Federal Govt accused of "cover-up" over IT outsourcing

The political mud-slinging over a bungled AU$350 million federal Health Group IT outsourcing tender is set to continue.

Senator Kate Lundy, shadow minister for Information Technology, has delivered a stinging attack on former finance minister John Fahey over his role in the controversial federal IT contract in 1999.

Lundy today accused Fahey of being involved in a cover up to conceal flaws in the tender process in which bids by two companies vying for the contract were inadvertently revealed to third competitor, IBM Global Services Australia (IBM GSA).

IBM GSA subsequently revised its bid and won the tender.

Fahey, in September, gave evidence for an Australian National Auditors Office (ANAO) report that slammed the tender. Fahey told the ANAO he believed that tender's integrity had been damaged too much to continue when he was informed of the error by the Office of Asset Sales and Information Technology Outsourcing (OASITO) in 1999.

But Lundy today dismissed the evidence saying at the time Fahey ignored Labor calls for the tender to be brought to an immediate halt.

-This has been a disgraceful cover-up of mismanagement and impropriety" said Lundy. -It's pathetic that Fahey has waited three years to reveal that he allowed a potentially corrupted and flawed tender process to continue".

Lundy has also questioned Fahey's account of the events surrounding the Government's handling of the tender. Fahey told the ANAO inquiry that he regretted that the Probity Officer involved in the situation had not had a greater role in the dispute.

However, according to Lundy, Fahey's statement contradicts evidence given by OASITO to a Senate estimates committee concerning the matter in February 2000. OASITO said that it briefed the probity auditor in person.

"We engaged the probity auditor to participate in all of our discussions to make sure that he fully witnessed the nature of the discussions," said OASITO representatives at the time.

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Talkback 3 comments

    This, The Children Overboard S ...MrDamage -- 06/11/02

    This, The Children Overboard Scandal, the GST. How much more are we going to let the current govt mislead us??

    Dont blame me, I voted Labour.

    MrDamage for your information ...Anonymous -- 07/11/02

    MrDamage for your information most government mismanagement is committed by incompetent public servants rather than the government in power.

    Did you know that Australia has the largest number of public servers per head of capita in the world.

    "YES MINISTER" is ho ...K.Styles -- 07/11/02

    "YES MINISTER" is how this government allows the PS to run the country. Anonymous suggests the PS is to blaim, well; the PS is supposed to be run by the Government!!!!!, not the other way round. All governments copout when it comes to shouldering the responsibility. They most often blaim their servants....The Public Service. The PS is a law unto itself, self serving, because governments don't have the guts to make the PS toe the line.

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