New ticketing system tender

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Executive summary 4 New Ticketing System Tender Audit also assessed the key elements of the Authority’s management of the NTS tender, namely: • the resourcing of the tender management team • steps taken to inform potential tenderers about what was being sought, the procurement approach and the tender process • management of changes to the tender process and requirements • the evaluation of tenders • the conduct of negotiation with one or more shortlisted tenderers, and clarification of the shortlisted tenders • documentation of the tender process. Audit identified a number of areas of good practice, as well as areas for improvement and lessons for wider application to future major tenders. The Authority engaged sufficient staff with ticketing and tendering experience, and the tender team had sufficient access to specialist services and skills. The Authority conducted market soundings in January and May 2004. The soundings were an effective way of informing potential tenderers about the goods and services being sought, other aspects of the tender requirements, and the proposed procurement approach. Up to the receipt of initial offers, the Authority successfully communicated with tenderers and potential tenderers about the solution being sought and the nature of the tender process. After the receipt of low-quality initial offers, the Authority implemented an interactive approach (which was permitted by the RFT). The process was unfamiliar to several tenderers. While the Authority and the Probity Auditor took extensive steps to keep all tenderers well informed, some tenderers told audit that they needed more information about the process as it evolved. Also, despite the steps taken to inform the market, some tenderers did not fully appreciate the implications of the ‘outcomes’ approach to the tender. Additional steps could have been taken to: • apprise tenderers of the procurement approach, and its implications for the tender requirements and compliance requirements • revisit the control framework and risk framework in light of the evolving approach. During the negotiation stage, approximately 54 Authority staff, consultants, departmental staff and transport operator staff had direct access to tenderers (the majority of the access was through clarification sessions rather than negotiation meetings). While the subject matter of the tender and the clarification sessions necessitated a high degree of involvement of technical specialists, the number of people with direct access to tenderers was high. This increased the risk of uncontrolled information flows. A three-part tender rating system was used in the NTS tender. The rating system did not indicate the difference between tenders within each category, and did not provide a precise assessment of how close each tender was to meeting the tender requirements. A more fine-grained system would have:
Executive summary • shown more meaningfully the relative position of tenders • allowed the Authority to more clearly match the assigned rating to the evaluation narrative • given a clearer representation of the progress of tenders over time. While the NTS tender evaluation reports identified the areas where tenders did not meet the RFT requirements, the reports did not articulate which requirements were critical or threshold issues and which were not. For those requirements that were negotiable to some extent, this extent was not specified. The clear articulation of a maximum acceptable level of risk acceptance by government would have enabled the decision-makers to determine with more precision and confidence whether the departures from the RFT requirements were minor, or whether they were such that the desired solution could not be acquired within the budget without an unacceptable allocation of risk. Probity of the NTS tender While flexible and innovative approaches to tendering can enhance value for money for public procurers, the importance of probity is just as great in new types of tendering as it is in traditional procurement processes. Due to the specialised nature of ticketing systems, it was highly likely that a number of Authority staff would have potential conflicts of interest from prior experience with organisations tendering for the NTS project. The Probity Auditor identified more than 30 staff and other individuals involved in the tender evaluation process who had potential conflicts of interest. Seven staff members and one consultant were rated as high risk. Most of the conflicts of interest resulted from previous work histories and/or shares in two companies included in consortia tendering for the NTS. All shareholdings were disclosed to the Authority in conflict of interest statements signed by staff and consultants and were identified in the work undertaken by the NTS Probity Auditor. All of the declared shareholdings were modest and most were immaterial. The most significant shareholding of relevance to the tender was the CEO’s shareholding in Headstrong / James Martin & Co. The shareholding’s potential to damage community confidence in the tender was high. The Authority could have taken additional steps to address perceived conflicts in relation to the shareholding. Some senior Authority managers had shared work histories with a number of members of the tendering consortia. These shared work histories and other relevant relationships were disclosed to the Authority. The Authority informed tenderers about those people in the Authority who had prior experience with tenderers. The Authority identified the conflicts of interest in a timely way. Audit found no evidence of corruption in the NTS tender, and no evidence that the conflicts of interest led to the unfair or biased treatment of particular tenderers or groups of tenderers. Nevertheless, the Authority could have taken additional steps to communicate to tenderers, the New Ticketing System Tender 5
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