Question on Notice regarding claims lodged by Oracle for a whole of government corporate services system. The Treasurer provides details on the claims, costs, and negotiations with Oracle.

AnsweredQoN 1841Legislative Assembly
Asked
20 March 2007
Portfolio
Treasurer

QuestionView source ↗

(a) when were these claims lodged; (b) what was the amount of the individual claims; (c) what were the individual claims for; and (d) what is the current status of the claims?
(b) what was the amount of the individual claims; (c) what were the individual claims for; and (d) what is the current status of the claims?
(c) what were the individual claims for; and (d) what is the current status of the claims?
(d) what is the current status of the claims?
(a) At the conclusion of the design phase in late December 2005, Oracle presented a revised cost claim for the system build consisting of a fixed price and a time and materials component. (b) Following a review, Government approved the system build costing. The fixed price was $5.752 million an increase of $36,000 above the estimate with an additional contingency amount of $3.225 million included. (c) The fixed price of $5.752 million covered the core Oracle system build. The additional contingency amount of $3.225 million provided for the following costs; Activity Estimated Days Estimated Cost $million Development of Reports 186.0 0.260 Configuration Extensions (1) 921.5 1.398 Payroll Fast Formulas (2) 561.0 0.832 Expenses (3) 0.735 Total 3.225 Notes: (1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
(b) Following a review, Government approved the system build costing. The fixed price was $5.752 million an increase of $36,000 above the estimate with an additional contingency amount of $3.225 million included. (c) The fixed price of $5.752 million covered the core Oracle system build. The additional contingency amount of $3.225 million provided for the following costs; Activity Estimated Days Estimated Cost $million Development of Reports 186.0 0.260 Configuration Extensions (1) 921.5 1.398 Payroll Fast Formulas (2) 561.0 0.832 Expenses (3) 0.735 Total 3.225 Notes: (1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
(c) The fixed price of $5.752 million covered the core Oracle system build. The additional contingency amount of $3.225 million provided for the following costs; Activity Estimated Days Estimated Cost $million Development of Reports 186.0 0.260 Configuration Extensions (1) 921.5 1.398 Payroll Fast Formulas (2) 561.0 0.832 Expenses (3) 0.735 Total 3.225 Notes: (1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
Activity Estimated Days Estimated Cost $million Development of Reports 186.0 0.260 Configuration Extensions (1) 921.5 1.398 Payroll Fast Formulas (2) 561.0 0.832 Expenses (3) 0.735 Total 3.225 Notes: (1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
Notes: (1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
Notes: (1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
(1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades. (2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
(2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output. (3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
(3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses. (d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.
(d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.

AnswerView source ↗

Answered
8 May 2007
Response time
49 days
The 10-year contract with Oracle for $66.8 million included the supply and support of software licences and the design, build and implementation of a whole of government corporate services system for the Government. The contract value also included scope for work such as architecture and training services. At the time the contract was signed the design was scoped and costed primarily on a fixed price basis. However, the build phase was costed on a best estimate basis as the design work was still to be completed. Specific clauses were included in the contract documentation to enable the contract to be terminated if the final build cost was not accepted by government.
(a) At the conclusion of the design phase in late December 2005, Oracle presented a revised cost claim for the system build consisting of a fixed price and a time and materials component.
(b) Following a review, Government approved the system build costing. The fixed price was $5.752 million an increase of $36,000 above the estimate with an additional contingency amount of $3.225 million included.
(c) The fixed price of $5.752 million covered the core Oracle system build. The additional contingency amount of $3.225 million provided for the following costs;
Activity
Estimated Days
Estimated Cost
$million
Development of Reports
186.0
0.260
Configuration Extensions
(1)
921.5
1.398
Payroll Fast Formulas
(2)
561.0
0.832
Expenses
(3)
0.735
Total
3.225
Notes:
(1) Configuration Extensions are undertaken to allow the core Oracle business systems functionality to meet the more specific Whole?of?Government requirements within a supportable framework that minimises the ongoing cost of future upgrades.
(2) Payroll Fast Formulas are the means by which award provisions regarding pay and allowances are converted into a total payroll output.
(3) Expenses provided for are those incurred by Oracle in bringing in specialist overseas personnel and include travel, visa processing, transportation, accommodation and living expenses.
(d) At this time, invoices for build work to the value of $6.399 million have been processed and paid to Oracle. The Department of Treasury and Finance has negotiated and reached an agreement with Oracle for a cost sharing arrangement involving eight items, which were subject to negotiation between the two parties. The negotiation resulted in Oracle agreeing to contribute $1.355 million for work associated with the build of the Oracle integrated business solution. This includes an initial estimate by Oracle for the completion of the first 30 payroll common conditions of employment (awards and agreements). A revised estimate for this work is expected to be provided by Oracle in the near future.

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