Sun, 20th April 2008

Conroy's broadband tender process already in deep trouble

The Hon Bruce Billson MP
Shadow Minister for Broadband, Communications and the Digital Economy

Communications Minister Stephen Conroy’s tender process for the construction of a national broadband network risks falling apart at the seams with the minister telling a key industry summit that he is happy to accept “non-complying” bids.

The lack of confidence potential bidders have in the process was further heightened at last week’s ComsDay Summit when Senator Conroy told a bemused audience that bidders didn’t even have to bother complying with the tender requirements.

“We’ll accept non-complying bids, so you have a capacity to actually put forward a bid in any structure you want so we’ve actually tried to make this as flexible as we can,” Senator Conroy said.

Legal opinion I have received also suggests the controversial gag provision in the Request for Proposal documents is not common as claimed by the minister’s office, but rather “bizarre and extraordinary”.

There is also clause in the RFP stating that this is not a process contract. What is the purpose of this clause? The minister can't have it both ways, these documents are either binding or they're not; if not what purpose do they even serve?

If this document is not legally a contract, where does that leave the gag order, or even the $5 million bidder bond demand? It seems the minister is saying to bidders the process is binding on you, but not on me.

And if it is a process contract, the minister says he will accept non-compliant bids, which would mean if a bid was deemed non-compliant because you broke the gag or couldn’t pay the bond, that doesn’t matter because Senator Conroy is happy to accept it anyway.

If a non-compliant bid is successful, the minister could face a legal challenge and compensation claim from compliant bidders.

There are also strong doubts about whether the clause pertaining to the RFP document not being a process contract would be legally effective; in court you could have a situation where if it walks like a duck and sounds like a duck, then it could be determined that it is one.

This process has been mishandled from the beginning, made urgent by the minister’s ridiculous and unrealistic project deadlines. If the Australian National Audit Office is not already watching this process very closely, I’d be very surprised.