Australia Network tender process lacks transparency
From www.theaustralian.com.au/business/opinio...frg9tf-1226086715986
THERE'S an old rule in journalism that if things just don't seem quite right, chances are they're not. If ever the Not Quite Right rule deserved to be applied to an opaque and puzzling matter of national importance, it is the tender processes for the $230 million Australia Network contract.
What we have here looks very much like manipulation of a public tender. If such manipulation is proved, the implications for the government are profound and heads must roll.
The Australia Network presents our image to the world. For 10 years the satellite-delivered TV service has been provided by the ABC and funded to the tune of $20m a year by the Department of Foreign Affairs and Trade.
Last year, after pressure from Sky News Australia for a competitive process, the government called for tenders to supply the service for the next 10 years at a total cost of $223m.
That's a large bucket of public money, which will come out of DFAT's budget. There were two tenderers, the ABC and Sky.
Tenders closed in February and a winner was to be declared by May 2, but that deadline came and went.
Sources have told me the panel of public servants from four departments - Treasury, Finance, DFAT and Communications - that assessed the tenders decided three to one for the Sky News bid, with only Communications against.
The government was clearly unwilling to accept this recommendation. On June 25, it announced the tender process would be extended because of "changed international circumstances".
This is where the NQR rule begins to apply. Foreign Affairs Minister Kevin Rudd said tenderers had been asked to submit amended bids "to specifically address how their operation of the Australia Network service would meet Australia's national interests in the light of the increasing influence of key emerging markets on the global economy, significant political transformation occurring across the Middle East and North Africa, and the need identified during recent consular crises for strengthened associated information services through a range of sources".
Oh, and by the way, Rudd mentioned that cabinet would now make the ultimate decision. He didn't mention that the entire process had been removed from his remit and handed to the Minister for Communications, Victorian Senator Stephen Conroy. There were no further explanations, prompting obvious questions: what has changed since tenders were first called regarding the influence of, say, China or India, on the global economy? What aspect of the Arab Spring required a changed approach to the network? What consular crises have been affected by the role AN did or did not play? Why, given that all the reasons relating to allegedly changed circumstances are in the field of foreign affairs, has the Foreign Affairs Minister been stripped of his power and the matter handed to a minister who told the Senate Estimates committee a few weeks earlier he had "nothing to do" with the process?
Answers to these questions have not been forthcoming. Sources close to the tenderers are tight-lipped. It is against the law for them to reveal confidential tender matters. An aide to Conroy said it "seemed appropriate" that a communications matter be handled by the Communications Minister. But he agreed it was a "good question" as all the money involved would come from DFAT.
In this vacuum of credible information, the rumour mill has geared up, providing a number of theories about the forces behind this puzzling procurement process.
One theory is that Rudd's foreign affairs office is unable to devote time to studying and approving a tender proposal by the due date. Another opinion is that Rudd was recommending variations outside the tenders that would have made him a de facto program director for the network. This is consistent with Rudd's known affinity with media matters and his micro-managing instinct, but it is no more than a theory. These theorists believe: "It's Kevin's mess and they had to take it away from him." Another line of thinking is based on the premise that the "wrong" tenderer won.
This assumes the government was always determined to give the contract to the ABC. There are many who believe the ABC is the right organisation to provide an independent service, just as it has done for 70 years with Radio Australia.
If this is so, the question is: why did the government open a competitive process if it was not willing to abide by its results? Some reports suggest the ABC's tender was non-compliant. But ABC sources dismiss this and Conroy told the Senate hearing last month he had seen the ABC's tender and it was "a fine bid".
Others suggest unwillingness on the part of the government to give the contract to an entity associated with News Limited (publisher of The Australian) and its proprietor, Rupert Murdoch. This is about as tenuous as it gets - Murdoch's News Corporation currently has 39 per cent of BSkyB's one-third share in Sky News Australia, although that will rise if or when Murdoch acquires the other 61 per cent of BSkyB. It is widely believed that Conroy has a profound dislike of News and gives solid support to the free-to-air TV broadcasters, of which Seven and Nine are each one-third shareholders in Sky News.
It would be unusual even for a political numbers man to allow one-third of a third to outweigh two-thirds, but the rejection of their interests in the AN contract might be cause for Conroy to give favourable consideration to the FTAs' demands for another licence fee rebate. Conroy is also the minister in charge of the ABC, so it appears he has an undeniable conflict of interest as he makes the decision about the AN contract.
It's a can of worms. Good government is supposed to be about openness and transparency. The reverse is the case in this matter. Public explanations do not stand up to scrutiny.
I understand Freedom of Information processes are about to be used to see if light can be shed on the procurement process. Parliament sits this week and questions should be asked in both houses. Greens senator Bob Brown could use his new balance-of-power numbers to press a Senate inquiry.
The government should be aware of another old rule that has a habit of coming into play in the wake of an NQR. It's the TWO rule - Truth Will Out.
