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Queensland Health Payroll System Commission of Inquiry

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Queensland Health Payroll System Commission of Inquiry Queensland Health Payroll System Commission of Inquiry REPORT 31 July 2013 The Honourable Richard N Chesterman AO RFD QC Queensland Health Payroll System Commission of Inquiry www.healthpayrollinquiry.qld.gov.au ©Queensland Health Payroll System Commission of Inquiry 2013 The Queensland Health Payroll System Commission of Inquiry supports and encourages the dissemination and exchange of information. However, copyright protects material in this report. The Commission has no objection to this material being reproduced but asserts its right to be recognised as author of its original material and the right to have its material remain unaltered. Queensland Health Payroll System Commission of Inquiry 31 July 2013 The Honourable Campbell Newman MP Premier of Queensland PO Box 15185 CITY EAST QLD 4002 Dear Premier As required by the terms of Orders-in-Council of 13 December 2012 and 18 April 2013 I have made a full and careful inquiry into the implementation of the Queensland Health Payroll System, and present the Report of the Commission of Inquiry. Yours faithfully The Hon Richard Chesterman AO RFD QC Commissioner Queensland Health Payroll System Commission of Inquiry PO Box 13674 George Street QLD 4003 Telephone 1300 887 081 Fax (07) 3846 6686 Email info @healthpayrollinquiry.qld.gov.au Commissions of Inquiry Act 1950 d. any recommended changes to existing procurement, contract and project management (including governance) policies, processes, COMMISSIONS OF INQUIRY ORDER (NO. 2) 2012 standards and contractual arrangements for major Queensland TABLE OF PROVISIONS government information and communication technology projects Page initiated in the future to ensure the delivery of high quality and cost effective products and systems; and Short title ............................................... 1 e. any other matter relevant to this review. Commencement ..................................... 1 Commission to report Appointment of Commission ............... 1 4. AND directs that the Commissioner make full and faithful report Commission to report ........................... 1 and recommendations on the aforesaid subject matter of inquiry, and Application of Act ................................. 1 transmit the same to the Honourable the Premier by 30 April 2013. Conduct of Inquiry ............................... 1 Application of Act Short title 5. THE provisions of the Commissions of Inquiry Act 1950 shall be applicable for the purposes of this inquiry except for section 19C – 1. This Order in Council may be cited as the Commissions Of Authority to use listening devices. Inquiry Order (No. 2) 2012. Conduct of Inquiry Commencement 6. THE Commissioner may hold public and private hearings in 2. This Order in Council commences on 1 February 2013. such a manner and in such locations as may be necessary and Appointment of Commission convenient. 3. UNDER the provisions of the Commissions of Inquiry Act ENDNOTES 1950 the Governor in Council hereby appoints the Honourable 1. Made by the Governor in Council on 13 December 2012. Richard Chesterman AO RFD QC from 1 February 2013, to make full and careful inquiry, in an open and independent manner, 2. Notifi ed in the Gazette on 14 December 2012. into the implementation of the Queensland Health payroll 3. Not required to be laid before the Legislative Assembly. system with respect to the following matters, and having regard to previous reviews of the Queensland Health payroll system 4. The administering agency is the Department of Justice and implementation, including the KPMG implementation review Attorney-General and the Auditor-General of Queensland’s report titled Information systems governance and control, including the Queensland Health Implementation of Continuity Project (2010): a. the adequacy and integrity of the procurement, contract management, project management, governance and implementation process; b. whether any laws, contractual provisions, codes of conduct or other government standards may have been breached during the procurement and/or implementation process and who may be accountable; c. the contractual arrangements between the State of Queensland and IBM Australia Ltd and why and to what extent the contract price for the Queensland Health payroll system increased over time; Commissioner The Honourable Richard N Chesterman AO RFD QC was admitted to practice as a barrister in 1968, and appointed Queen’s Counsel in December 1983. He worked in private practice as a barrister for over 27 years, during which time he practised in all areas of litigation. He specialised in commercial work and he was widely briefed in areas including banking and finance, insurance, and building and construction. Mr Chesterman was also retained as Senior Counsel assisting a Royal Commission of Inquiry in Tasmania, and appeared in three other major public inquiries, including one as chairman. He was appointed a Justice of the Supreme Court of Queensland in March 1998, and he served as a Judge of the Commercial List of the Supreme Court from 2002 to 2008. He was appointed to the Court of Appeal on 8 December 2008. In 2011 he was made an Officer of the Order of Australia for distinguished service to the judiciary. He retired in April 2012. On 13 December 2012, by Commission of Inquiry Order (No. 2) 2012, Executive Council appointed Mr Chesterman to make a full and careful inquiry, in an open and independent manner, into the implementation of the Queensland Health payroll system. Table of Contents Introduction ................................................................................................................................... 9 1. Procurement .................................................................................................................................15 1. Introduction ............................................................................................................................15 2. Reviews of the SS Initiative .......................................................................................16 Findings of April Review .....................................................................................................................19 Mr Burns’ May Review ........................................................................................................................20 Mr Bradley and Mr Burns ...................................................................................................................25 Findings of Burns’ May Review .......................................................................................................26 Mr Burns and Mr Bloomfield ............................................................................................................27 Mr Burns and Mr Bond ........................................................................................................................33 Mr Burns’ New Engagement ............................................................................................................34 6 3. Request for Information (RFI) .................................................................................36 4. Request for Proposal (RFP) ..........................................................................................37 Why a Prime Contractor? ...................................................................................................................38 Responses to RFP ...................................................................................................................................40 Mr Atzeni’s Preference for IBM .......................................................................................................41 Contact Between Mr Burns and IBM during the RFP ............................................................43 Access to Confidential Information ..............................................................................................45 IBM’s Conduct during the RFP .......................................................................................................46 Email of Cheryl Jensen .......................................................................................................................51 Email of Joseph Sullivan .....................................................................................................................53 Mr Bloomfield’s Bonus ........................................................................................................................56 5. Invitation to Tender (ITO) ...........................................................................................57 LATTICE .....................................................................................................................................................60 Mr Burns’ Role in the Evaluation ....................................................................................................61 Evaluation of ITO ..................................................................................................................................62 Workbrain .................................................................................................................................................62 The Evaluation Changes ....................................................................................................................65 Suitability of Workbrain ......................................................................................................................71 No Probity Advisor ................................................................................................................................74
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