According to the project’s strategic implementation plan, the aim was to design and prototype a new student relationship information management system (SRIMS).
A steering committee for the Students@Centre project was established within the Department and chaired by Fraser, which included Martin and Aloisio.
“However, from the outset Students@Centre was about developing a product to be known as the Ultranet, which would be based on the GWSC Intranet and Oracle’s L360,” the report stated.
“In effect, it was to be a continuation of GWSC’s relationship with Oracle.”
While the project - which was dependent on Oracle’s contribution of $1.5 million in software design and development - was a collaboration between the Department and Oracle, the vendor was not paid for its services, instead bearing the costs of phase 1 (planning and scoping study) and phase 2 (development of a prototype solution).
As explained in the report, the Department then coveted the cost of phase 3 (implementation and evaluation of the prototype at a limited number of schools for a trial period).
“Anne Dalton, then a partner of a private law firm and an experienced legal adviser to government, was appointed as probity adviser to the project,” the report stated.
“In 2004, the law firm advised the Department that because Oracle was not being paid for its services as part of the Students@Centre project, there was technically no ‘purchase’ in excess of $100,000 that would require the project to be put to public tender.”
However, the law firm identified a number of significant risks with the Students@Centre project – in particular, the fairness and probity of the planned tender.
“The fundamental difficulty with the way the public tender is intended to proceed is that Oracle will have already invested a significant amount in the development of the prototype ($1.5 million) by the time the project goes to public tender and will have developed the specifications that will form the basis for the RFT...
“If Oracle has already invested $1.5 million, gained information, and established close ties with the DET, it is likely to be at a competitive advantage to other bidders and other bidders may be justifiably sceptical of their being successful in a public tender process. Even though DET intends to make public disclosures during the Agreement, it may be difficult to convince the market that anyone other than Oracle will be successful in the public tender…”
According to the report, the law firm suggested putting the whole project out to tender, including the pilot project, advising that Oracle be precluded due to having an unfair advantage over other tenderers.
However, in 2006, the Students@Centre pilot proceeded to a full scale tender with Oracle not precluded.
Oracle takes “box seat”
Consequently, the investigation concluded that Oracle was “greatly advantaged” by its participation in Students@Centre.
“Having been given what an Oracle executive regarded as the ‘box seat’, Oracle was able to identify, develop and strengthen relationships with key people in the Department who were in a position to influence the future tender process, particularly including Mr Fraser,” the report stated.
“Oracle had an opportunity to test and refine its L360 product in school settings, giving it an inside advantage over other competitors. And it owned the ‘prototype’ that was to be the basis of the future Ultranet.”
After issuing the first request for tender (RFT) in August 2007, the Department was unable to nominate a successful tenderer, apparently because the pricing submitted by the tenderers - which included Oracle - exceeded the designated government budget of $60.5 million.
In advance of the release of the tender for the project, an industry briefing about the Ultranet project was held in May 2007, with hundreds of private sector companies sending attendees, indicating a high level of interest in the project.
Aloisio attended on behalf of Oracle after leading GWSC in 2004 to contract for the vendor, despite knowledge that through Aloisio Consulting he was placed on the Students@Centre project.
“The first tender process had been an expensive failure,” the investigation stated. “It put the Ultranet project some 12 months behind schedule.”
Subsequently in May 2008, the Major Projects Committee of Cabinet asked the Minister for Education to re-scope and redefine the project to make its requirements less complex and more flexible, and to fit within a $60.5 million budget.
KPMG was engaged to carry out a market sounding for the Department to identify existing suitable software products and services, to assess whether those existing products might meet the Ultranet requirements, and to identify potential vendors.
KPMG identified 17 potential vendors and shortlisted five:
- Blackboard International BV
- Desire2Learn
- Oracle Australia
- RM Asia Pacific
- Microsoft
“Plainly, Oracle was not the only company with a product or the capacity to design and implement the Ultranet,” the report stated.
“Had the Department conducted an independent market review before proceeding with Students@ Centre, it would have known this.”
As part of the new procurement strategy, only the five shortlisted vendors would be invited to tender.
The preferred contract model was to have the successful software vendor as prime contractor, leaving the Department free to engage multiple other contractors or to manage systems integration of the Ultranet software in-house.
