The source said although Microsoft was an original partner when the first contract was announced, the release of its own CRM offering compelled it to push to "substitute the Onyx CRM solution for its own".

A Fujitsu spokesperson said Fujitsu, Onyx and Microsoft had contributed "significant time and resources" to assist the department in developing its understanding of the full scope and cost to implement all three phases of the ICMS based on the successfully tendered solution architecture.

"In July 2005, Fujitsu was advised that the department was pursuing an alternative solution, leveraging internal resources," the spokesperson said. "Fujitsu has had no contact with the department or Microsoft regarding ICMS since this time. The decision not to continue with the solution, which was designed by Fujitsu, was taken by the department, not by Microsoft."

In addition to its CRM product, Microsoft has also been given most of the services work, and is believed to be "burning through A$800,000 a fortnight", according to the source.

Computerworld understands that the cost blowout is due to a change in project scope. Initially, the system was being developed for the Department of Child Safety.