‘Scandalous’: Daniel Andrews hits back at scathing letter

A losing bidder in the overhaul of the state’s public transport ticketing system has raised concerns about “errors” in the tender process.

A losing bidder has warned of ‘errors’ in the tender process in a letter obtained by the ABC. Picture: NCA NewsWire / Paul Jeffers

Daniel Andrews has defended his government’s tender process after awarding US-based company Conduent the $1.7bn contract to overhaul the myki public transport ticketing system.

This comes after Cubic, a losing bidder, wrote to the Victorian premier on Tuesday to raise concern about “possible errors” in the process, noting that its bid was $100m cheaper than Conduent’s.

Cubic also has an established track record of operating public transport systems that use credit cards and mobile phones for fare payment whereas the winning bidder does not.

Opposition transport spokesman Richard Riordan called the letter “scandalous” when talking to ABC Melbourne’s Virginia Trioli on Tuesday morning.

“(Transport Minister) Ben Carroll and Daniel Andrews have to come out immediately and explain to Victorians why we are paying hundreds of millions … more for a ticketing system that will not deliver the same quality of service as people are getting in Brisbane, Sydney, London, New York,” he said.

On Tuesday, Mr Andrews told the media he wasn’t “here to share correspondence with you or anybody else”, and he had not received any advice to suggest errors within the process.

Daniel Andrews has defended his government’s tender process after awarding US-based company Conduent the $1.7bn contract to overhaul the myki public transport ticketing system. Picture: NCA NewsWire / Andrew Henshaw

Mr Andrews told the media he wasn’t ‘here to share correspondence with you or anybody else’, and he had not received any advice to suggest errors within the process. Picture: NCA NewsWire / Andrew Henshaw

A losing bidder has warned of ‘errors’ in the tender process in a letter obtained by the ABC. Picture: NCA NewsWire / Paul Jeffers

“What I’m here to do is to simply point out to you that there’s been a process run,” he said.

“There’s a probity auditor that’s been deeply involved in that process.

“Advice was provided as to who won that process and the tender has been awarded.

“Beyond that I’m really not in a position to have anything more than that to say, other than to direct you to the relevant minister, who has been across this from the very beginning.”

Conduent was awarded the 15-year deal last month, agreeing to modernise and operate the state’s public transport ticketing system.

Daniel Andrews said the company, Cubic, had written letters ‘to lots of different people’ after losing the bid. Picture: NCA NewsWire / David Crosling

Cubic, a losing bidder, wrote to the Victorian premier on Tuesday to raise concern about “possible errors” in the process, noting that its bid was $100m cheaper than Conduent’s.

Victorians have long awaited the revamped 21st century system that would bring it in line with other major cities by accepting phones, credit cards and smart watches as fare payment methods.

Conduent is set to roll out the new system over the next two years, taking over the contract from myki’s current operator, NTT Data, on December 1; however, the ABC has reported that the company is yet to establish any public transport management system that uses phone payment methods.

Cubic has a proven track record of operating such systems, as it has done in Sydney, New York and London.

In a letter sent to Mr Andrews, two senior US-based executives, chief executive Stevan Slijepcevic and corporate senior vice-president Jeffrey Lowinger, said they had “serious concerns” over possible errors in the tender process.

“Cubic asks you (to) review the flawed procurement process for the PTT (public transport ticketing) and suggest the result be re-evaluated to ensure that Victoria receives the innovative technology solution its residents desire and deserve,’’ the letter said.

Cubic operates Sydney’s Opal contactless fare collection system, among others. Picture: NCA NewsWire / Monique Harmer

The company also alleges government officials held discussions with Conduent after Cubic made its final submission.

“This gave that bidder a significant opportunity to explain and improve its offer, an opportunity that was not given to Cubic despite having a lower priced, technically superior offering,’’ the letter said.

“These actions by the procurement team did a disservice to the state by reducing the competitive tension during the tender process, and it prevented the state from potentially receiving an improved offer from Cubic had it had similar discussions and interactions with Cubic.”

The Premier said the tender was awarded to Conduent through a process overseen by probity auditors. Picture: NCA NewsWire / Paul Jeffers

Mr Andrews maintains the tender was awarded to Conduent “on advice”.

“There were privately audited arrangements in place to oversee that process,” he said.

“(Cubic has) written a letter to me, they’ve written letters to lots of different people.

“(The Public Transport Minister) has awarded the tender based on a process that was oversighted by probity auditors and he has made decisions based on advice provided to him by his department – independent public servants.”

Cubic previously accused the NSW government of a flawed tender process in 2001 after a contract for the state’s ticketing system was awarded to rival ERG Group.

Originally published as ‘Scandalous’: Daniel Andrews hits back at scathing letter