Whether by the time of the meeting on 18 December 2019 between Mr Davis and Mr McEvilly, Delta and Mr Davis expected that the BMS upgrade would be put out to competitive tender, or that more than two parties would be invited to bid.
279 Both of these issues relate to the question of whether the BMS upgrade would be put out to competitive tender, or that more than two parties would be invited to bid (that is, parties other than LES and Delta) at the time of the 18 December 2019 meeting. Only the respondents contend that I am required to resolve the first of these issues, which focuses on the objective likelihood of the BMS upgrade being put out to competitive tender, or that more than two parties were being invited to bid, as at the time of that meeting. The ACCC contends this objective likelihood does not arise as something requiring resolution in the sense of its capability to be determinative in any way, because what matters is Mr Davis' subjective state of mind, not the objective state of affairs. I accept generally that this is so, because an objective assessment of a likelihood of there being more than just Delta and LES as the bidders can only have a material bearing if Mr Davis was aware of that, which is the substance of the second issue.
280 Even so, the objective position, and Mr Davis' subjective understanding are not entirely unrelated. If, but only if, Mr Davis were aware of an objective likelihood of there being additional bidders, that would tend to support an inference that he had a corresponding subjective expectation that this would occur. The ACCC therefore contends that the first of these issues should be resolved in its favour, making its case somewhat stronger.
281 Both sides agree that the second of these issues is required to be resolved, which focuses on the subjective expectations of Mr Davis and thus Delta as to the BMS upgrade being put out to competitive tender, or that more than two parties would be invited to bid, as at the time of the 18 December 2019 meeting.
282 The ACCC's case, as put in closing oral submissions, is that the united force of the circumstantial evidence points in one direction, being that Mr Davis organised the 18 December 2019 meeting because he believed at that time that Delta was in a two-horse race with LES to win the BMS upgrade and wanted to enter into a bid rigging arrangement with Mr McEvilly to ensure that Delta won that tender. The respondents point to evidence supporting a contrary conclusion.
283 The starting point in the evidence is the email from Mr Mandy to Mr Xirakis on the morning of 10 October 2019, forwarding the email from the previous day from Mr McEvilly, considered in some detail above at [182], resulting in the following conclusions:
(a) Mr Mandy's express preference was that LES be given an opportunity to compete with Delta for the Honeywell service and maintenance contract and for the BMS upgrade contract; and
(b) Mr Mandy's email is objective evidence that the NGA was at that time considering the option of a closed tender process to replace the Honeywell BMS, which would involve only two contractors, instead of a fully competitive tender, which ultimately took place in 2020.
284 The history revealed by the evidence, as considered in more detail below, is that the situation in terms of what the NGA was proposing to do in relation to the contract for the BMS upgrade contract had a degree of fluidity during the second half of 2019, going into 2020. The evidence discloses that Delta's position weakened over time, from the possibility of no tender at all with Delta being made the contractor, to there being a closed tender with Delta, LES and Schneider as tenderers, to there being a closed tender with only Delta and LES as the tenderers, and culminating in an open competitive tender process in 2020 for which both Delta and LES were unsuccessful tenderers.
285 It needs to be kept steadily in mind that this is not a bid rigging case in the sense of there being any allegation that the tender process ever ended up being rigged, let alone rigged in Delta's favour. The substance of the ACCC's case is that this was an outcome that Mr Davis (and thus Delta) sought to achieve, failing in fact to do so. If that case succeeds, it is no more than speculation as to whether the attempt could ever have succeeded had Mr McEvilly's stance (on the ACCC's case) been different.
286 In keeping with the evolving objective state of affairs, at one point, including in mid-September 2019, Mr Davis (and thus Delta) had some grounds for at least hoping that they might secure the contract without a tender process. Whether that hope was ever objectively realistic does not need to be determined, noting that there is an unknown impact on the process of the complaint that Mr McEvilly made about the approach he said was made by Mr Davis, in the sense of what might have happened with the tender process had that complaint not been made.
287 There was then a point when it might have been three bidders contemplated: Schneider, Delta and LES. On 2 December 2019, Mr Davis had been told that there would only be two bidders: Delta and LES. But that is not what ultimately took place. A critical question is whether, as at the time of the 18 December 2019 meeting, Mr Davis expected that it would no longer be a two-horse race. The substance of the respondents' case appears to be that Mr Nugraha's evidence that Mr Sitauti told him that there would only be two tenderers, Delta and LES, and that this was conveyed to Mr Davis by Mr Nugraha, does not support the conclusion that the tender would be so limited. The substance of the ACCC's case is that not only was that sound evidence of the objective position but that there is ample evidence, taken as a whole, that Mr Davis subjectively believed that to be so, and indeed was trying the obtain the substance of the position as at 13 September 2019 of there being, in truth, only Delta really submitting a tender.
