Control Data Australia Memories compiled by Brian Membrey

TAB cancels CRISP

(The Age, Tuesday, 4 April, 1978, page 1)

"The Victorian TAB has cancelled its $26 million CRISP computer project”.

"The announcement yesterday ended months of speculation on the future of CRISP which was planned to revolutionalize the TAB’s betting operations.

"The TAB claimed Control Data Australia Pty. Ltd. failed to live up to the contract obligations regarding CRISP.   TAB Chairman Mr. Hilton Nicholas said it was now the Board’s intentions to obtain an alternative computer system as soon as possible.

"The cancellation of CRISP means the TAB already-overworked computer system known as RIMFIRE will have to carry the load for at least another two years.

"It will take that long for any new system to be introduced even if one was available immediately"  (more by Tony Bourke, page 34).

(ED : Page  34 was the back page and the leading Sports Age article, Tony Bourke their senior racing writer)

TAB’S NO to CRISP $26 Million (by Tony Bourke)

(The Age, Tuesday, 4 April, 1978, page 34)

"The Victorian TAB has cancelled its $26 million CRISP computer project.

"The announcement yesterday ended months of speculation on the future of CRISP which was supposed to revolutionalise the TAB’s betting operations.

"In a brief statement at 4.00 p.m. yesterday, TAB Chairman Mr. Hilton Nicholas announced that in the Board’s view, Control Data had failed to fulfil its obligations in accordance with the contract.

"Mr Nicholas said it was the Board’s intention to seek an alternative computer system as soon as possible.

"The TAB statement added that acting on legal advice, no further details would be released at the present time.

"It is believed that the TAB has paid about $8 million to Control Data under the written contract for the CRISP project.  What percentage of these payments, if any, is recoverable may be subject to legal action.

"Racing administrators are believed to be happy with the Board's decision, although concerned about the money already spent and the time wasted on the CRISP project.   Moonee Valley Chief Executive Ian McEwan said he believed that the future profitability of the racing industry was at stake.

"A spokesman for Control Data Australia Pty Ltd said last night that the company had no comment to make the cancellation of the CRISP project.

"Control Data has supplied the Victorian TAB with computer systems since automated betting came in 1967.  The first system known as CARBINE was superseded by the present RIMFIRE system in April, 1971.

"In May, 1974, the TAB announced the introduction of CRISP to eventually replace RIMFIRE.

"The CRISP system was named after the great steeplechaser owned by the TAB's first Chairman, Sir Chester Manifold. The initials also stand for Comprehensive Racing Investment System for the Public.

"When it was announced at a cost "upward" of $8 million, CRISP was to be introduced progressively from 1976 with the state fully equipped with the new equipment by 1980.

"In 1976, the starting date for CRISP was put back to May, 1977 and then to the spring of 1977.  

"Officials said it was previously thought the RIMFIRE system would be able to handle most TAB needs in the foreseeable future.   The TAB said at the time "however the immense advances made in computer technology and the huge growth of the TAB has made essential the introduction of a more sophisticated system".

"The CRISP system was to nearly double the capacity of the telephone betting operation which even then was over-loaded at peak times.

"The Victorian TAB was acknowledged as the leader in computerized betting in Australia, if not the world, but now almost every other state has a more sophisticated off-course system and the Victorian TAB is faced with the certainty of falling even further behind".




"The State Government should order an inquiry into the Victorian TAB.

"For too long, the Government has enjoyed reaping the benefit from the giant money-maker while ignoring the problems that have arisen over the years.

"The cancellation of the CRISP project is the latest example of mismanagement by what is a semi-Government body.

"When it was announced in 1974, CRISP was going to cost “upwards” of $8 million, but the latest estimate came to $26 million, an increase of over 300 per cent in less than four years.

"The starting date, originally September, 1976 was continually put back, the latest to the spring of 1977, but the system was found to be unworkable.

"In the meantime, the TAB spent $11 million in building improvements to house the new computer system and the expanded telephone betting facilities.   The new building, originally to cost $6 million was opposed by the race clubs which the Government approved to set up the TAB.

"The Government should be asking the TAB on behalf of the racing industry and the public in general why outside tenders were not called for when it became obvious that the previous RIMFIRE system, also supplied by Control Data couldn’t  fulfil the TAB’s needs.

"And was an outside consultant brought in to evaluate the situation when it became obvious that CRISP also had its problems?

"The racing industry was relieved when the Board decided to cancel CRISP even though it remains the TAB will be saddled with the presently outmoded system for at least another two years.

"At least it meant that a faulty, money-devouring CRISP could be led to an early retirement, but it will be touch-and-go whether the ageing RIMFIRE system can carry the extra weight and see out the distance"

Following Tony Bourke's pieces, another unaccredited paragraph suggested CRISP "was in doubt some two years earlier".

The following day, the Minister for Youth, Sports and Recreation, Mr Brian Dixon suggested that he expected that the TAB to recover most of the $8.6 million paid to Control Data "although I am unable to elaborate for legal reasons on the reasons for the cancellation".

"After being given every opportunity to comply with the original specification, including extensions of time, the Board's view was that Control Data Australia had failed to fulfil its obligations in accordance with the contract".

He went on to explain that tenders had not been invited because of a joint recommendation by Control Data and the TAB based on the use of Control Data equipment and the Government would not initiate an inquiry until it received and considered a separate report already being prepared by the racing industry in general, expected at the end of the month.

The reaction of the computer industry to the cancellation is difficult to assess from the material publicly available (microfilm of The Australian is now held off-line at the State Library, Computer Weekly has never been digitized).


