Lundy pursues outsourcing payments

As Labor's Senator Kate Lundy continues to pursue John Fahey 'the embattled Minister for Finance and Administration ' over the implementation of the government's outsourcing regime, it is becoming clear the controversy will not just fade away. Lundy kept the flames fanned this week when she claimed that Fahey's department has failed to answer crucial questions about the payment of $A17 million for strategic advice to a US law firm.

Lundy said the firm of Shaw Pittman was hired by the Office of Asset Sales and IT Outsourcing as a strategic adviser and was paid in US dollars. She further claimed that the Auditor General's report into IT outsourcing showed that Shaw Pittman's original assignments were not competitively tendered and no documentation had been supplied to explain why.

The department had "all but refused to answer" the questions, Lundy claimed. "Yet again the Department of Finance is refusing to reveal the truth about the payments to Shaw Pittman," Lundy said.

Further ammunition was presented to Lundy by the recent failure of the Australian Quarantine and Inspection Service (AQIS) computers during backup procedures on the weekend of January 13 and 14. Lundy claimed that the "catastrophic failure" had left quarantine staff without computer access for almost a week and had resulted in the total loss of some data.

AQIS is part of Group 8 in the Commonwealth Government's IT outsourcing program. Lundy suggested that Agriculture Minister Warren Truss should draw the problem to the attention of Finance Minister Fahey and "demand that contract guarantees are properly met".

Woes also affect private sector outsourcing.

IT outsourcing is a tricky operation at the best of times, but it has come to our attention that one of the big telcos is becoming increasingly concerned about the service it is receiving at the hands of its multinational outsourcing supplier. Tempers are running short as standards of work are in some instances very poor and fees unjustifiably high. In one case a job was undertaken to a spec drawn up by an employee of the multinational and extra payments were demanded to alter it to conform to the client's original spec. The outsourcing supplier claimed that the remedial work was chargeable according to the terms of the contract because it was "a variation".

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More about Commonwealth GovernmentOffice of Asset Sales and IT OutsourcingOffice of the Auditor General

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