288 There is in evidence a number of WhatsApp text communications between Mr Nugraha and Mr Davis, noting that the screenshots of each text show two blue ticks below them, indicating the texts were read by Mr Davis. Each text has direct relevance to the state of play as summarised in the preceding paragraph:
(a) on 25 October 2019, Mr Nugraha sent two consecutive texts to Mr Davis, both at 9.38 am:
Schneider rang NGA requesting tender docs for BMS upgrade, after hearing Honeywell is out the door.
Tava [Mr Sitauti] told me just then
(b) on 8 November 2019, there was the following text exchange between 1.56 pm and 2.45 pm:
Mr Nugraha: Little bird told me Nathan Brownell [from Schneider] had meeting with NGA
Mr Davis: No stress. We will get the job.
Mr Nugraha: No worries.
(c) on 2 December 2019, Mr Nugraha sent four consecutive texts to Mr Davis between 4.42 pm and 4.44 pm:
Tava [Mr Sitauti] just rang. Mark and Nick wanted to take NGA project to cutover to tender
Initially they wanted Schneider, ALC [that is, LES] and us.
But now only us and Tony [McEvilly].
Tava [Mr Sitauti] asked if we could send some documents that would highlight our differences to ALC [LES].
As he wants us on board.
(d) on 10 December 2019, Mr Nugraha sent two consecutive texts to Mr Davis, both at 8.55 am:
I'm meeting Tava [Mr Sitauti] this Thursday 10.00 AM at our office to discuss upgrade spec he's going to have to write for NGA
Will include you in the meeting invite
289 As described at [124]-[127] above, between the texts above of 25 October 2019 and 8 November 2019:
(a) On 29 October 2019, a meeting took place at Manteena's premises between Mr Mitton and other representatives of Manteena, representatives of the NGA, including Mr Xirakis, and certain other contractors. During that meeting the NGA BMS upgrade tender was discussed. The minutes for that meeting at item 6.10 record that Delta and LES (referred to as "Web Control", the product name of the software used in the ALC BMS that LES installs) were "proposed as likely contractors". Thus, the reference in the Monday, 25 October 2019 text to Schneider ringing the NGA and requesting the tender documents for the BMS upgrade had not, by the time of the one-hour meeting starting at 8.30 am the following Tuesday, 29 October 2019, been manifested by Schneider being added to the list of proposed tenderers. However, that took place by the next day.
(b) On 30 October 2019, an email was sent by the chair of the meeting to Mr Mitton, copied to Mr Jason Bills at Manteena, and to Mr Xirakis and Ms Dagseven at the NGA, expressly naming Steensen Varming as consultants. Mr Mitton's evidence about the email was that the NGA was seeking a closed tender process whereby only specific tenderers would be invited to apply, rather than the tender being publically advertised, that is, as an open tender (which can also be described as a competitive tender), and that the NGA was indicating by that time that it considered the possible options for BMS providers for the tender were Delta, LES and Schneider Electric.
290 The objective evidence about what took place and what was communicated by Mr Sitauti indicates that he had a good and well-informed source, most likely at the NGA itself, or perhaps instead obtained information indirectly from someone else at either Steensen Varming or Manteena. This includes:
(a) Mr Sitauti knowing about Schneider having sought the tender documents before they had been brought into existence, and before the meeting took place;
(b) by the time of the meeting, Schneider not having been added as one of the prospective closed or limited tenderers;
(c) by the time the email was sent the next day Schneider having been added.
291 On any view, Mr Sitauti was apparently well-informed. As is revealed below, while Mr Davis agreed in cross-examination that Mr Sitauti was a credible and reliable source, he endeavoured to give evidence that he did not believe a key aspect of what he had conveyed via Mr Nugraha which was adverse to his case. Mr Davis' evidence in this regard was not credible.
