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Wednesday, 07 May 2008 08:28

Australian Opposition demands AG review of National Broadband Network tender

Australia's shadow communications minister, Bruce Billson, has issued a damning indictment of the Government's National Broadband Network (NBN) RFP process and has called on the Commonwealth Auditor General to conduct "an urgent, full and thorough investigation".

Billson identifes the main issues as being: that crucial information about existing Telstra network infrastructure is not yet available to potential bidders; the restrictive 'gag order' on proponents; the requirement that proponents put up a $5 million bond to participate in the process. He is not alone: most of his concerns have already been raised by potential bidders.

Furthermore, Billson says that communications minister Stephen Conroy "has further compounded the vagueness of the project with a willingness to accept non-compliant bids which must further elevate the risk of litigation and Commonwealth financial loss...[and] the process is dangerously compressed and truncated, for no apparent reason other than to pursue self-imposed and unrealistic timeframes for a project of this scope, scale and complexity."

Billson claims that "Considerable concern has been expressed among potential bidders, commentators and others, including myself, that this process is deeply flawed, contradictory, anti-competitive, lacks transparency and is being driven by unrealistic deadlines."

He says that the gag order is "aimed at stopping [RFP respondents] from discussing the process in any way, shape or form without Government permission, regardless of the legitimacy or public interest in doing so" and says he has been advised that it is "not a common requirement in government procurements and could in fact be quite extraordinary for tendering outside Defence procurement."

He also suggests it could be in breach of the Commonwealth Procurement Guidelines which state: "Any agency and its officials have the responsibility of ensuring that any procurement process is open and transparent." CONTINUED

Billson has asked the auditor general, Ian McPhee, to "urgently examine and intervene in the tender process to ensure that the Government's own procurement guidelines are honoured and the Commonwealth and taxpayers are not exposed to the significant risks exposed by the folly of this tender process."

He has also criticised, as iTWire did yesterday , the Government's attempt to introduce regulatory change simultaneous with accepting responses to its RFP and selecting a bidder, and has called the Request-For-Proposal a 'Request-For-Policy'. "More relevant to this very complex project would be an initial stage of 'problem definition, desired goal/outcome description and public policy setting' and what the options may be to address this Government imperative, preceding the RFP and RFT stages," he says.

"Bidders are invited to include in their submissions views concerning the regulatory, access and competition framework," Billson says. This framework is by definition, the policy environment. This should be established and agreed in advance of detailed proposal formulation as these settings go to the heart of the public policy goals of consumer choice, pricing, open access requirements, structural and governance settings, expected investment levels, network architecture and legacy infrastructure requirements, Commonwealth equity and income expectations.

"It is incongruous to run the current RFP side by side and simultaneously with the a separate process considering the regulatory, access, competition, pricing and network architecture settings that are central public policy issues and crucial foundation parameters for bid development. Bordering on the ridiculous, the RFP actually invites bidders to nominate policy settings that have as their goal, the open access, wholesale price and structural governance interests of their competitors."

Billson concludes that "As a minimum, a project of this complexity, importance and financial exposure would involve a two-stage process. The Government idea, imperative or problem-to-be-solved would be presented in a RFP that sought to draw out responses in terms of possibly interventions, strategies and capabilities. Submissions would enable the Government to formulate a more specific proposal and approach (accompanied by the key contextual and regulatory requirements) as a RFT that would facilitate considered and actionable bids through an open, transparent and fair process."

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