that IBM may have won the work with wonky work practices, but that the Queensland Government's bad and overly flexible brief, plus lousy project management, were substantial causes of the project's failure.

To address the mess, the Queensland government and IBM in 2010 reached a “Supplemental Agreement” that wiped the slate clean and excused IBM from future attempts at collecting compensation.

But Queensland's government later changed to one of a more conservative political hue and banned IBM from future government work.

It also decided compensation was in order, because of the cost to the State and partly to paint its predecessor as incompetent. In late 2014, Queensland's government filed a claim that IBM sought to have disallowed by the State's Supreme Court.

That august body yesterday decided (PDF) Big Blue is off the hook.

The main issues in the case was whether the 2010 Supplemental Agreement put an end to the matter and the Court found that it was watertight.

Justice Glenn Martin therefore suggests that the Queensland Government should realise it had reached the end of the road. The judge declines, however, to make an injunction that would prevent the Queensland Government from future legal action, as he feels his decision will suffice and the Government has indicated it will walk away from a loss.

So ends Australia's most notable IT project catastrophe, an affair from which IBM and the Queensland Government emerge with diminished credibility. SAP walks away from the affair with pride intact: the company and its software have never been found to be at fault in the project's collapse. ®

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