Tech company takes ACIC to court over cancelled project

By Shannon Jenkins

July 22, 2019

Source: Getty Images

NEC Australia (NECA) will take legal action against the Australian Criminal Intelligence Commission after the latter terminated a project in June last year.

The company was chosen by CrimTrac — one of ACIC’s predecessor agencies — in 2016, to deliver the Biometric Identification Services (BIS) project for Australia’s police agencies.

The $52 million project aimed to upgrade the agencies’ biometrics capabilities from a fingerprint-only to a multi-modal finger, facial and fusion solution.

When the system was ready for testing, “ACIC took the curious decision to terminate the BIS project” which left NECA “disappointed and surprised”, according to a statement from the company.

“NEC has a proud history of developing and delivering biometrics projects all over the world, much of it for governments, and NECA was excited about the prospect of delivering a new biometrics project for Australians,” it said.

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The project was cancelled “for convenience” — a process which allows a contract to be cancelled even if there has not been a breach.

After failing to recover funds and “careful deliberation”, NECA is seeking to recoup costs “directly related to the project” in the Supreme Court of Victoria.

The statement said relevant authorities did not criticise NECA for its handling of the project.

A report from the Australian National Audit Office (ANAO) earlier this year concluded that ACIC did not effectively manage the project.

“While CrimTrac’s management of the BIS procurement process was largely effective, the subsequent administration of the BIS project by CrimTrac and ACIC was deficient in almost every significant respect,” the report said.

“The total expenditure on the project was $34 million. None of the project’s milestones or deliverables were met.”

The federal government’s Joint Parliamentary Committee on Law Enforcement also looked at the nature of the termination.

“The committee is concerned about the management and subsequent cancellation of the BIS project,” the committee said in its annual report.

“On a positive note, the committee acknowledges the proactive effort by the ACIC to review and learn from the BIS project, including ACIC’s request for ANAO to conduct the performance audit.”

The company maintains ACIC’s CEO “directed no criticism” towards its role in the project and says it respects the right of ACIC “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,” the statement said.

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