ANAO slams AEC's deal with Fuji Xerox for ineffective $27.2m Senate vote counting solution

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ANAO slams AEC's deal with Fuji Xerox for ineffective $27.2m Senate vote counting solution

The Australian Electoral Commission (AEC) was forced to manually double-check all Senate ballots for the 2016 election at the last minute because a semi-automated counting solution provided by Fuji Xerox did not live up to expectations.

The Australian National Audit Office (ANAO) has published a scathing report into the ballot scanning system and accused the AEC of failing to achieve value for money, and of accepting IT security risk "above its usual tolerance".

Fuji Xerox Document Management Solutions, the printing company's business process outsourcing division, was paid a total of $27.2 million to develop and deliver a Senate scanning system to capture voter preferences from Senate ballot papers.

Fuji Xerox was the only supplier asked to quote on the scanning solution. The ANAO considered this to be direct sourcing, but the AEC argued it was an open tender because the supplier had originally competed for a place on the panel in 2014.

The scanning system was developed "in a tight timeframe, given the changes to the Electoral Act were passed 18 March 2016, the double dissolution election was announced 9 May 2016 and the election was held 2 July 2016", according to the ANAO report.

On 7 July – three days before the system was to be election-ready, and less than a month until election day – the solution had user acceptance testing pass rates of just 59 percent.

This meant the manual recount, which was originally limited to just two percent of ballot papers for quality assurance purposes, was increased to 100 percent. This resulted in “increased logistical complexity" and increased the total costs by between $6.6-$8.6 million.

Security risks

The ANAO found the Fuji Xerox’s contract did not require compliance with the Australian Government IT security framework – which the AEC accepted – but the report said was not made sufficiently transparent.

"The AEC assessed that one quarter of the applicable Australian government controls for treating security risks had not been implemented," according to the report

The AEC also waited 10 months before instructing Fuji Xerox to delete electoral data from its "non-government controlled environment".

The report also criticised the procurement process, alleging that the AEC did not have enough emphasis on “open and effective competition” to achieve value for money.

“The AEC has not demonstrably achieved value for money in its procurement of Senate scanning services,” the report said. “It has not used competitive pressure to drive value nor given due consideration to cost in its procurement decision-making.”

In the company’s response, Fuji Xerox pointed to the “very tight” three-month window that resulted in the changes in Senate voting.

“Fuji Xerox believes that the solution provided in conjunction with AEC Senate Reform team was a world-first in regards to technical and operational delivery in a very tight design, development and implementation timeframe,” said Wassim Hage-Hassan, Fuji Xerox operations director for New South Wales.

“The customised solution (both operational and technical) implemented was world-class, normally such projects take months of pre-planning and design prior to commencement of development.”

He added that the solution developed with the AEC helped deliver “high-integrity results” within the legal timeframe, and that it delivered value for money for the Australian public given the risk profile, accuracy, scale and immutable deadlines of the design, build and delivery phases of the project.

The AEC hit back at the report, with electoral commissioner Tom Rogers saying the solution was an "impressive accomplishment" against the backdrop of the Senate voting changes, which he called “the most significant reforms to Australia’s electoral system in 30 years”.

“In the extraordinarily short period of three months, and without prior warning, the AEC successfully developed and then implemented a robust, effective, technologically advanced and entirely new system for counting, under high levels of scrutiny, some 15 million Senate votes in multiple locations around Australia,” Rogers said.

He defended the procurement decision, saying the AEC "used established panels to mitigate procurement and contracting risks and to leverage off the buying power of larger Commonwealth departments and agencies".

"I am incredibly proud of our achievement to successfully design and implement the Senate scanning solution in such a short timeframe and then the successful conduct of the 2016 federal with the return of all writs in time for a government to be formed without any delay," Rogers said.

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