An audit into the process for inviting submissions to build the National Broadband Network in 2008 has found the Department of Broadband, Communication and the Digital Economy failed to provide adequate guidance to interested parties.
In his audit report, The National Broadband Network Request for Proposal Process, Auditor-General Ian McPhee found the Request for Proposal (RFP) process lacked the necessary detail to allow proponents to submit competitive and commercially viable proposals.
The RFP process was eventually cancelled
Finds guidance on network missing
Mr McPhee said the scrapped process cost over $30 million and that all six submitted proposals failed, including a bid put forward by Telstra that was excluded for failing to meet the minimum conditions for participation.
“DBCDE’s costs were some $17 million and the proponents’ costs (where advised) ranged between $1 million and $8 million,” Mr McPhee said.
He said as the RFP period progressed, it became “increasingly obvious” to the Department that the likelihood of a successful outcome was decreasing.
He said the Government could have varied the RFP document and process when it became apparent that proponents were looking for clearer directions but if it did so, it would have needed to extend its timetable for submissions.
“Proponents would have had an opportunity to submit better developed and more competitive proposals had they received greater clarity as to how the information requested was to be used when assessing proposals against the RFP’s multiple objectives and criteria,” he said.
The Auditor-General listed a number of issues with the RFP including problems with non-Telstra proposals; the pressures of the Global Financial Crisis; and the technology to be used for the network.
Mr McPhee said the compensation non-Telstra proponents would have to pay to Telstra for the right to use its assets and gain access to its customer access network was not fully analysed at the time.
He made no recommendations to assist the Department because the RFP process had been finalised.
“Nevertheless, the audit emphasises the importance of Departments gaining, as early as possible, a sound understanding of the implications of those risks that are critical to the success of major tender processes,” Mr McPhee said.
He said his full report was available from www.anao.gov.au
It was produced by an audit team consisting of Grant Caine, Karla Rayner, Will Fitzgerald and Barbara Cass.
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