AG to undertake full performance audit of first NBN RFP process

Stuart Corner
Friday, 05 June 2009 06:50

IT Industry - Strategy

The Auditor General has confirmed that the Australian National Audit Office will undertake a performance audit of the tender process for the first, $4.7b, National Broadband Network.

Shadow minister for broadband, communications and the digital economy, senator Nick Minchin wrote to the Auditor General in April highlighting a number of concerns with the tender process following its termination on 7 April. The Auditor General indicated he would conduct a preliminary inquiry, but noted that the NBN RFP was already on the list for a full performance audit - as a result of a similar approach to him from Minchin's predecessor, Bruce Billson - and he has now confirmed that this will take place.

The AG, Ian McPhee, has written to Minchin informing of the upgrade to the NBN audit saying "I have decided to terminate the preliminary enquiry and designate the topic a performance audit..[as] foreshadowed in the planned audit work program 20098-2009 of the Australian National Audit Office."

McPhee said the audit would "examine key aspects of the failed tender including: the background to and conduct of the RFP process; management of key risks associated with the process and outcome; and; stakeholder consultations." The audit will begin in late June 2009 and is expected to be completed in early 2010.

According to the ANAO's web site, it has extensive powers of access to Commonwealth documents and information, and its work is governed by the same auditing standards as the auditing profession in Australia.

Minchin welcomed the move saying: "The Rudd Government wasted almost 18 months and $20 million on a tender which was based on totally unrealistic key objectives, which the bidders themselves confirmed could not be met...There is a genuine public interest in this failed process and I welcome the audit, which could produce valuable insights to help ensure there is never a repeat of this wasteful and badly managed process."

This is the Opposition's second attempt to skewer the Government over the NBN RFP. Minchin's predecessor, Bruce Billson, last year adopted the same tactic after communications minister, Stephen Conroy, had indicated he would accept non-complying bids. That attempt failed.

McPhee wrote back saying amendments to the RFP would be required for non-compliant bids to be accepted, and that "The [Australian National Audit Office] notes that the RFP provides the flexibility to make such amendments, should the Government choose to do so."

However, the AG also advised Billson that, "Given the materiality of the NBN program, I will include the RFP process of the NBN program as a potential audit topic in the ANAO's (Australian National Audit Office) Planned Audit Work Program 2008-09."