IBM paid 'very substantial' compensation for Census failure

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IBM paid 'very substantial' compensation for Census failure
Malcolm Turnbull

PM insists settlement covers govt's costs.

Prime Minister Malcolm Turnbull has confirmed IBM made a “very substantial financial settlement” with the Commonwealth as compensation for the failure of the 2016 online Census.

He said the precise terms of the compensation agreement were confidential, but told 3AW radio it “absolutely” covers the extra costs incurred by the federal government to restore the August 9 Census.

The Australian Bureau of Statistics previously put the cost of the saga at $30 million over and above what it expected to spend.

Striving to reassure taxpayers that they wouldn’t be left out of pocket, Turnbull said IBM had "paid up many millions of dollars” ... “it is confidential but it is a lot of money”.

“Overwhelmingly the failure was IBM’s, they’ve acknowledged that, they’ve paid up, they’ve accepted the blame. And they should have,” he said.

He also claimed there had been "a lot of personnel changes at IBM as a consequence, so I suppose heads have rolled there”.

However, IBM's ANZ boss Kerry Purcell told a senate committee in October that no IBM staff had been dismissed or taken through disciplinary proceedings "directly related to the Census".

IBM today confirmed this situation has not changed.

The government published the Census post-mortem authored by Turnbull’s cyber security adviser Alastair MacGibbon last night.

MacGibbon pulled no punches, criticising the “cosy” relationship that had formed between the ABS and IBM, which he said could have led to some complacency on the contractor’s part.

Big Blue was slammed for failing to check up on its downstream providers to ensure geoblocking was properly implemented as a key DDoS defence for its online Census solution.

Turnbull called the small-scale attacks that ultimately brought down the national e-form “utterly predictable [and] utterly foreseeable”.

Questioned about whether IBM would ever win another contract with the federal government, he said all Commonwealth tenders would still go through the same assessment and probity processes.

“But everyone’s performance and track record are all taken into account when they are assessed," Turnbull said.

He sought to reassure Australians that lessons on the government's part would be "very carefully learned” following MacGibbon's review.

“The important thing is to make sure ... the Australian people get a better service from the government in terms of managing these government contracts," Turnbull said.

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