SA reviewing options after ICT project cost blowout

The South Australian Government is reviewing its options regarding a $400 million ICT supply agreement signed by the previous government that is already $48 million over budget since being signed last year, according to treasurer Rob Lucas.

The seven-year agreement with DXC Technology for the supply of computers and ICT support was also recently assessed by an independent report of having a “high chance of failure”, and having the potential to cost an additional $40 million to $80 million, Lucas said.

In addition, while the South Australian Government End User Computing (EUC) Project had been promoted by the previous Labor government as having the promise of creating 400 jobs, DXC Technology had unexpectedly offshored most of the Adelaide workforce associated with other contracts in the wake of the agreement.

As a result, only 27 net jobs had been created through the project, Lucas added.

“This project has been an abject failure from the outset — over budget, behind schedule and yet another shining example of the gross financial incompetence and mismanagement of the former Labor government that we’ve been left to clean up,” he said.

The agreement signed in February for the lease of ICT devices such as desktop PCs, laptops and tablets as well as associated support services was intended to supply all government agencies.

But so far only SA Health and the Department of Prime Minister and Cabinet are being serviced through the agreement.

An independent review of the project found that the previous government had ignored the usual procurement methodology and discipline needed to properly manage the project, because it was considered too important to be limited by standard procurement practices.

“The state now finds itself in a position where it has a project that is not set up for success and has a high chance of failure, has a contract in place with DXC that would be costly to terminate,” Lucas said.

“The Marshall Liberal government is now looking to review its options on this project to minimise the extent of additional costs to taxpayers.”

Image credit: ©stock.adobe.com/au/vladimirfloyd

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