Brisbane council demands $50 million from TechnologyOne

Fallout from terminated IT systems replacement contract

Brisbane City Council has served TechnologyOne with what the company described as an “ambit claim” for loss damages in excess of $50 million.

The claim for damages comes after the council on Friday announced it had terminated its IT systems replacement contract with the ASX-listed software vendor.

TechnologyOne has indicated it will seek $50+ million in damages from the council.

The dispute relates to a June 2015 BCC contract won by TechnologyOne. BCC has accused the TechnologyOne of breach of contract and unacceptable delays, and said that it suffered “a complete loss of faith in the company’s ability to deliver a replacement system for Council's IT systems”.

TechnologyOne has pinned responsibility for delays on decisions by the council and a blow-out in project scope.

“TechnologyOne remains confident of its legal position,” the company said in a statement.

The company has comprehensive insurance cover for all its projects, it added.

“TechnologyOne does not expect an impact on its full year guidance of profit growth of 10% to 15%,” the company said.

TechnologyOne today announced that it had exceeded targets for sales of its software as a service offering.

The company’s SaaS business has almost doubled in size over the last year, it said. It cited customer wins including the University of Sussex in the UK, the Inner West Council in Sydney and a central government agency in New Zealand.

“Our strong growth is expected to continue; we estimate our annual contract revenue to increase by more than 90 per cent over the year with many existing customers migrating their solutions to our cloud,” said TechnologyOne CEO Edward Chung.

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