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News : Victorian Government Kicks Out IT Supplier
Victoria, Australia, March 30, 2015 -- Victoria's state government has cancelled a controversial technology contract with Tenix Solutions to replace its infringement management system after losing hundreds of millions of dollars in unpaid fines and unserved warrants due to IT problems.
The contract has become the Victoria Ombudsman George Brouwer's poster child for bungled IT projects in the state. The contract required Tenix Solutions to replace Victoria's 15-year-old VIMS infringement management system but, in 2013, the ombudsman revealed the project's budget had blown out by nearly double, was four years overdue and contributing to fine revenue leaks of $1.2 billion.
Victoria's Department of Justice has confirmed to The Australian Financial Review that Tenix Solutions will no longer be retained to deliver the new system but will continue to prove support services for its current system.
"Following the agreement, Tenix Solutions will no longer build a replacement IT system, but will continue to support the existing system, process infringements and operate a call centre relating to the infringement system," a spokesman for the department said.
A year ago, the department had said it was still expecting Tenix Solutions to "deliver on the terms of the contract".
The spokesman said the remaining details of the settlement were confidential and did not comment on whether Tenix would be required to compensate Victoria for lost fine revenue. The news will be a big blow for Tenix, which describes itself as the Victorian government's default enforcement services provider, supporting more than 20 government agencies with the management of infringements, warrants and court orders.
The settlement brings to an end an unfortunate saga for the Victorian government that began in 2006 when its justice department's Infringement Management and Enforcement Services (IMES) issued a tender for the replacement of VIMS.
The department had originally entered a contract with Tenix Solutions for the new system, but since then its budget has blown out. According to a scathing report on the state of Victoria's fine and warrant management published by the Ombudsman in August, 2013, the project was already four years late.
"The main reason offered for the delay and budget overrun was that detailed specifications for the system were not developed prior to the state entering into a contract with the external provider. A 2009 Ministerial briefing noted that 'only high level requirements for the system were documented' and the external provider was contractually required to 'clarify and document the requirements in detail'," the Ombudsman wrote.
However, worse still for the state, the project woes were contributing to a revenue leak mounting towards $886 million in written-off fines (or a yearly run-rate of about $110 million) since 2005 and a further $165 million in unexecuted warrants over the same period.
The Ombudsman observed that VIMS could take up to nine hours to process a query for Victoria's Sheriffs Office.
In Victoria, fines expire after five years leading the Ombudsman to conclude that:
"For each warrant finalised by the Sheriff's Office, five more are issued. This has resulted in a pool of 3.5 million warrants, valued at more than $1.2 billion currently unexecuted."
Notably, it also found the department couldn't update the system to bring its fines management processes in line with legislation that gave it new garnishee powers to recover infringement warrants exceeding $1000.
"There are currently more than 235,000 offenders who could be the subject of this sanction," the Ombudsman observed at the time.
The Victorian Department of Justice did not give a time frame for delivering VIMS replacement.
"The department will develop plans for a new IT system in this area in coming months," its spokesman said.
Posted by Veronica Silva Cusi, news correspondent
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About Tenix Solutions:
Tenix Solutions is a leading provider of Compliance Management Programs to State and Local Governments.
About Government Of Victoria:
Helping you identify and pursue opportunities in Victoria, Australia. Our range of services includes: tailored itineraries and programs for prospective investors with relevant contacts and introductions, detailed local market information on labor supply, costs and market access, assistance with employee recruitment and training, advice on local regulatory issues, advice on relevant industry programs.
Published: Wednesday, April 1, 2015