Legislative Council
17 November 1998
 
INFORMATION TECHNOLOGY OUTSOURCING

  The Hon. M.J. ELLIOTT: I seek leave to make a brief explanation before asking the Minister for Information Services a question about information technology out-sourcing.
 Leave granted.
 The Hon. M.J. ELLIOTT: I have been informed that the State Government's information technology outsourcing deal with EDS has been causing problems in one State Govern-ment department (in fact, I have had complaints from others but I refer particularly to complaints coming from one). In the information technology section of that depart-ment, public servants who have approached EDS for the provision of information technology services have been told that the services they were seeking were not available as they were not within the IT contract. The departmental staff themselves say that they had no way of knowing what was in and what was not in the contract, not having access to a copy of it.
 Of perhaps even more concern is that I understand that, as the EDS work is charged by formula, that causes a problem for departments, because they themselves do not know what the formula is. This makes it impossible for departments to make informed decisions about their budgets, particularly in this area and in terms of forward planning. These are concerns that are also reflected in the Auditor-General's recent annual report, which highlights important areas such as final assumed costs, unit pricing arrangements and revised annual percentage price reductions, which I understand at this stage have still not been finalised. My questions to the Minister are:
 1. Will the Minister release a copy of the EDS contract to the parliamentary select committee investigating this issue and, if not, why not?
 2. Will the Minister release relevant aspects of the contract's pricing arrangements and services covered to appropriate information technology divisions of Government departments and, if not, why not?
 3. Will the Government inform the Parliament each year in the annual report of the responsible agency on matters of performance with agreed contract service levels?
  The Hon. R.D. LAWSON: I know that the honourable member has an interest in the performance of the EDS contract and its contribution to this State. The Hon. Mr Elliott is a member of the Select Committee on Outsourcing of State Government Services and was previously a member of the select committee specifically examining the EDS arrange-ment, and he will well know from that experience that the answer to his first question is that a copy of the EDS contract, which is more correctly described as the Information Technology Services and State Economic Development Agreement, of 30 October 1995, will not be made available. A summary, checked by the Auditor-General and signed off by him, has been made available to that committee, and I believe that if the honourable member were to consult his summary he would satisfy himself that some of the uncertain-ties he alleges arising do not arise under the terms of the contract.
 The Hon. M.J. Elliott: Do all the departments have copies of that summary?
 The Hon. R.D. LAWSON: The honourable member, by way of interjection, asks whether all departments have copies of the summary. So far as I am aware, they do not. However, all persons within the public sector who are operating at the interface with EDS are aware, through publications distribut-ed, of the relevant technical and other financial matters which impact upon daily operational decisions. It is unnecessary to provide members of the public sector at that level with the particular contractual forms: they are more interested in operational instructions and information which will be of assistance in a day-to-day sense.
 The honourable member says, in a very general way, that certain public servants are approaching EDS personnel and being told that services are not within the contract. If the honourable member has any specific examples of that I would be pleased if he would provide me with the information and I will certainly make inquiries and bring back an appropriate reply. The honourable member's second question asked for a release of the information relating to the pricing arrange-ments. As members will know, the current arrangements with EDS provide for an interim pricing mechanism, which will, I am informed, shortly be replaced by the finalised pricing mechanism and which will be very close to the interim basis. I understand that within the next month those arrangements will be finalised. If there are any details of those arrange-ments which can be circulated to members I will undertake to make inquiries about that and bring back a reply.
 The third element of the honourable member's question concerned an annual report of performance by EDS within each agency. I am certainly prepared to give consideration to the publication at appropriate times of performance on this particular contract, whether it is agency by agency or category of work by category of work. I am unable to provide details at the moment but I will certainly give consideration to that.
 It is true, as the honourable member should appreciate, that there have been published annual reports of the perform-ance of EDS in relation to its delivery in terms of economic and industry development for this State, and there has been considerable industry development. The company presently employs 700 South Australians whereas it was employing fewer than 200 at the start of the contract. EDS has estab-lished various centres of excellence in Adelaide. It has removed from Victoria to this State all of its data processing for General Motors-Holden's, which has provided significant economic development and employment opportunities in this State. Similarly, it has removed to this State the work that it is performing for Westpac, once again with positive results.
 The Hon. M.J. ELLIOTT: As a supplementary question: does the Minister acknowledge that departments might have some budgetary difficulty if they do not know what the actual costs will be for services that they both have and may require in the future?
 The Hon. R.D. LAWSON: I do not accept the hypothesis underlying the honourable member's question, namely, that departments do not know what their costs might be. I am certainly prepared to also take that particular question on notice and see whether there is any basis for the hypothesis advanced by the honourable member.

 


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