“Atmosphere of urgency” around health payroll tender process

A KEY contractor hired by the Queensland Government to review the state government's overhaul of its payroll systems was a senior employee of IBM before the company was awarded a multi-million-dollar contract to deliver the new payroll system.

In the first day of hearings for the Queensland Commission of Inquiry into the bungled health payroll system, Counsel Assisting Peter Flanagan SC told the inquiry how an external contractor recommended a "prime contractor model" be pursued as part of the tender process for the system overhaul.

The inquiry heard that in 2007 the government ordered a review of the overhaul of the state government's payroll systems due to budget overruns.

Mr Flanagan said the government hired several external contractors to conduct the review, including self-described former "top man" for IBM in South Africa, Terry Burns.

The inquiry heard Mr Burns came highly recommended to conduct the reviews, but was largely unknown in the public service and had not previously worked in Queensland.

After conducting several reviews of the system overhaul program, Mr Burns recommended the government undertake a "prime contractor model" to both deliver the program and project-manage it.

Mr Flanagan told the inquiry it was a matter of interest that Mr Burns also came to occupy some of the positions he recommended be created.

The inquiry also heard Mr Burns conducted at least one one-on-one meeting with IBM officials during the tender process in 2007.

Mr Flanagan said despite other contractors tendering for the project being seen as preferred tenderers by government officials early on, later in the tender process, IBM came to be seen as the preferred tenderer.

He told the inquiry he was also concerned at an "atmosphere of urgency" that surrounded the tender process, due to a supposed expiry of the then-existing payroll system.

Mr Flanagan said this was despite the evidence showing there were no concerns about the existing system, which could have remained in place until 2010.

The inquiry continues.

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