Two Australian companies that competed for the contract, Vitech and Maintenance Systems Consolidated (MSC), said the tender administrators were running a one-horse race when they invited around six to eight SMEs to bid to replace ageing data collection hardware used in conjunction with software to monitor the condition of the Navy's fleet. Entek IRD was awarded the contract to replace the hardware, which was installed in 1990.
Both companies are contesting the tender and have written to the Federal Defence Minister, Senator Robert Hill, demanding that the contract with Entek be suspended pending an inquiry.
The companies allege that the tender administrators were technically incompetent and never had any genuine intent to give fair consideration to any bid other than that of Entek, which is the incumbent holder of the Navy contract to supply hardware and software for data collection.
"The actual writing of the technical specification was pretty much verbatim from technical specifications for the Rockwell Entek offering, and blatantly so -- they were even too lazy to change the words," claimed Andrew Gale, managing director of MSC.
Kelvin Wright, the managing director of Vitech, believes the conduct of the tender administrators breached the spirit of government guidelines on promoting Australian small and medium-sized technology companies.
Wright said his company, an Australian and New Zealand-owned operation, was able to meet the Navy's technical goals at a lower cost than Entek, but alleged that the tender was worded in such a way that demonstrates its drafters had no intention of changing the existing software uses Navy uses to manage its fleet's maintenance.
Wright said that left all competing bidders effectively "locked out" of the tender as no two manufacturer's software and hardware will interoperate.
"We've since done a review of all manufacturers to see if anyone out there could comply with what they've asked for and no-one could do it," said Wright.
According to Wright, retaining the Entek software could cost the Federal Government close to twice as much as those of other bidders over the life of the contract.
Vitech said it could provide its hardware and software solution to the Navy for three years at a total cost to the Navy of around AU$660,000. The company claimed Entek IRD's solution cost more than AU$700,000 before software costs were taken into account. Based on commercial license costs of Entek software and taking into account generous government discounts, Vitech estimates it would cost the Navy an extra AU$100,000 per year to continue running Entek's software throughout its fleet.
The tender's management was split over two defence agencies. The Test Equipment Logistics Management Unit (TELMU) handled the technical aspects of the tender while the Aerospace and Support Contracting Department handled contractual aspects of the tender.
Both Gale and Wright said they chose to pursue the matter with the Minister because they were dissatisfied with answers they were given by TELMU for their disqualification.
Gale requested a meeting with TELMU to discover why his company was disqualified from the tender. After waiting nearly two months for his request to be met he was told that his company failed to meet four mission-critical requirements. Gale said the importance of the requirements were never stipulated in the tender and he believes that the critical requirement were contrived retrospectively to disguise bias in the decision making process.
"They should have made those four mission critical features and mandatory and the rest highly desirable," said Gale.
Wright, who has scheduled a meeting with TELMU today, claims to have had a similar experience. He said the tender administrators initially appeared to favour local technology content. Wright asked the tender administrators whether Vitech's ability to supply 98 percent Australian content was given consideration. He was told it was TELMU was not obliged to consider aboriginality of the technology where contracts were worth less than AU$5 million.
Gale estimates that his company spent around AU$40,000 to AU$50,000 devoting resources to participating in the requests for tender.
Senator Hill's office did not respond to ZDNet Australia's requests for comment before publication.
All government IT facilities should be forced to buy Australian products and services where available. It makes me sick to see our tax dollars being sent overseas.