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Project

Mandate
The totally integrated solution proposed to the Government by Andersen/Accenture in association with HRD-NB covered:

  • Project management;
  • A definition of work methods;
  • The design of applications;
  • The development and introduction of services;
  • The acquisition of hardware, software, a network and installation services;
  • Change management and training services;
  • Ongoing support, system maintenance and operation.


Initially, Andersen/Accenture believed they could carry out the project within two years and the project timetable was based on this assessment. The performance-based contract signed by the partners after 14 months of cooperation was unique: the private partner, Andersen/Accenture, agreed to finance the entire cost of the project ($15.5 million) and financial expenses ($5.5 million) for a total of $21 million. The conditions stipulated that the firm’s fees (a fixed base price) would only be paid when the savings targeted by the project were achieved ($85 million). The project costs would be repaid over five years, with the firm’s fees deducted from the savings from lower general administrative expenses, the prevention of over-payments, a reduction in the number of eligible applicants, and an increase in the amounts recovered. The firm would only be unconditionally reimbursed for the costs of the computer hardware and software required for the project. The firm faced a serious risk of not earning a profit. Andersen/Accenture normally relies on the earnings generated directly by a project rather than on the probability of longer-term profits. In the event of success, Andersen/Accenture would reap a $16.5-million profit; otherwise, its loss could reach that amount.