Full blown audit into NBN tender

In a letter cited by iTnews, Auditor General Ian McPhee said the Australian National Audit Office (ANAO) will conduct a full-scope study of the Federal Government's NBN Request For Tender process - beginning later this month and concluding in early 2010.

The audit will cover the background to the RFP process, conduct of the RFP process, management of key risks with the process and outcome, and stakeholder consultations.

The (ANAO) initially announced it would begin conducting an inquiry into the Government's failed Request for Tender (RFT) process for the NBN in early May 2009.

A spokesman for the ANAO told iTnews a preliminary inquiry rarely means more than "making a judgement call on whether we need to dedicate resources to an issue."

A 'performance audit', on the other hand, sees the ANAO devote between two and four staff in an "intensive exercise" that usually takes up to 11 months to complete.

"A performance audit involves declaring an objective criteria and the gathering of evidence," he said.

In April, the Government concluded that none of the tenders in the RFT met the criteria to build a national broadband network to the Government's specifications.

These specifications included a national network covering 98 per cent of the population with speeds of at least 12 Mbps.

Australia's largest telecommunications carrier, Telstra, had been kicked out of the bidding process in December 2008 for failing to lodge a required document detailing how it would involve small business in the roll-out of such a network.

Two key reports that informed the Government's decision - one by an Expert Panel and another by the Australian Competition and Consumer Commission (ACCC), have been withheld by the Government, citing the need to protect the commercial confidentiality of those parties that bid in the failed RFP process.

The ANAO spokesperson said the Auditor General has "full access to any Commonwealth or Cabinet document" when conducting a performance audit.

Professor Reginald Coutts, a member of the NBN Expert Panel, told iTnews he was "not surprised" by the decision to audit the process.

"I'm not concerned because the process was run in a very transparent way," he said.

His sentiments were shared by fellow panel member Rod Tucker.

"It is the job of the National Audit Office to do this kind of thing, especially for a large project of national importance," he told iTnews. "I was very comfortable with the NBN RFP process. In fact, I am very pleased that I live in a democracy, where all governments are subject to close scrutiny."

The final report, due in early 2010, will be published on the ANAO web site and printed to be tabled in parliament as a public document.