Claim Housing NZ will buy 'unneeded' software

A whistleblower has claimed Housing New Zealand may have created a potential conflict of interest for a consulting firm that is providing advice for a $43.6 million information technology project.

The Crown-owned corporation expects to submit a business case for its Enterprise Transformation Programme (ETP) project to ministers later this month.

The whistleblower says that business case recommends Housing New Zealand implements software provided by British firm Northgate and Oracle Financials to replace its existing core software systems, Rental and Finance1, but that Oracle Financials is unnecessary as Housing's Finance1 software could easily be modified to work with Northgate, by modifying its general ledger.

Housing New Zealand picked Deloitte - which implements software from Oracle and rival SAP - as its strategic adviser for the ETP project. A separate consulting company, PricewaterhouseCoopers, was contracted to manage the procurement process, also following a tender.

Housing New Zealand would not say whether Deloitte's contract as strategic adviser precluded the consulting firm from securing any work implementing software that would be purchased as a result of the project.

Computer Society chief executive Paul Matthews says organisations need not preclude consultants that provide them with strategic advice from also having a role in implementing any solution, but it would be unusual and "not particularly good practice".

"It really depends on the circumstances. With most conflict-of- interest situations, if the terms in the conflict of interest are clear and they are open and transparent and all parties are aware of it, then in some circumstances they may not be precluded, but you would expect in a larger project they would be."

Housing New Zealand last month acknowledged a steering group comprised of senior executives had over- ruled a recommendation by an evaluation panel in appointing Deloitte. It said the panel had over- stepped its brief in recommending a rival firm do the job.

Labour housing spokeswoman Moana Mackey had quizzed Housing New Zealand during a select committee meeting about the contracting arrangements, after receiving anonymous correspondence, and called for Housing New Zealand to say more about how it had calculated "astonishing" annual projected savings of $70m from the IT project.

Housing New Zealand corporate services manager Roy Baker said the business case had been checked by Independent Quality Assurance New Zealand and reviewed by KPMG.

Housing New Zealand had spent $6m scoping the project, he said. The whistleblower claims the actual sum spent on consultants since Deloitte was appointed strategic adviser in 2008 exceeds $20m.

Housing New Zealand spokesman Nick Maling says it could not comment on the contents of the business case for the ETP project, or confirm which software providers had been recommended.

Housing New Zealand's board has yet to make a decision about a preferred supplier, he says. "No contracts have been struck and because of this it would be inappropriate to comment."

- © Fairfax NZ News