12 Mar 2013

Inquiry begins into Queensland payroll debacle

6:38 am on 12 March 2013

An inquiry into Queensland Health's $A1.2 billion payroll fiasco will look into whether IBM had an unfair advantage in bidding to supply a computer system that caused havoc in the state's healthcare system.

Thousands of public servants were underpaid, overpaid or not paid at all after the flawed IBM computer system was introduced in March 2010 by the former Labor government.

More than 50,000 staff are believed to have been overpaid more than $90 million, AAP reports.

The first day of the Queensland Health Payroll System Commission of Inquiry heard from a representative of the company that was intially the preferred vendor of the computer system.

Former Accenture partner Marcos Salouk said he was surprised to hear IBM had won with a bid rumoured to be about $A100 million below Accenture's and within the government's tight budget.

That tender eventually soared well over the budget and was hundreds of millions of dollars above Accenture's.

In his opening address, counsel assisting the inquiry Peter Flanagan SC, said the probe would look into claims of collusion raised by a whistleblower in an ABC Radio interview in November last year.

He said questions would also be asked of an external contractor, Terry Burns, who was hired to conduct a series of reviews of government computer systems.

Mr Flanagan said Mr Burns, who described himself as having been IBM's "top man" in South Africa, had met with IBM during the procurement process in 2007.

"It will be a line of inquiry to ascertain the nature and extent of those communications, whether they were authorised and whether they gave IBM an unfair advantage."

Mr Flanagan said there was an "atmosphere of urgency" in the procurement process, which he suggested arose from a push to upgrade from the government's outdated LATTICE system.

During the first two-week sitting, 23 witnesses will take the stand.

They will give evidence about the procurement and implementation process to determine if any laws, contracts or code of conduct were broken, and why costs blew out.

About 35 volumes of documents have been tendered in the inquiry, which is expected to cost about $5 million.