TECHNOLOGYONE SAYS IT WILL SUE BRISBANE CITY COUNCIL FOR $50M IF IT TERMINATES CONTRACT

Written on the 24 July 2017

TECHNOLOGYONE SAYS IT WILL SUE BRISBANE CITY COUNCIL FOR $50M IF IT TERMINATES CONTRACT
ENTERPRISE software company TechnologyOne (ASX: TNE) has threatened to sue Brisbane City Council (BCC) for more than $50 million if it terminates a contract between them to supply 13 customer service systems.

Brisbane-based TechnologyOne and BCC have been engaged in an ongoing dispute for most this year when Lord Mayor Graham Quirk put the software supplier "on notice" for the delayed and over-budget project which was designed to save the city $149 million.

The BCC issued a second "show cause" notice, which TechnologyOne says it has addressed while making requests for extensions of time under the contract, but the company now believes council will try and terminate the contract.

"BCC has made clear through both its actions and its statements that it does not want to complete this project and is endeavouring to engineer a termination of the contract for the breach," says TechnologyOne executive chairman Adrian Di Marco.

"TechnologyOne has now made it clear to BCC if they proceed with a wrongful termination, TechnologyOne will immediately commence proceedings for a $50 million (plus) damages claim."

An independent review found that the project was 18 months overdue and more than $60 million over budget, and the two entities have engaged in a blame game, with 'show cause' notices being issued by each.

Di Marco says he has tried to reach out to Brisbane Mayor Graham Quirk to resolve the dispute.

"Though the Lord Mayor has on many occasions publicly stated that the project needed to be reformed, and that he was committed to doing this, BCC has taken no steps to achieve this and has hindered TechnologyOne from doing so," Di Marco says.

"If BCC lawyers had not assumed control of this project after the Lord Mayor's inaccurate press conference in January, and common sense had prevailed, we would still be on track to meet the contracted 'go live' date," he says.

Di Marco says his company has offered to allow a termination of the contract if BCC pays all outstanding invoices.

"(This) would be substantially less than the cost of a long and drawn out court case that exposes Brisbane ratepayers to a $50 million (plus) damages claim," Di Marco says.

Business News Australia
 

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