New ticketing system tender

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Executive summary 2 New Ticketing System Tender Between the release of the RFT (30 July 2004) and the Board’s recommendation of the successful tenderer (10 June 2005), the Board met nine times. The conduct of the Board meetings and out-of-session briefings and approvals were consistent with contemporary approaches to corporate governance. While the Board was expanded late in the tender process to comprise three members (the statutory limit is five members), for most of the tender period the Board consisted of two members. Given the size and complexity of the tender, a larger Board was warranted. The Authority established an Audit Committee with two members to assist the Board. At the time of the NTS tender, these two individuals were also members of the Board. A larger Audit Committee, with at least one external member, would have provided a higher degree of assurance about the Authority’s governance, compliance and performance. The Authority established an evaluation committee comprising five senior executives from the Authority, the Authority’s senior legal advisor, and representatives from the Departments of Treasury and Finance and Infrastructure. The evaluation committee was supported by five advisory teams comprising Authority staff, external experts and advisors. Four senior Authority managers were members of both the evaluation committee and one or more advisory committees. The accountability arrangements would have been strengthened had the senior managers participated in either the evaluation committee or the advisory teams but not both. In a major tender, the role of a Probity Advisor is to establish and manage the probity approach, while the role of a Probity Auditor is to independently review the nature and conduct of the probity approach. In the case of the NTS tender, the Probity Auditor and Probity Advisor roles were combined. While combining the roles may benefit a tendering authority through cost savings and efficiencies, having a separate Probity Auditor role provides a higher level of assurance about the standard of tender probity. Combining the roles serves to confuse accountabilities and may weaken public confidence in the probity of a tender. As a non-departmental public entity, the Authority was not required to comply with the tendering guidelines issued by the Minister for Finance, the Department of Treasury and Finance and the Victorian Government Purchasing Board (VGPB). The Authority had adequate policies and procedures in place to ensure compliance with the VGPB guidelines. The Authority began planning the NTS tender in late 2003, building on a significant body of research undertaken by the Authority’s precursor, the Public Transport Ticketing Taskforce. The Authority’s planning for the NTS tender was completed before the initial date for the close of tenders. The essential plans, processes and administrative arrangements were all in place when the NTS tender commenced.
Management of the NTS tender Executive summary There are only a small number of suppliers of automated ticketing systems worldwide. Two major equipment suppliers dominate the Australian market. Most of the ticketing systems acquired around the world have involved a long-term contract for the supply of a proprietary system. Such arrangements have created technical barriers to purchasing authorities, with respect to: • obtaining the best ticketing system • changing equipment or suppliers during the contract period if the systems and equipment fail to operate as required. The NTS procurement approach was designed to overcome these problems by: • breaking the system into a number of separate components • establishing a system where component parts were interchangeable (through the use of open architecture). Rather than providing detailed specification requirements, the Authority set out desired outputs and outcomes and gave the tenderers considerable flexibility in how to meet the desired outputs and outcomes. Audit assessed the NTS tender against the high-level objectives that were being sought from the tender, namely: • high levels of performance • timeliness and smooth transition • systems flexibility • value for money. Audit found that the tender process was largely successful in meeting the Authority’s objectives: • the Authority established a procurement process which emphasised customers’ requirements and the selection of a solution that would provide for the future needs of the Victorian community • the procurement phase of the NTS project was timely when compared with other ticketing tenders in Australia and overseas • transition to the new system should be assisted by the transitional agreement established between the Authority and the current operator. Also, transition is likely to be facilitated by the fact that the current ticketing operator is involved in the successful tenderer’s consortium • the tender process adopted by the Authority enabled it to attract more tenders than other comparable ticketing projects had received • the contract price submitted by the successful tenderer was within the budget set by the State Government and satisfied the Authority’s internal benchmark. The procurement process was successful in reducing the tender prices initially submitted by around 35 to 40 per cent. It is likely that, if the selected tender is delivered as agreed, value for money will be achieved. New Ticketing System Tender 3
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New ticketing system tender

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