The Political Fallout

The political ramifications were much the predictable push-and-shove, but turned personal around eight days later when the Opposition Minister for Sport, Youth and Recreation, Neil Tresize accused Dixon of orchestrating a "Dorothy Dix" question from a Government back-bencher which had revealed that the TAB's General Manager Jack Rutter was being paid an annual salary of $44,000 and that he was entitled to a lump-sum payout of $22,000 when he retired.

Tresize claimed Dixon was trying to set-up Rutter as a scapegoat for the failure of the Crisp project and that Dixon himself should take responsibility "for the fiasco".

Dixon denied the accusation, claiming he accepted Ministerial responsibility and had provided the information on the General Manager's salary and superannuation "to protect Mr. Rutter's position as there was a malicious rumour in this town that Mr Rutter would receive $1 million when he retired".

Dixon confirmed the TAB Board's intention to pursue the recovery of the $8.6 million paid to Control Data Australia and that representatives from the parent company had flown to Australia for talks with the TAB on the cancellation of the project.  He also caused further uproar when the following day he tabled a letter from the Attorney General saying that the litigation was viable and therefore none of the contractual details should be released.

He also accused the Opposition of wanting "to put abroad a furphy " that Control Data did not have sufficient reserves to pay back the $8.6 million – "Control Data Australia was guaranteed by its American parent company which had reserves of $1300 million".

Dixon survived the political fall-out and despite a swing against the conservatives narrowly won the seat of St. Kilda in 1979 to give the Liberal Party a one-seat overall majority and sufficient members to govern without Country Party support.  

He lost the seat in 1982 when the Liberals were defeated after 27 years in power and shortly afterwards became one of the early General Managers of the Sydney Swans.  Tresize took over the Youth, Sport and Recreation portfolio and held it under John Cain and Joan Kirner until Labor was overthrown by B in 1992.


On The Field

 As well as political opponents, Dixon and Tresize had previously been rivals for several years on the footy field – Dixon a champion wingman over 252 games between 1954 and 1968 with Melbourne, Tresize 185 games as a rover and later back pocket between 1949 and 1959 with Geelong.


Was there ever a payout by CDC following the cancellation?

I know John O’Neil and Hilton Nicholas flew to Minneapolis for high-level discussions with Bob Price who had responsibility for the Pan-Pacific region, but have no idea as to what the outcome might have been.

I was told a couple of years later - unofficially, but from reasonably reliable source - that the answer was NO because of the extensive input of TAB staff to the original design and the choice of what proved under-powered equipment meant that any chance of their recovery of damages via legal processes would be limited.

It was also revealed in Parliament after the cancellation that VicTAB had been unable to call in outside consultants to assess the ongoing viability of CRISP because “the terms of contract prevented access to the documentation as the documents were copyright to the computer company”.  

This, however, is in contrast to a statement two days after the cancellation that revealed an unnamed consultant had been hired to investigate a new design which the TAB claimed would be ready within twelve months - the mention of a consultant and a new system just 48 hours after the announcement makes one wonder whether the decision to drop CRISP had been made some time beforehand.

There was certainly an action launched by VicTAB for the recovery of $1 million, plus unspecified damages; CDC-CDA responded with a counter claim that the TAB had no right to cancel the contact and claimed a lazy $13.3 million as a result (Canberra Times 11 May, 1978)

Again, whether money ever changed hands or the legal profession as usual simply lined their pockets remains unknown, but what is documented is that VicTAB retained the terminal equipment (probably with little option given the time taken in developing the interfaces) and CD retained the under-performing System 17s.  

The acceptance of the terminals by VicTab was in fact a major plus for Control Data - while some use may have been found for the System 17s (other than as boat anchors), the terminals were a design unique to the Australian wagering projects and would have become a multi-million dollar write-off as scrap if not taken by the TAB as part of the settlement.

But the sobering counter-argument is, of course, that any compensation paid out by Control Data would have been subject to a high level of confidentiality and probably only known at the highest management level of both organizations and withheld from press sources.

Maybe someone up there knows, but I’m not holding my breath on any further update!

Perhaps it may also help to clarify some of the figures that were being bandied about, both by reporters and politicians - the $8 million was the original CRISP contract which allowed for $600,000 in damages for non-completion.  Several of the commentators chose to add to this the costs associated with the construction of the TAB’s new building behind the existing structure, part of which was to accommodate a new telephone betting auditorium, estimated at something over $12 million.  Dixon in response to a question supposedly “without notice” from a Liberal back-bencher as the occupancy of the building caused further uproar when he immediately quoted six tenants, their floor space to the exact square foot and percentage of total occupancy to two decimal places!  (Around 97% in toto).


Political Reality

The question “without notice” on the occupancy of the new building came from Bruce Skeggs, the Liberal member for Ivanhoe - as well as being an M.P., he was a former race-caller, primarily of harness racing and was still the publisher of a trotting magazine and form guide.  The original question was undoubtedly connived between the pair, but Skeggs later made a long statement to the House which possibly the only one that made sense.

It was, in fact, none of the Parliament’s business!

The TAB consisted of an independent Board elected by the various racing bodies and any losses that make have been incurred over the CRISP cancellation WERE NOT public monies, they were deficits incurred by the racing industry. Skeggs also pointed out that despite the non-availability of a new betting system, the distribution of returns from the TAB to the clubs (and thus also the Government’s share into General Revenue) had increased in every year since the original CRISP contract was signed.

So far, so good!  Now check out …  :

CDA Press Statement : Victorian TAB/CRISP

CDA Press Statement : Queensland TAB/GWS

CRISP : Mark II?

GWS : (With Tongue Planted Firmly In Cheek)

CRISP : A Fatal Fall At The Last