Revealed: The $25 million IRD tech deal faulted by the Auditor-General

Revealed: The $25 million IRD tech deal faulted by the Auditor-General

A $25 million, 10-year deal for a knowledge management system was at the centre of watchdog's criticisms

Questions asked: one IRD transformation procurement was significantly flawed

Questions asked: one IRD transformation procurement was significantly flawed

Credit: IDG

When the Auditor-General found significant fault with an Inland Revenue IT purchase last month, a few details were missing - like what was purchased and the identities of the winner and the loser.

An Official Information Act request by Reseller News, however, has filled out most of those blanks.

The tender in question was a $25 million, 10-year contract for a new knowledge management system bought as part of IRD's $1.9 billion transformation programme in 2016.

The winner, from a shortlist of two, was Team Asparona, a partnership between Team Informatics and Deloitte.

IRD, however, declined to release the name of the losing bidder.

Announcing the deal, deputy commissioner transformation Greg James said the new system would be an important component of transformation programme, which is “about being focussed on the customer and being smarter in the way we use information.”

“We’re confident that Team Asparona will design a solution that meets our objectives and has the flow on effect of simplifying tax for customers," he said.

The Auditor-General faulted IRD for accepting new pricing from one supplier but not giving the same opportunity to the other short-listed supplier.

IRD told Reseller News the alternative price submission was received unsolicited and had no bearing on the outcome of the tender - this was because price was not weighed for evaluation purposes during the procurement.

However, announcing the deal in a transformation update notice November 2016, IRD said: “Team Asparona offered the most cost effective and fit for purpose solution."

As part of the deal, Team Asparona also gave IRD an option to contract outside the all-of government panel for Enterprise Content management (ECM)-as-a-service, which it was on.

At the time, IRD said it was still negotiating the outcome, but added: “during contract negotiations, agreement was reached that Inland Revenue volumes would contribute to overall government volumes for pricing purposes."

This meant other agencies already using the Team Asparona system would also benefit from price reductions resulting from Inland Revenue’s higher volumes.

Asked about the apparent discrepancy between the statements, IRD reiterated that for the purposes of the tender, price was not given any weighting in the evaluation.

"The factors given a weighting related directly to the proposed solution being able to deliver to Inland Revenue’s capabilities, general design and service requirements, along with client references," IRD said in a statement.

IRD supported this with an excerpt from the tender containing the evaluation criteria provided to vendors.

"Naturally, cost effectiveness is always an important component of any contract Inland Revenue enters into and we stands by its previous comment that the solution provided in this case is cost effective."

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Tags Deloitteknowledge managementIRDInland RevenueTeam Asparona



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