SSC review after $8m IT payouts

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The State Services Commission has begun an internal review, and is considering ordering an independent inquiry, into its handling of contracts with a privately owned consulting firm that has been paid more than $8million.

The company, Voco, was responsible for carrying out work on the Government Shared Network, a $28million telecommunications network linking government agencies, which has been largely shunned and faces the axe.

A whistleblower has alleged that Voco was paid too much for its contracts and that they were extended about nine times without being put back out to tender.

State Services Commissioner Iain Rennie announced the possibility of an independent inquiry on Friday, after The Dominion Post told the commission it was intending to publish allegations today about the management of the GSN project.

The whistleblower said that David Eagles, finance manager of the commission's ICT branch, tried to end the department's relationship with Voco on four occasions, but was prevented from doing so by the commission.

Mr Eagles could not be contacted last week. Sources said he was on sick leave after an assault at the State Services Commission.

Mr Rennie said he became concerned about the performance of the GSN earlier this year, and in August asked PricewaterhouseCoopers to look at future options for the network.

"I have also begun an internal review of both contractual and performance issues around the management of Voco contracts for the GSN," he said.

"I expect that process to be completed before Christmas. Once I am in possession of all the facts, I will be able to make decisions about the appropriate responses for individual staff and for the SSC, including whether any further independent inquiry is required."

The commission said it had paid Voco $8.2 million since 2004 under a series of contracts, including payments that are still to be made under a contract that expires in February.

Voco co-owner and director Michael Foley said he believed Voco had delivered value for money to the commission.

A telecommunications industry executive The Dominion Post spoke to considered the closeness of the relationship between Voco and the commission was inadvisable. "Consultants make their money by billing for time and materials ... Customers want prompt delivery and they want to get what they ask for."

- © Fairfax NZ News