The Labor Party was today successful in establishing a Senate inquiry into the Coalition’s controversial $5 billion IT Outsourcing Program.
The Senate Finance and Public Administration References Committee will conduct an inquiry into the Whole-of-Government IT Outsourcing Program, established by Finance Minister John Fahey.
The need for a broad ranging Senate inquiry follows a damning report by the Australian National Audit Office (ANAO), which uncovered a range of problems with IT Outsourcing.
The ANAO report found major flaws in the Coalition’s IT Program, including:
Direct financial savings from outsourcing achievable by agencies were overstated; The cost of implementing IT Outsourcing Program blew-out from $13 million to $40.38 million; $25.78 million was paid to ‘advisers’ for fees and expenses; Significant service delivery difficulties were experienced for extended periods by all agencies involved in outsourcing; Agencies and tenderers underestimated the complexity involved in simultaneously transitioning to IT outsourcing; Help desk services experienced the highest levels of service delivery disruption; Financial penalties applied for contracted service levels that were not met totalled $4,660,000; Weaknesses in applying proper privacy principles and privacy contractual arrangements.
“With support from the cross-benches and an amendment by the Democrats, this inquiry will hopefully force the Coalition to account for their IT Outsourcing fiasco, Senator Lundy said.
The terms of reference for the Finance and Public Administration References Committee are:
The Senate Finance and Public Administration References Committee will inquire and report on:
The Government’s IT Outsourcing Initiative in the light of recommendations made in the Committee’s report, “Contracting out of Government Services: First Report – Information Technology”, tabled in November 1997, and the Auditor-General’s Report No. 9, 2000-2001, and the means of ensuring that any future IT outsourcing is an efficient, effective and ethical use of Commonwealth resources, with particular reference to -
a) the need for
(A) strategic oversight and evaluation across Commonwealth agencies,
(B) accountable management of IT contracts, including improved transparency and accountability of tender processes,
(C) adequate safeguards for privacy protection and security;
b) the potential impact on the capacity of agencies to conduct their business;
c) savings expected and achieved from IT initiatives;
d) the means by which opportunities for the domestic IT industry, including in regional areas, can be maximised.
101/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
