The company charged with the rollout of the National Broadband Network (NBN), NBN Co, has denied its original construction tender process was flawed to begin with and ultimately resulting in the suspension of its procurement process, stranding 14 bidders.
Speaking at a joint parliamentary committee, NBN Co chief executive, Mike Quigley, defended the company against claims that it was a flawed tender that led to the suspension of the tenders on 1 April this year.
“I wouldn’t at all say the previous tender was flawed, what I would say is we went out with our requirements, and if, in fact we had responses which were satisfactory and the prices were acceptable we would have moved ahead on that basis but it didn’t work out that way,” Quigley said.
“In all these large tenders you have to make a judgement in the end about whether you believe you’re getting value for money… We were not satisfied that with the construct we had put in place and the responses we had that we were going to get the best outcome so we changed that process, we suspended that process, moved into another process.
Quigley pointed to the large number of bidders, which included Telstra, Transfield and Silcar, as the reason negotiations became difficult.
“It’s impossible across the large number of tenders we were tendering with to have the sorts of detailed discussions that we are having in this second process because they’re essential in order to try and iterate down on what we think is the right set of conditions," he said.
According to Quigley, the public tender process and the need to have 14 bidders is “clearly” unnecessary following the company’s move to a new process.
“It says that you can do things with a much smaller number of tenders than you can with 14 simultaneously and with these types of public processes you cannot do anything,” he said.
Former NBN Co head of construction, Patrick Flannigan quit one week following the suspension of the construction tender, with the company's general manager of construction, design and planning, Dan Flemming, appointed as acting head of construction.
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