NEC Australia says it has commenced court proceedings in the Victorian Supreme Court to recover costs and expenses related to a failed $90 million biometric project with the Australian Criminal Intelligence Commission (formerly Crimtrac).
The action relates to the suspension – and later scrapping – of a Biometric Identification Services (BIS) project between NEC Australia and the ACIC.
When InnovationAus.com broke the story of the project’s troubles in June last year, NEC Australia staff in Canberra had been sensationally walked off the project site by ACIC security.
The project was scrapped days later, and was then subject to a scathing Australian National Audit Office (ANAO) report that was released in January.
NEC Australia was awarded a $52 million contract in early 2016 to replace the ACIC’s National Automated Fingerprint Identification System (NAFIS) with a “multi-modal biometric identification” service incorporating fingerprints, footprints and facial recognition.
But the project soon fell behind schedule and over budget, and was ultimately terminated in June last year.
In a statement issues last week, NEC Australia says the “curious decision” to terminate the BIS project in June 2018 was taken at a time when the system was substantially built and ready to undergo systems testing by the ACIC.
The statement says the project had been terminated “for convenience” – a process whereby a party to a contract can terminate, even though the other party is not in breach. The company said it had been trying to recover its costs since June 2018, but had been unsuccessful.
“As a result and after careful deliberation, NEC Australia has decided to take legal action to recoup its costs directly related to the project by commencing legal proceedings in the Supreme Court of Victoria,” the statement said.
Referring to the 56-page ANAO report on the BIS project, NEC Australia noted that the Auditor General had concluded that “the subsequent administration of the BIS project by CrimTrac and ACIC was deficient in almost every significant respect”.
The company also noted a federal Joint Parliamentary Committee on Law Enforcement that had also considered the events surrounding the terminated contract.
In neither report is NEC criticised for its handling of the BIS project.
“NEC Australia maintains it met all terms of its contract and was disappointed and surprised that a decision was taken to terminate at what it deems was beyond the 11th hour in the BIS project,” the company said.
“NEC also notes that the ACIC CEO directed no criticism towards NEC for its expertise in areas such as Biometric project roll-outs.
“NEC fully respects the right of the ACIC and its CEO to terminate a contract for reasons they see fit. Nevertheless a substantial investment in this project was made by NEC and the company is simply seeking to have the investment at the time the contract was terminated for convenience, returned.”
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