IRD snubs big boys for IT contract

Inland Revenue has snubbed software giants Oracle and SAP and picked relatively small United States firm Fast Enterprises to provide the software for the bulk of its billion-dollar-plus Business Transformation project.

Fast Enterprises, which employs 700 people and is based in Colorado, was set up by consul- tants who helped build Inland Revenue’s existing mainframe-based First computer system, which its software will now replace.

Inland Revenue deputy commissioner Greg James said the contract with Colorado-based Fast would be worth significantly less than $93 million, which is the outstanding sum the department has currently received Cabinet clearance to spend, on top of the $100m it has spent on the transformation project so far.

The contract would cover software that Fast would supply in the period up to March, James said. ‘‘Activity beyond that will be subject to Cabinet sign-off.’’

The overall budget for the Business Transformation project is expected to come in at about $1.3 billion.

James said much of that would be consumed by the costs involved in transforming the department from a ‘‘people and organisational design perspective’’ rather than by information technology.

Fast co-founder Dave Pearson had previously expressed concern the company might be excluded from the project even though he said it had ‘‘the best product, the most industry experience and the most First experience’’.

That was because it did not meet the criteria to compete for an earlier piece of consulting work that was awarded to multinational consultancy Accenture.

James said Fast subsequently recognised that particular contract, for ‘‘high-level design’’, was not its core knitting.

Pearson told Stuff in 2013 that the project to replace First mirrored a similar job the com- pany had undertaken to replace Finland’s tax system at a cost of €226 million (NZ$356m). That price included 15 years’ support costs. Fast had led 25 tax-modernisation projects around the world since four of its six founders’ were involved in designing First in the early 1990s, he said at the time.

James said Fast would supply a ‘‘fully-integrated’’ system rather than it having to build one from the ground-up. First has generally been perceived as a stable system that has lived on beyond its bestbefore date. But James said Fast’s experience building it had not been a factor in the selection process.

He expected the contract with Fast would be formalised in two or three weeks. Fast had been selected after an ‘‘exhaustive evaluation process’’, he said.