A losing bidder for the contract to overhaul Victoria’s Myki system has written to the state’s premier, Daniel Andrews, to claim his government ran a “flawed” tender process and questioned whether the chosen company will be able to provide the technology it has promised.
Senior executives at Cubic wrote to Daniel Andrews last week, detailing their “serious concerns about possible errors in the tender process” for the public transport ticketing system.
“These errors could impact Victorians for many years to come … we urge you to personally consider if the right decision was made given the state’s desire for a world-class ticketing solution,” the letter read.
The contents of the letter were initially reported by the ABC, but have been independently verified by Guardian Australia.
The premier on Tuesday defended the tender process.
“Politicians don’t sit down and evaluate the bids, independent experts and those who provide advice to government – independent public servants oversighted by a private auditor – [do],” Andrews told reporters.
“I’ve got no advice to suggest that there’s any issues with this process. Indeed, quite the contrary.”
Last month the state’s public transport minister, Ben Carroll, announced Conduent had been awarded a $1.7bn, 15-year contract to upgrade the Myki system, which would eventually allow commuters to pay by credit card or with their iPhone.
The US-based company was selected after an 18-month tender process, beating rival proposals from Cubic, which is behind London’s Oyster and Sydney’s Opal systems, and NTT Data, the Japanese company which has been running Melbourne’s transport ticketing.
Comment has been sought from Conduent.
At the time, Carroll spruiked Conduent’s record in Dubai, Montreal, New Jersey and Paris.
“We will now reach the 21st century, with account-based ticketing [that is] simpler and more easier to use through your credit card, through your smartphone and through your smartwatch,” he said.
But Cubic claims Conduent is yet to implement mobile phone and credit card payments in those cities.
“Paris, Montreal, and New Jersey do not have the ability to use credit card payments or payment by phones. In Dubai, there is a tender currently in progress for the products and services required under the DoT [Department of Transport] tender (open payment, mobile, account-based) with no award or contract yet completed,” the letter said.
“Not only would this information have been accessible through the customer reference check process, but it is also available through a search on the internet.”
However, a Victorian government spokesperson said the company “has a reputation for delivering successful projects in Australia and across major global cities”.
This includes such “open loop” systems – where credit cards can be used – in the Flanders region of Belgium, along with Rotterdam, Mexico City and other cities.
“We have every confidence in this new ticketing contract and the track record of the technology,” the government spokesperson said.
Cubic has also claimed the government’s procurement team “relied solely” on Conduent’s claims instead verifying them.
Cubic also claimed the government had “significant discussions and interactions” with Conduent “well after” it submitted its own final bid on 21 April.
“This gave that bidder a significant opportunity to explain and improve its offer, an opportunity that was not given to other tenderers despite having a lower priced, technically superior offering,” it 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.”
Cubic suggested the results of the “flawed” procurement process should be “re-evaluated”.
Carroll told a budget estimates hearing on Tuesday that the process was extremely thorough and said claims of unfairness were baseless.
“This has been an incredibly thorough tender process,” he said.
“I understand that different companies when they aren’t selected and they haven’t been awarded the contract may be upset.”
It is not the first time Cubic has made accusations of a flawed tender process. In 2016, it wrote to Victoria’s ombudsman and auditor general after a $700m tender was won by NTT Data.
It also launched unsuccessful legal action against the New South Wales government in 1999 after it was passed over to introduce a smartcard system in Sydney.
Guardian Australia has previously reported other bidders could have implemented open payment credit card compatibility faster than Conduent’s proposal.
Additional reporting by Australian Associated Press
