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- In short: The company that lost the contract for Victoria's public transport ticketing system has raised concerns about the tender process
- What's next? Transport Minister Ben Carroll said the government chose the best operator for the job
A global company that lost a major contract has accused the Victorian government of asking it to make its pitch to run myki more expensive, in an extraordinary letter that raises questions about the value for money of the $1.7 billion deal to overhaul the ticketing system.
In May, the Andrews government awarded a 15-year contract to run and upgrade the mkyi ticketing system to US based Conduent.
As part of the deal, the operator must overhaul the system to allow commuters to use their mobile phone and credit cards to pay for ticketless travel.
But the deal has been widely criticised amid questions over Conduent's international track record, while unsuccessful bidder Cubic wrote to Premier Daniel Andrews complaining the procurement process had lacked rigour.
NTT Data, which currently operates the myki network, has also raised issue with the process in a letter to the Department of Transport secretary Paul Younis.
"Such is our level of concern about the process conduct, and the outcome, that we feel compelled to raise them directly with you," the letter, seen by the ABC, says.
Among NTT Data's chief concerns is that it received directions from the procurement team that "our bid price should be increased".
NTT Data made a joint bid with Singaporean giant MSI Global, which runs the complex and world-renowned Singapore transport system. The bid was $978 million.
"There was no reasonable explanation for making these requests,'' the letter says.
"To be asked to alter our offer in this way does not evidence a robust tender process.
"It appeared as if maintaining the best commercial outcome and value for money was not a primary concern."
The company declined to comment on the letter, which was sent on June 9.
The letter calls for an urgent review of the tender.
"[We] share the view that mistakes have clearly been made. These are expensive, and they will cost Victorians for many years to come," it says.
The Andrews government and Public Transport Minister Ben Carroll have consistently stood by the deal, saying they were confident it was the best option for Victoria.
In the letter, NTT Data raises concerns that it was not asked to revise its bid to include new, or all new, equipment, which other bidders did. It says had this been the case it would have only added $120 million to the bid.
Since the contract was awarded, industry insiders and the state opposition have flagged concerns with the process, given the most expensive option was chosen.
Others have highlighted how Conduent has not delivered a ticketless transport system in big global cities like Paris and Dubai where it operates.
Conduent does run ticketless systems in Adelaide, Flanders in Belgium and Mexico City.
In the letter, NTT Data echoes concerns from Cubic that Conduent were able to keep engaging with government after other companies had made their final submissions.
NTT Data also accuses the department's procurement team of interfering in the way subcontractors were able to engage with bidders.
"The unjustifiable and unexplained interference in the formation and negotiation of these commercial arrangements demonstrated a lack of rigour, transparency and control for important commercial aspects of the procurement process," the letter says.
Among the company's other list of grievances is:
- a lack of objectivity and accountability from the procurement team during feedback sessions
- a lack of technical understanding by the procurement team
- concern that price was given little weight
The consortium says it has global experience, especially with MSI Global's involvement.
"Between us, we have deep experience in international procurement and have never observed a process like this one conducted,'' the letter says.
Shadow Public Transport Minister Richard Riordan said Victorians should be rightly concerned "that serious international tenderers would be asked to increase their price".
"We need an inquiry into why this major international company are saying they've never seen a procurement process run like this one,'' Mr Riordan said.
"Clearly it does not look like a robust tender process."
In question time, Public Transport Minister Ben Carroll rejected allegations from the opposition that the process was "rigged".
"We have chosen the best operator to have a statewide solution for our public transport ticketing solution,'' Mr Carroll said.