South Australia refuses to pay Klikon's ac3 business

The South Australian government is gearing up for what could be its third legal fight with an IT supplier within a year, following the scrapping of its over-budget concessions system.

State communities minister Zoe Bettison told a budget estimates hearing last week the government was assessing its legal options around its payment of invoices issued by contractor ac3 - an arm of Sydney solutions provider Klikon Solutions - for work done on the concession and seniors information system (CASIS).

“We will be seeking to not pay those invoices because we do not believe that work has been completed,” she told the hearing.

Ac3 declined to comment to sister publication iTnews.

Originally set up as a shared data centre operator for the state’s universities and government agencies, ac3 was privatised by the NSW government in 2013. Klikon Solutions has since continued the brand as its public sector service business.

The CASIS project began in 2008 with the aim of establishing a single register of all SA residents eligible for concession status and providing a central eligibility calculator. Originally budgeted at $600,000, the project has since hit a cost of $7.1 million.

On top of the blowout and deadline slippages, prime CASIS developer ac3 has since started to wind up the development side of its business.

Bettison claimed that despite assurances from ac3 that the work would still be completed, the supplier “has now walked away from further software development”.

The departure proved the last straw for the CASIS scheme, which has now been officially dumped.

“After seeking information from the Office for Digital Government I have been advised that pursuit of the CASIS project in that form is unviable,” Bettison said.

If the company decides it will continue to pursue the SA government over the unpaid debts, the state could face its third public legal fracas with a tech supplier in only a year.

Lumped with lawsuits

SA’s Health Department settled with the software supplier behind its delayed $422 million EPAS project, Allscripts, after the US company paid $13.25 million out of court late last year.

The state was hauled back before the courts this month by another patient administration system seller, Global Health, which is trying to force it to stop using the out-of-licence CHIRON product.

With CASIS now officially dead in the water, the state Department of Communities and Social Inclusion has been handed $2.2 million to start over, having submitted its business case for a system called COLIN (cost of living concession information).

Bettison said the project team was looking for a “hybrid solution, using commercial off-the-shelf systems and software-as-a-service options”, citing Salesforce as a preferred option.

Opposition parliamentarian Duncan McFetridge questioned whether the state government was up to successfully implementing the new solution, after a tarnished track record of high profile IT headaches.

He used the opportunity to link the new system to its ill-fated military namesake, the Collins class submarine.

“I want to know whether COLIN is going to stay afloat, so to speak,” he said.