Laurence Millar, Deputy State Services Commissioner for ICT and government CIO has resigned following a finding that contracts between the Commission and consultancy Voco in respect of the now-abandoned Government Shared Network (GSN) were unsatisfactorily managed.
However, no fault has been found with Voco in the mishandling of the contracts or the shortcomings of the GSN project itself, says a report on the procurement and contracting arrangements by Neil Walter.
"I do not attribute any responsibility to Voco for any of the slip-ups identified," he says "They had every right to expect, as I believe they did, that the Commission would have followed the correct procedures in letting and extending the contracts."
Voco has issued a statement saying it has been vindicated by the inquiry. Doubts had been cast on the value of some of the varied strands of work on GSN for which it was contracted.
Walter emphasises that there is no evidence of "deliberate wrongdoing" from either party.
The initial contract for the design phase of the network was awarded through a closed tender, where only two other candidates for the work were considered. "It is to my mind questionable whether the closed tender process....was the most appropriate way to go," says Walter.
Asked to explain awarding the contract through closed tender, Millar replies simply "it was a mistake".
The suspect nature of that decision was compounded, Walter says, by a prior association between Millar and the company, previously known as I-Solutions. This amounted to "two small assignments", in Millar's words, which he had performed for I-Solutions in 2003 and 2004.
Millar denies being a personal friend of Voco founder and director Michael Foley as had been alleged. Their only association is of a professional nature, he says, a similar relationship that he has had with many figures in the small New Zealand ICT industry.
Subsequent contracts for implementation of the network, for a variety of consultations with stakeholders and to encourage government agencies to use the GSN were awarded to Voco without being contested.
"The decision, in October 2005 to award the first major implementation contract to Voco without going through an open tender process was both unwise and a technical breach of the Commission's Consultant's Policy in force at the time," Walter says.
The original design and planning contract was initially expected to cost up to $200,000 and was therefore regarded as a small project. The cost subsequently grew to $700,000 and as other contracts were added over the next five years, Voco eventually earned more than $8m from GSN.
A parallel report by PricewaterhouseCoopers into the GSN project itself finds a wealth of deficiencies in the management and governance of the project. It was underfunded, under-resourced and rushed and there was insufficient use of formal project management methodologies.
Walter' report also comments extensively on the failings of the project itself. The decision to declare "Project Exit" in September 2007 -- to transition from development to operational phase - was taken with a number of the sub-projects still incomplete, leading to clear dissatisfaction from even the agencies that had already undertaken to use the network.
This was "something of a line-call" says Walter. However, "I do not feel able to say that the decision was right or wrong."
An important external factor in the lack of agency interest in GSN, he says, is that its very existence had led other telecommunications providers to "sharpen their pencils" and offer government agencies some good deals, which made GSN participation look less attractive. Since the decision whether to participate is one for the individual agency, this exacerbated the unsatisfactory take-up.