CAA Slated Over TAAATS Contract

• the selection process was soundly based?,

• was it conducted in a fair and unbiased manner?,

• was the CAA Board properly and adequately informed of the results of the evaluation in a fair and unbiased manner?, and,

• were the actions of the CAA Board on this matter in accordance with its obligations? In essence, Macphee found that;

• the original selection process was soundly based,

• the original selection process was departed from in a manner which was both unsound and unfair,

• the CAA Board was not properly and adequately informed of the results of the evaluation,

• the responsibility forthis lay squarely with the Chief Executive Officer, MrFrankBaldwin, and with the officer principally responsible for TAAATS, Dr Rob Edwards.

As might be expected, after consideration of the report, Mr Baldwin and Dr Edwards were stood aside by the CAA Board, with the Chairman, Mr Ted Butcher stating that the Board considered it essential that the two executives be given the opportunity to respond to the criticism of them in the report. At time of writing the CAA Board was to hand down a judgement as to the future of Mr Baldwin and Mr Edwards on February 2. Refer Stop Press for more details.

Sequence of Events

In the first instance, restricted Registrations of Interest (ROI) were sought from six finns to supply the new TAAATS. The well-known firm of Raytheon was excluded by the CAA despite strong protests from that company, as it was lmown that two of the invitees would not tender. The reason given by management for this decision was that it would involve a further week of negotiation should Raytheon be included.

The evaluation team then assessed the four offers made and rated Thomson Radar Australia Corporation (Thomson) and Hughes Aircraft of Canada (Hughes) as the front runners.

The TAAATS Review conclusion was that at that point, these two firms would have been closed for the specification development phase as set out in the ROI

The Review also found that there was no justification in eliminating Siemens Plessey Electronic Systems (Siemens Plessey) before IBM Australia (IBM), since as they had both scored less well than Thomson and Hughes, they should have been eliminated together.

The first significant departure from the agreed assessment process occurred in October 1991, when, on management’s advice the CAA Board decided that instead of selecting two, or possibiy three companies to enter a stage of parallel specification development, all three remaining companies would be invited to make refined offers and then one company would be selected as the preferred contractor and one as the alternate. Management had been unable to recommend retaining any two of the three companies, believing that they all had potentially fatal flaws, hence the need for an extra stage in the evaluation process. Evidence was offered to the Review that the poorly structured ROI could be blamed for this situation having developed.

The justification for the change to the original ROI procedure of parallel specification development to a preferred contractor was that it would reduce the time involved to contract from nine months to five.

The Review considered that as neither appropriate contractual obligations nor detailed requirements were included in the original ROI documentation, the new arrangement put the CAA at an extreme disadvantage during subsequent negotiations.

Subsequently, on December 18 1991 , management recommended to the CAA Board that IBM should be eliminated and that Hughes be announced as the preferred contractor. This was despite the Chief Executive’s expressed concern to the Board regarding the risks (as he saw them) associated with the Hughes proposal.

Not satisfied with the recommendation, the Board instructed management to engage in further negotiations with both Thomson and Hughes in order to resolve outstanding issues, including price and risk. Following this decision, a further round of overseas visits was made by a new project team which, however, did not include a software expert.

The net result of this change to the ROI procedure was a three-month delay to the scheduled announcement of a preferred contractor.

Following evaluation of the latest proposals, management, at a Board meeting on March 7 1992, reversed the earlier recommendation and now proposed that as a result of the latest round of assessments, Thomson be selected as the preferred contractor. The Board, however, deferred its decision again, instructing management to seek legal opinion on, inter alia, performance guarantees.

At a hastily convened final Board meeting on the matter which was held on March 131992, the Board finally decided on the preferred and alternate contractors and this decision was subsequently publicly announced. However the decision was made with two Directors absent, with the vote being five affirmative and two negative; the narrowest possible margin.

The Review found that inadequate information and unsoundconclusionsregardingtherisksassociatedwithHughes were presented to the Board, and that under the circumstances, no company slwuld have been named as preferred contractor.

The Review was particularly critical of Dr Edwards stating that it was a devastating indictment of his competence that he chose a team to examine development risk and omitted an expert on software, when the most significant development area involved in the TAAATS project was software development.

The Review also addressed the issues of the CAA as a Government Business Enterprise, Australian industry participation, the urgent need to replace, as an interim measure, the Rada Data Processing (RDP)facilities at Sydney and Brisbane, and a number of lesser matters, however space does not permit amplification in this summary.

Review Recommendations

The Review recommended that;

• The CA Arevert to the original ROI process and Thomson and Hughes be invited to enter specification development and pre contract negotiations. The proposed solutions of the finalists should include interim Radar Data Processing (RDP) systems for both Sydney and Brisbane and should take into account of Australian industry participation opportunities.

Comment

It is clear from the Review report that the CAA Board, having made the bold decision to update the existing air traffic system, the need to ensure minimum risk and timely introduction of the new TAAATS. Dr Edwards in an interview published in the May 1992 issue of AA, emphasised that the CAA Board had made this very clear when setting the project directives.

In attempting to meet these two requirements, the CAA management forced the pace in the final presentations to the Board, particularly the Board meeting of March 13 and in the process over emphasised the risks associated with Hughes, to the latter’s detriment.

In essence, the Review found that although the original TAAATS selection process was soundly based and competently executed by the CAA’s original evaluation teams, as the selection process progressed, it was increasingly marred by undue and ultimately crippling haste.

Whilst Mr Baldwin andDrEdwards must bear a high proportion of the responsibility for the selection process being mishandled, resulting in such a public outcry that the responsible Minister was forced to set up an enquiry, they are not entirely to blame for the whole sorry saga. Government; previous CAA Board members; and the peculiarly Australian political process must all carry a share of the responsibility.

It was perhaps unfortunate for the two executives concerned that they ended up as the scapegoats, having found themselves last in line in the ongoing saga of deferred decision making tha thas plagued the modernisation ofour archaic ATC system.

Finally, it will be interesting to see who ultimately wins the contract for TAAATSand whether that winner will be accepted by all the vested interests who forced the inquiry in the first place.