Published on the 02/12/2025 | Written by Heather Wright

“Not a blacklist”…

After a string of costly IT blowouts, Australia’s Digital Transformation Agency is planning to crack down with a proposed ‘underperformance register’ which will track vendors who fail to deliver on major projects.

The register is touted as part of the Digital Seller Underperformance Policy (DSUP) and comes as governments pursue ambitious digital goals, such as Service NSW’s long-awaited rollout of digital birth certificates, while grappling with the reality of major cost over runs and delays many large projects.

The proposed register will record technology providers who have ‘confirmed serious underperformance’ on government contracts valued at $4 million or more or deemed to be ‘strategic’ digital contracts. According to the draft policy, sellers will retain a ‘confirmed serious underperformance’ status on the register for at least one year, with a searchable history retained for five years.

“The policy aims to strengthen transparency and improve procurement outcomes,” the DTA states in its consultation paper. “It is not intended to punish sellers or act as a blacklist.”

The US has a similar system, CPARS (contractor performance assessment reporting system), to record contractor performance for contracts exceeding a certain threshold. The data is used in source selection evaluations and are regarded as key for ensuring the government ‘only does business with companies that provide quality products and services’.

Stormy weather for BoM – and plenty of others

The DTA’s move follows repeated scrutiny of government technology projects plagued by delays, cost overruns and governance failures, some of which have drawn criticism over vendor performance and procurement practices.

This week has seen the Bureau of Meteorology facing criticism in Senate estimates hearings for allegedly succumbing to a consultancy firm’s ‘land and expand’ tactics. The BoM’s new chief executive Stuart Minchin – just one month into the job – has faced a grilling over the Bureau’s website $96.5 million redesign, as part of a broader $866 million Robust program to upgrade security and technology.

The website has been widely panned as difficult to navigate, with radar maps hard to read and the site lacking the ability to enter GPS coordinates to find forecasts for specific locations. The hashtag #changeitback went viral after the Bom changes.

The cost of the project has also raised eyebrows. A BoM spokesperson initially said the new website cost $4.1 million, while the value of the contract was estimated at $31 million in 2019 when the tender was published.

Federal environment minister Murray Watt noted during Senate estimates that the BoM case ‘may well be a contract that demonstrates the need for greater oversight and greater use of public sector capacity wherever possible’

And last week the NSW Audit Office noted that the $969 million Single Digital Patient Record – one of the NSW Government’s largest technology initiatives – is at risk of cost overruns, though in this case largely due to planning and governance shortcomings including underestimating the complexity and expense of integrating the Epic Systems platform with legacy hospital systems and cost estimates that were not backed with sufficient evidence.

IBM’s payroll implementation for Queensland Health remains one of Australia’s most notorious IT failures. Originally budgeted at $6.9 million, the project ended up costing $1.2 billion and went live with severe flaws that left thousands of staff underpaid or unpaid, with problems continuing more than two years after the project went live. Go-live date was two year after the initial planned live date.

Auditor-general reports cited both vendor performance and weak contract governance as key contributors.

The National Disability Insurance Agency’s Pace CRM platform, based on Salesforce, also saw costs blow out from $27 million to $170 million. A parliamentary inquiry panned the NDIA’s procurement practices, including more than 100 instances where agency officials received gifts and hospitality from Salesforce without disclosure. The Joint Committee of Public Accounts and Audit final report also noted significant contract variations with significant changes in scope and no opportunity for other vendors to tender as variations in scope occurred after the contract was awarded. More than $20m was also added to the contract for ‘professional services’.

Across jurisdictions, cost overruns and governance failures remain all too common. The Western Australia Office of the Auditor General’s 2025 Transparency report into major IT projects found the estimated total cost of the 10 projects it reviewed was at least $1.6 billion more than the $2.6 billion initially forecast, with further increases expected.

The review included projects, including relating to the SmartRider reusable transport card, electronic health records and the firearms licensing and registry system, from five State government entities.

While one project accounted for the majority of the overspend, half of the projects reviewed had had their estimated cost at least double, and only two were expected to be delivered within their planned cost.

Time-frame blowouts were also rife, with eight out of the 10 projects being delivered later than originally planned, with delays ranging from four months to 6.5 years.

Register to impress

While governance failures often play a role, vendor accountability is increasingly under the spotlight.

The DTA says its proposed Digital Seller Underperformance Policy is designed to enable fair and transparent management of seller underperformance information and drive improved digital project outcomes across government, while providing ‘incentives’ for digital buyers and sellers to work together to resolve delivery challenges and achieve successful outcomes.

“The proposed policy strives to strengthen transparency and support more consistent information-sharing across government, not act as an exclusion mechanism,” says Chris Fechner, DTA chief executive, who notes the DSUP won’t preclude buyers from engaging with sellers on the register.

The draft policy outlines a range of underperformance issues that could result in a seller finding themselves on the register, including failure to meet contractual requirements, schedules or agreed performance standards or deliver within the contracted budget. Failure to meet security obligations, resolve contract performance issues or provide properly qualified staff – or the required number of staff – are also among the issues which could see a technology provider appear on the list.

Instances of minor underperformance across multiple agencies could also be aggregated and included on the list.

Sellers will have a right of reply and the register would be a secure, internal-to-government one, accessible only by authorised government buyers.

Consultation on the proposed DSUP is open until 21 December, with DSUP expected to be officially released and take effect in early 2026.