Prohibitive penalty clauses may be behind the decision of Land Information New Zealand (LINZ) to cancel its tender process for selecting technology for its automated survey and title system project.
The tender was issued in February, but a letter to tenderers, dated May 26, says thanks but no thanks.
In April, LINZ confirmed that an Informix-led consortium was its preferred supplier for the technology. The consortium includes Eagle Technology, supplying an ESRI datablade for GIS, and Wang supplying imaging to digitise the paper-based system.
No contracts have been signed.
The project is known as Landonline.
LINZ programme manager Terry Jackson says in a statement that LINZ is happy with the technology proposed by the Informix consortium but that some of the business aspects of the proposal are unacceptable.
"LINZ and the Crown were exposed to unacceptable risks because of the possibility of interoperability between the different systems."
The department's communication manager, Ian MacLean, earlier told Computerworld that LINZ was not able to get assurance on integration and warranty.
For warranty, read no vendor is prepared to accept the penalty provisions.
"No one would buy into Linz's terms and conditions for systems integration," says one source. "The penalty is something like $10,000 a day."
"We can't comment on those details," says MacLean.
However, he says LINZ would otherwise have had to take the risk.
No one other than the principals know how much the project is worth. Some say $20 million, others $70-120 million. Computerworld proposed the larger spread to MacLean.
"We'd be happy if you quoted the lower figure," he says.
Last Wednesday, LINZ, through project manager Price Waterhouse, was to issue a request for proposal for the facilities management of Landonline. What's changed since the original plans is that systems integration will also be placed with the successful bidder. It's understood the three candidates are Fujitsu, EDS and Wang.
Price Waterhouse is doing the development for the project.
"We want to include integration and warranties with the FM tender," MacLean says.
Jackson says in his press release: "The project is proceeding with the preferred technology but we are seeking to resolve these business aspects through the facilities management tender."
He says cancelling the tender process has no impact on LINZ's ability to proceed with the project.
"The project is currently proceeding to the agreed timetable."
Benefits of a successful project are perceived as lower fees, lower staff costs, reduced bridging finance costs and reduced costs to the taxpayer.
There will have to be a legislative change - scheduled for January 1999 - to allow storage of electronic records, and again in 2001 to allow digital lodgement of survey and titles transactions, under the plan.
Routine paperless digital lodgement of survey and titles transactions will begin in 2001.