it just might be the shortest press release in the history of Australian local government:
“TechnologyOne and Brisbane City Council have resolved their dispute over the Council’s LGS Program. In good faith, both parties have now resolved their differences on a without fault basis. The terms of the settlement are confidential. There is no impact on the TechnologyOne earnings as a result of the settlement.”
An accompanying email from TechnologyOne’s PR people said that no further commentary will be made.
That means we need to read between the lines. Both parties have obviously decided that it is in their best interests not to talk about the-year-old dispute nor how it was resolved. There is also no mention of whether work will resume or whether they will call it quits.
We will no doubt find out soon enough – in the meantime neither party will comment.
The acrimonious dispute over the LGS (Local Government Systems) dates back almost 12 months
The detailed timeline is instructive:
- 30 June 2015: BCC awards TechnologyOne the contract for the LGS project, for a contract value of approximately $50 million over ten years. The original contract ‘go live’ date is 30 March 2017. The contract is based on BCC working as a technology partner with TechnologyOne to enhance the software to suit its purposes.
- 2015-2016: development of the project falls behind schedule. TechnologyOne says the reason was because BCC did not understand its own business processes and is not conveying information in a timely manner.
- 7 September 2016: Both parties agreed to a variation in the contract. BCC undertakes to document its business processes before the configuration stage of the project. TechnologyOne agrees to complete the build of the off-the-shelf product before the configuration stage commences, was BCCs not comfortable in the role of development partner. The ‘go live’ date is extended to January 2018.
- 29 November 2016: BCC initiates an independent review of the project by legal firm Minter Ellison, which seeks no input from TechnologyOne.
- 9 January 2017: TechnologyOne officially notifies BCC but there is an increase in the scope of the work because of additional business processes requested by BCC that were not provided for in the contract. TechnologyOne submits a variation for an increase of $3.6 million.
- 25 January 2017 (AM): TechnologyOne is briefed by Minter Ellison. TechnologyOne says the briefing contained no criticism of TechnologyOne, but was critical of BCC’s role.
- 25 January 2017 (PM): BCC Lord Mayor Graham Quirk holds a press conference saying that there was a potential $60 million blowout in the contract and that TechnologyOne is to blame. He says Technology has until July 2017 to deliver the project.
- 25 and 30 January 2017: TechnologyOne issues two statements to the ASX, which it says “correct inaccuracies” in Mr Quirk’s statement. It says that it demonstrated the changes to the software to BCC in late 2016, and that BCCs staff responded positively. It says the meetings were recorded but that refused to release recordings.
- 30 January 2017: TechnologyOne CEO Adrian DiMarco releases a statement: “We have had challenging and contentious projects in the past, but because there are dispute resolution and mediation processes built into all contracts that can be initiated by client is necessary, including the ability to issue a breach notice, this has allowed for the ordinary and professional resolution of disputes, without going public, which is normally both parties interest. Today BCC has not initiated any of these contractual mechanisms and technology one was not aware of a dispute until the detrimental media statements made by BCC.”
- 3 February 2017: TechnologyOne issues a notice of delay because BCC has not addressed the variation for $3.6 million released on 9 January 2017. TechnologyOne says it cannot proceed because BCC is preventing it from performing under the contract.
- 10 February 2017: BCC issues a Notice to Remedy for milestones it says have not been met by TechnologyOne. TechnologyOne says the milestones have been delivered, and the BCC’s overly bureaucratic approach is delaying the project.
- 6 March 2017. Two senior BCC executives responsible for the project leave the Council. TechnologyOne says this means that BCCs staff are now not prepared to make decisions, which hinders any further progress on the project.
- 13 April 2017: TechnologyOne issues a notice of breach against BCC, saying the BCC has a contractual strategy of delaying the project.
- 18 April 2017. Mr Di Marco writes to Mr Quirk and offers to meet face-to-face to resolve the matter. Mr Quirk refuses the meeting.
- 27 April 2017: BCC issues a second Notice to Remedy.
- 28 April 2017: TechnologyOne releases a statement to the ASX saying no significant progress has been made since Mr Quirk’s press conference on 25 January because BCC is “continuing to frustrate the project.”
- 2 May 2017: TechnologyOne formally disputes BCCs second Notice to Remedy.
- 26 June 2017: BCC issues TechnologyOne with a second Notice to Show Cause.
- 17 July 2017: TechnologyOne provides BCC with a response to the second Notice to Show Cause, claiming “BCC actions and inactions are causing the project to proceed more slowly than planned and are preventing a compliant system being implemented in operating by the contracted date.”
- 24 July 2017: TechnologyOne provides a further statement to the ASX saying “BCC has made it clear through both its actions and statements that it does not want to complete this project, and is endeavouring to engineer a termination of the contract for breach. TechnologyOne has now made clear to BCC that if they proceed with the wrongful termination, TechnologyOne will immediately commence proceedings for a $50 million plus damages claim.”
- 28 July 2017 (AM): BCC terminates the contract, due to what it says were TechnologyOne’s “persistent and ongoing contract breaches, significant and unacceptable delays in progressing the contract and a complete loss of faith in the company’s ability to deliver a replacement system for Council’s IT systems.”
- 28 July 2017 (PM): Mr Di Marco responds saying BCC’s senior executives were trying to cover up a review into the project. The Australian Financial Review reports him as saying “the behaviour of the council is unprofessional and disingenuous and they’ve buried the truth.”
- 11 August 2017: Brisbane’s Courier Mail reports that BCC has lost $26 million on the contract. $2 million of that went to Minter Ellison for its initial report into the project, $1.1 million to Deloittes for IT advice, $1 million to KJ Ross & Associates for ‘software assurance’ and $340,000 to consultancy Democracy Intelligence for a report into the project. The report said $21 million had been paid to TechnologyOne before BCC suspended payments in October 2016.
- 5 December 2017: the parties issue a terse statement saying that they have resolved the dispute on no-fault basis, and that they will make no further comment.
It is over now, though repercussions are bound to continue for some time. In the One can only assume that both parties have seen that any further disputation will get them nowhere.
It is a sorry tale. BCC is Australia’s largest local government authority, and TechnologyOne, based in Brisbane and a proud Queensland company, has become Australia’s largest and most successful software company.
I am not unbiased in this matter. Earlier this year I was hired by TechnologyOne to write its corporate history. I immersed myself in the company’s background and ethos. It is the biggest supplier of software Australia’s councils, and has a record of success and customer satisfaction.
I do not have anything like the same knowledge of Brisbane City Council, but I cannot see that it is on the right side of this dispute. Its behaviour has been demonstrably lacking in transparency, and TechnologyOne has a strong track record in dispute resolution.
It seems certain to me that had the matter gone to court it would have been very bad news for the Council’s finances and reputation. The resolution gives BCC a way out, while not significantly harming TechnologyOne. We can only hope that all involved will put it all behind them.
What an unfortunate, and totally unnecessary, series of events.
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