Salesforce defends NDIA CRM work after cost questions

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 vendor has faced questions in parliament over the cost - including upward revisions - of its contribution, with government services minister Bill Shorten characterising it in June as “initially intended as a small project, but it kept getting revised upwards and not delivering.”

The work was also probed by the government as part of ongoing investigations into lobbying firm Synergy 360.

Ahead of a committee appearance today, a submission [pdf] was published detailing how Salesforce came to secure a role in the PACE project, as well as its dealings with Synergy 360.

PACE is a new customer relationship management (CRM) system based on Salesforce, which over time will replace a SAP-based CRM supplied by Services Australia.

Salesforce initially tendered for NDIA work with DXC in 2019, but the tender was cancelled when the agency accidentally shared confidential price data with other bidders.

The work was re-tendered later that year; Salesforce pitched directly this time, with its “standard offering” pricing of per user per month or year, and won the work in April 2020.

While noting the “initial total contract value for licences and services was approximately $27 million”, Salesforce said licensing costs blew out, primarily because of a huge number of additional users.

Salesforce said it prepared for 5000 users in April 2020; by the end of October this year, the number of users factored in was 12,500.

In addition, Salesforce’s engagement pre-dated the existence of PACE - and the evolution of its arrangement into PACE brought new requirements.

The last reported costing for the work was $68 million.

“The major factors that led to the change in the licence costings were the 150 percent growth in the NDIA’s user numbers 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 supplied up to 20 architects to NDIA over the course of its engagement.

It said it took “pride in the outcomes achieved” and that it had not received negative feedback from the agency.

“Salesforce understands that technology design and implementation milestones were met to the satisfaction of the NDIA,” it said.

“The feedback Salesforce has received from the NDIA so far has been that the technology has performed as expected and, consequently, the broader 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 tech vendors trying to secure government work.

However, it said that “Synergy 360 was not engaged as a part of our pursuit in winning the NDIA tender”.

“Our response was a direct bid with 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 startup mode in Australia, and it determined it could use outside support.

The agreement was concluded in June 2021.