Salesforce has defended the cost and value of its technology contribution to the National Disability Insurance Agency’s PACE CRM project, as well as the way it won the work.
The software-as-a-service provider has faced questions in Parliament about the cost – including mark-ups – of its contribution, with Government Services Minister Bill Shorten characterizing it in June as “originally intended as a small project but it kept getting revised. up and not delivering.”
The work was also investigated by the government as part of ongoing investigations into lobbying firm Synergy 360.
Ahead of a committee appearance today, a post [pdf] was published detailing how Salesforce came to secure a role in the PACE project, as well as its relationship with Synergy 360.
PACE is a new Customer Relationship Management (CRM) system based on Salesforce, which will over time replace a SAP-based CRM provided by Services Australia.
Salesforce originally bid for NDIA work with DXC in 2019, but the tender was canceled when the agency accidentally shared confidential pricing data with other bidders.
The work was reissued later that year; Salesforce pitched directly this time with its “standard offer” prices per user per month or year, and won the job in April 2020.
Although Salesforce noted that “the initial total contract value for licenses and services was approximately $27 million,” Salesforce said that license costs blew out, primarily due to a large number of additional users.
Salesforce said it was preparing for 5000 users by April 2020; at the end of October this year, the number of users included was 12,500.
In addition, Salesforce’s involvement predated the existence of PACE—and the evolution of its arrangement into PACE brought new requirements.
The last reported cost of the work was $68 million.
“The key factors driving the change in license costs were the 150 percent growth in NDIA’s user base, along with platform capability additions (to add claims management in addition to customer management) to support the PACE program,” Salesforce said.
Salesforce said it has consistently provided up to 20 architects to the NDIA over the course of its engagement.
It said it was “proud of the results achieved” and that it had received no negative feedback from the agency.
“Salesforce understands that technology design and implementation milestones were met to the NDIA’s satisfaction,” it said.
“The feedback Salesforce has received from the NDIA so far has been that the technology has performed as expected, and therefore the wider rollout was commenced in October 2023.”
Salesforce noted that the NDIA work was secured while it was a client of Synergy 360, a controversial consulting and lobbying firm that worked with technology vendors trying to secure government work.
However, it said “Synergy 360 was not engaged as part of our pursuit of winning the NDIA tender”.
“Our response was a direct pitch from our direct sales and professional services team,” Salesforce said.
“Synergy 360 was not paid any fees in relation to winning the NDIA contract.”
Salesforce said it had engaged Synergy 360 at a time when its government and public sector capabilities were in start-up mode in Australia and it decided it could use external support.
The agreement was concluded in June 2021.