ADHA extracts $1m in service credits from Accenture

The Australian Digital Health Agency has claimed $1.04 million in service credits from Accenture, the outsourced operator of My Health Record infrastructure, since January 2018.

Details of service level agreements for the infrastructure are contained in an audit [pdf] of Accenture’s long-term engagement for “operation, maintenance, support and integration of My Health Record national infrastructure.”

The outsourced arrangement with Accenture started in 2012, with several amendments and extensions putting the value of the deal at $746 million through to the end of 2025 - making it the largest IT supplier contract related to My Health Record provision.

While much of the audit deals with procurement, it reveals that the agency agreed in 2016-17 to pay Accenture for work in advance - instead of in arrears - in return for “reduced charges” and “a service level of 99.9 percent system availability (compared to a previous agreed level of 99.5 percent)”.

“The variation still allowed charges to be invoiced in arrears but with a reversion to the previous service level of 99.5 percent,” the auditor noted.

When the pre-payment arrangement was queried internally in 2023, the justification was again partly predicated on the “higher system reliability” commitment on Accenture’s part.

The federal government auditor again queried the arrangement, noting that “advance payment creates the risk of weaker leverage to enforce performance requirements.”

In response, details of the remedies available for infrastructure service misses on Accenture’s part were revealed.

ADHA has “sole discretion” to claim service credits equivalent to up to “12 percent of monthly support charges”.

There are 23 service level categories - the audit does not list them all - but no more than one-fifth of the service credits claimed can be tied to a single category.

“Since January 2018, ADHA has claimed all applicable service credits for underperformance,” the auditor said.

“Service credits have been claimed on 25 occasions and totalled $1.04 million to December 2023.”

IT architecture documentation dispute

The audit also reveals details of a three-and-a-half-year dispute between ADHA and Accenture over “a request for updated My Health Record system architecture” documentation.

The documentation was meant to “allow other potential suppliers besides Accenture to understand and submit viable responses to an approach to market and to operate the My Health Record system on behalf of the agency”.

Insourcing or a change of outsourced partner was contemplated multiple times.

However, on at least one occasion, this appeared to be thwarted by the lack of updated IT documentation.

Payments to Accenture were withheld over the dispute period; however, Accenture was also awarded a three-year extension through to mid-2025 within the same timeframe, via a “direct source limited tender”.

Such “non-open approaches” to sourcing have long been in the audit crosshairs.

The auditor has called for an open market test of the Accenture agreement before it expires.