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Failed school intranet project spent AU$1.4m on launch party before crashing and burning

Blowouts, corruption, failed projects: just another day in Oz state government IT

By Richard Chirgwin, 15 Feb 2016

Yet another of Australia's state education departments is mired in allegations of misdeeds, with the state of Victoria's failed Ultranet project now the focus of a corruption inquiry.

The project was yet-another grand plan to launch a statewide single portal to connect everybody – teachers, students and parents.

It started with a trial of Oracle's Ultranet software in 2004, full adoption of which became an AU$60 million election promise by Victoria's Labor party in 2006, and first put to tender in 2007. That process was abandoned because nobody could get their price under the $100 million-mark.

After a second tender in 2008, a company called CSG (briefly suspended from the process but re-admitted) landed the $60.5 million contract. By 2012, Victoria's auditor-general found the project cost had nearly tripled to $180 million, and the whole thing was ditched in 2014.

In Victoria's Independent Broad-based Anti-Corruption Commission (IBAC), it's now emerged that Ultranet could have burned as much as $240 million, making it one of Australia's most outstanding examples of sending good money after bad.

As the Australian Broadcasting Corporation reports, the further blowout was previously overlooked because a department official diverted funds from other projects, IBAC was told.

Department executives also “allegedly bought shares in the company that won the contract, CSG Limited, without declaring a conflict of interest,” the ABC says.

IBAC was also told that departmental officials bought shares in CSG, and that there were concerns from the start that the company wouldn't be able to deliver Ultranet.

A deputy secretary in the education department, Darrell Fraser, has been criticised in the inquiry for his part in the project, particularly since after he left the department, he took a job with CSG.

Most egregiously, the department blew $1.4 million on a 3,000-seat promotional event complete with dancers, just before the project was launched and crashed.

Victoria can at least console itself that it's hardly alone in making a hash of its big IT purchases. Queensland Health's payroll system, which burned more than a billion dollars, was the subject of long litigation that the state lost in 2015, when the state's Supreme Court ruled IBM didn't have to pay compensation over the project.

New South Wales' money-pit, also in the education sector, is called Learning Management and Business Reform (LMBR). Since 2006, that project has sent more than $500 million to the bottom of the ocean.

LMBR was supposed to launch in 2014 but is still stalled, and the Sydney Morning Herald reported earlier this month that there's a chance the project could be scrapped.

The NSW government hopes that more than $850,000 worth of Boston Consulting time will give it a framework to avoid future debacles.

Back in Victoria, the IBAC inquiry is going to last three weeks and will hear from 35 witnesses. ®

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