Rt Hon Sir William Birch
Minister of Revenue

9 August 1999

For Immediate Release

Birch Announces IBM Repudiation Today of INCIS Contract

IBM has advised the Crown today that it will not honour its contract obligations to complete Increments Two and Three of INCIS, the Minister of Finance, Rt Hon Sir William Birch, said this afternoon.

Mr Birch said the Crown, responding to that situation, is already commissioning an immediate fully updated review of Police computer requirements, to ensure that law enforcement gets the world-class information technology it needs.

"IBM's letter advised that, as of midday today, they will cease all development on Increments 2 and 3 of INCIS. The Government is extremely disappointed. This is a very serious development in the INCIS situation," he said

"The Crown has, in response, advised the company that its letter is a clear repudiation of IBM's contract with the Crown. We have told them the Crown reserves its rights as to whether we will terminate the contract on this basis.

"Clearly, there will need to be further discussions with IBM," Sir William said.

"The Crown has been aware since early May this year that IBM no longer wanted to honour its contract obligations for the delivery of Increments Two and Three of INCIS, if they could find a way to avoid doing so," he said.

"The Crown has taken the view throughout that a valid contract for that work existed with IBM, and the company should honour it. We have been since May in continuous discussion with IBM seeking to achieve that outcome.

"The Crown in those discussions explored every reasonable avenue to seek delivery of what IBM had contracted. We have shown very considerable flexibility in trying to find a solution that would be acceptable to both parties.

"In the event, instead of delivering Increments 2 & 3, IBM has opted unilaterally to develop a different alternative which fails to offer either the scope or functionality required to meet the objectives set by contract.

"Fortunately, Increment One of INCIS is in place, along with a new technology platform, and will support current Police operations in the future.

"It has usefully extended previous Police computer functionality. It is performing adequately, and IBM will honour their present maintenance agreement for it.

"The determination of the Crown to ensure that Police get world class information technology remains unaltered.

"The Crown will urgently establish a new working group on future Police information technology. That group will be able to get on with its important task," he said.

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