The government has dumped its beleaguered plan to introduce biometric fingerprint and facial recognition, after its project with a contractor was delayed by months and went $40 million over budget.
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The contract with NEC Australia was suspended on June 4 for negotiations between the Australian Criminal Intelligence Commission and the contractor, before it was terminated today.
It had been reported that NEC Australia staff had been walked off the premises last week before being told that the contract had been suspended.
"This decision was taken in light of project delays," ACIC chief executive Michael Phelan said in a statement on Friday afternoon.
Mr Phelan also confirmed that the Australian National Audit Office has launched an audit into the project. The audit will investigate the procurement processes surrounding the tender of the contract, as well as the agency's oversight of the project.
The contract, initiated in April 2016, was set to replace the national automated fingerprint identification system, as well as adding in facial recognition, palm prints and foot prints. Instead, ACIC had been forced to continually extend the contract on its existing fingerprint database system.
A damning independent report delivered in November last year by consultants PriceWaterhouseCoopers, and seen by Fairfax Media, recommended that the contract be completely overhauled, including reducing the scope of the project. It warned that ending the project would [risk] reputational damage and [limit] future capability".
The project had run more than $40 million over budget and was "challenged on multiple fronts spanning strategic to operational levels," the report said.
"The project has been highly challenged to date, and presents a high risk to the ACIC," PwC said in the November report.
"There is low confidence in likelihood of delivery which requires focus to achieve turnaround."
This is the second government project NEC Australia has had dumped in as many months. Last month the Department of Education and Training ended the contract for the Australian Apprenticeship Management System, due to critical defects.
NEC Australia said it was disappointed that the contract had been cancelled, and defended the company's work.
"NEC is extremely disappointed by the Australian Criminal Intelligence Commission decision to terminate the Biometric Identification Services project. NEC has worked closely with the ACIC to deliver the BIS project and have clearly demonstrated to the ACIC that we already have a high quality solution that will meet their needs," a spokesman said.
The company said the solution was ready to be handed over for testing when the project was placed on hold by the agency.
NEC said the contract wasn't dumped because it had failed to meet expectations, but under a "termination for convenience clause".
"The termination for convenience clause allows government departments and agencies to terminate a contract, regardless of whether or not the contractor has committed a default or breach of that contract."
