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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