IRD cries foul on Telecom costs

Inland Revenue is disputing the pricing of its telecommunications services with Telecom, and it's understood legal action has been contemplated.

Inland Revenue is disputing the pricing of its telecommunications services with Telecom, and Computerworld understands that legal action has been contemplated.

The department, however, while acknowledging there is a difference of opinion as to how the price being charged to it aligns with the prevailing market rate, says it is “following standard protocols” in order to resolve the conflict.

IRD works under an arrangement involving a complex pattern of multiple discounts. According to its contract with IRD, Telecom undertakes that it will not charge less to any other customer for a similar bundle of services.

A consultant who surveys and attempts to minimise the telecommunications costs of businesses apparently told IRD recently that it was not, in fact, getting the best possible deal.

In reply to Computerworld's questions, IRD issued a brief statement from its general manager business development and systems, Colin MacDonald, last week: “Within the terms of our contract with Telecom there is the provision for us to assess current market pricing. In relation to that we have not yet been able to reach agreement as to how those market changes would flow into our pricing.

“We are following standard protocols in order to resolve this.”

Telecom spokesman Andrew Bristol confirms that "there is an issue relating to a clause in the contract", and that the clause in question, "in layman's terms", guarantees that Telecom will not offer similar services to another customer at a lower price. But "there is discusssion about the interpretation of the clause".

Telecom declines to show Computerworld a copy of the disputed clause in its precise wording, citing commercial confidentiality. IRD also refuses to discuss detail of the contract, for the same reason, or to comment on the suggestion that it is contemplating legal action.

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