The Australian Electoral Commission’s (AEC) multimillion-dollar procurement of Senate ballot scanning services from Fuji Xerox Businessforce in 2016 fell short of the Government’s competition goals, according to a new report.
The Australian National Audit Office (ANAO) released its performance audit report, the Australian Electoral Commission’s Procurement of Services for the Conduct of the 2016 Federal Election, on 22 January.
Among the procured services examined by the ANAO were the AEC’s contracts and purchase orders awarded to Fuji Xerox Businessforce in the lead up to the 2016 Federal Election.
The work procured from the supplier was largely for the development and delivery of Senate ballot paper scanning and data capture services.
Tender documents published at the time show that the AEC handed Fuji Xerox Businessforce a $19.1 million, six-month deal in July 2016, for the Senate scanning services, and a separate $1.6 million deal for data capture services just a month earlier.
According to the ANAO, the entirety of the services procured by the AEC from Fuji Xerox Businessforce amounted to about $27.2 million, and included three work orders and five project change requests.
After examining the deals, the ANAO has now decided that the AEC’s procurement processes did not encourage open and effective competition sufficiently.
“The AEC has not demonstrably achieved value for money in its procurement of Senate scanning services,” the ANAO stated in its report. “It has not used competitive pressure to drive value nor given due consideration to cost in its procurement decision-making.
“The AEC sought to encourage competition amongst transport providers but at times struggled to achieve value for money. It would have benefited from additional logistics expertise and transport industry knowledge when establishing and managing transport arrangements,” it said.
Specifically, the ANAO said that the AEC’s procurement approach came with the risks of over-dependency on a single supplier, therefore reducing the ability of other potential suppliers to be competitive in future approaches to market.
Additionally, the AEC’s reliance on an earlier Deed of Standing Offer from 2014 through which it issued work orders to Fuji Xerox Businessforce for the 2016 procurement meant that the services subsequently procured from Fuji Xerox via the existing Deed were substantially higher in value and broader in scope than could have been foreseen in 2014 by potential providers.
“The majority of the Senate scanning services fell outside the scope of the existing Deed and the costs were not calculated in accordance with the pricing schedule. Substantial amendments were made to the Deed so as to incorporate the Senate scanning services,” the report stated.
Since completing its audit, the ANAO has recommended that the AEC avoid this happening again in the future by using “open, competitive procurement processes wherever possible so as to demonstrably obtain value for money”.
The AEC’s procurement of services from Fuji Xerox Businessforce was undertaken to assist in the conduct of the 2016 Federal Election.
The Senate scanning system developed by Fuji Xerox resulted in a semi-automated process for capturing voter preferences from Senate ballot papers for entry into the count.
The ANAO noted in its report that the procurement was undertaken, and the Senate scanning system developed, in a tight timeframe given the changes to the Electoral Act were passed 18 March 2016, the double dissolution election was announced 9 May 2016 and the election was held 2 July 2016.
Both Fuji Xerox and the AEC responded to the ANAO’s findings, with the supplier stating in a letter that it believes the solution it provided in conjunction with the AEC Senate Reform team was a “world first” in regards to its three-month technical and implementation timeframe, and that it delivered what was promised.
“The solution delivered the key requirement of delivering 2016 Senate Election results with high integrity across eight states/territories within the legal (constitutional) timeframe,” Fuji Xerox said.
“The solution also delivered value for money for the Australian public given the risk profile, accuracy, scale and immutable deadlines of the design, build and delivery phases of the project,” it said.
For its part, the AEC said that it is continuously improving its procurement processes to enhance compliance and promote best practice.
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