Legal Battle Looms Over Failed Implementation of €33.9 Million ERP Project
Insights Into the Cancellation of a Major Government ERP Contract
The unsuccessful implementation of the Enterprise Resource Planning (ERP) system at the Treasury of the Republic, a project valued at €33,962,036, appears destined for legal proceedings. The contract for this system, signed in November 2018, was terminated in March 2023 by the contracting authority due to the contractor's failure to fulfill their obligations.
This intention of the Republic was expressed during yesterday's (18/1) discussion of the Special Report by the Auditor General, Odysseas Michaelides, on the ERP at the Parliamentary Audit Committee.
Specifically, at the start of the discussion, the Committee Chairman, Zacharias Koulias, noted that he received information from the Legal Service that lawsuits concerning this matter are being initiated.
The representative of the Legal Service stated, “The Audit Service's report relates to a public contract with substantial financial claims from both sides, which are likely to end up in court.”
Therefore, she added, “The Legal Service believes that both the publication of this report and further discussion on the matter could jeopardize the interests of the Republic.”
“It is the plea of the Attorney General that, with all due respect to the Committee's work, further discussion should be avoided to prevent additional harm to the Republic's interests,” the Chairman of the Audit Committee further urged all attendees to conduct the discussion within the framework and briefly report the findings and positions of the services.
Respecting the position of the Legal Service, the representative of the Audit Service referred to the main conclusions of the Auditor General's Report, while also mentioning key dates related to the competition, the awarding, the signing of the contract, and its eventual cancellation for the Information System, noting that the Audit Service was informed by the Treasury about proceeding with a lawsuit against the contractor company.
The representative of the Legal Service clarified that no lawsuit is currently pending, but it is in the registration stage. “No lawsuit is pending at the moment. There are processes, and we follow the pre-trial protocols,” she emphasized.
Subsequently, the General Accountant of the Republic, Andreas Antoniades, praised the Audit Service for its work and results, which are taken seriously for lessons and future actions. He mentioned that the contractor has been denounced to the Exclusion Committee. “Our goal is not only to exclude [the contractor] from national procedures but also from European Union processes,” he explained.
He emphasized, “Our aim has always been the efficient management of state resources, and therefore this project was a significant strategic goal for the Treasury of the Republic. The project was of great importance to the state as it would have modernized processes, enhanced financial management, and replaced outdated systems.”
According to Mr. Antoniades, during the legal proceedings against the contractor company, “we will focus on the benefits we lost due to this delay,” and clarified that “procedures were followed as prescribed by law, both during the contract signing process and in the implementation and management of the contract.”