292 The respondents suggest in closing written submissions that the basis for the view held by Mr Sitauti as conveyed to Mr Nugraha and passed on to Mr Davis in the 25 October 2019 text above is not clear, referring to Mr Sitauti being employed by Steensen Varming and in that capacity engaged for the specific purpose of drafting the technical specifications to be used in the tender for the BMS upgrade. I do not accept this submission insofar as it suggests that the information being conveyed was somehow unreliable by reason of uncertainty as to how precisely Mr Sitauti came to have this information. Mr Sitauti was necessarily dealing with the NGA, his employer, Steensen Varming, having been retained as a consultant on the BMS upgrade tender process, and he was plainly enough conveying something that he had been told. He was someone Mr Davis regarded as credible and reliable, including in the course of his cross-examination set out below. It was a factual state of affairs, rather than anything to do with Mr Sitauti's technical expertise. The work that Mr Sitauti had been doing, for which Mr Nugraha had been assisting (apparently covertly from the NGA's perspective), with input from Mr Davis, had been directed to slanting the tender towards Delta. All of those circumstances were consistent with the two-horse race referred to in the 25 October 2019 text.
293 What is critical is how Mr Davis viewed that information, not just by way of bland assertion that there was always going to be a competitive tender, contrary to the meeting on 29 October 2019, the minutes of that meeting, and the email sent following that meeting the next day, but by way of an assessment of what he actually said, did and, it may be inferred, actually believed at the time of the 18 December 2019 meeting. That is the best means of testing the respondents' assertion that Mr Davis was "plainly right" to assert, as he attempted to do in cross-examination, that the information from Mr Sitauti that there would only be two tenderers was not reliable. This in turn will largely determine whether the respondents have a sound basis for asserting that there were always going to be five tenderers and that it was not plausible to suggest otherwise.
294 The cross-examination of Mr Davis on this topic is somewhat lengthy and detailed, but it is better to reproduce it than to attempt to summarise it and lose some of its force and effect. Excluding only some of the asides or questions that were not answered and had to be, for example, asked in a different way, the transcript records the following (remembering that the references to "Tava" are to Mr Sitauti, who was helping Mr Nugraha to slant the BMS upgrade tender specifications to favour Delta, with Mr Davis's active input and support):
You accept that you told Tony at this meeting that it would be just Delta and LES bidding?---I did.
And if I can show you where you deal with that in your 155 transcript, if you turn to page 95, please? … So that's what you said to Tony [Mr McEvilly]:
I thought it's just our two companies would be bidding.
?---Yes.
And then at - and then if you turn, please, to page 98 at line 4, the cross-examiner says:
And, in fact, I think you said before that your belief was the only two people that would be tendering for the upgrade would be yourself and Tony's company?
And you say:
Yes.
?---That's correct.
And you don't qualify that answer in any way, do you?---I don't.
And this notion that it would only be two tenderers bidding and that they would be Tony and Delta is consistent with what Tava had told you on 2 December through Mr Nugraha?---Yes.
And it's obvious, isn't it, that Tava's communication to you on 2 December was the source of this information?---Yes.
And you say you don't - as - I think you agreed with me this morning, you certainly knew at this point that Tava was working on the tender specifications so it would likely be out in the new year; correct?---Yes.
And you say in your affidavit that when you agreed in your 155 transcript that you believed that there would only be Delta and LES bidding, you now say that was a mistake?---Correct.
But having seen the text from Mr Nugraha on 2 December, and having accepted a moment ago that Tava is the source of this information, it's obvious, isn't it, that that's where this information that you relayed to Tony at the 18 December meeting came from?---Sorry, can you repeat that?
Yes. Having now looked at Hendra's [Mr Nugraha] 2 December text, it's obvious, isn't it, that what you told the ACCC in December 2020 was not a mistake, because you did believe that only two competitors would be bidding, being LES and Delta?---I - I'm - I'm sorry. I - I - I - I don't understand the question.
Okay. I will take it in steps. Tava had told you through Mr Nugraha on 2 December that there would only be two companies bidding for the tender; correct?---That's correct.
And it was LES and Delta?---Correct.
And you accept that that is the source of the information that you related to Tony at this meeting?---Yes.
And it was your belief at that time that that information was true?---No.
It was, wasn't it, because as we've now discussed a few times, you regarded Tava as a credible source?---Yes.
He was reliable?---Yes.
And you, in October, changed your priorities to get that contract signed as quickly as possible because of what he told you about Schneider?---I don't know I changed priorities, but I - I wanted to sign the contract, yes.
And what I want to suggest to you is you trusted what Tava told you and you relied on it?---Yes.
And you believed it?---No.
Well, you say you trusted Tava - what - you trusted what Tava told you and you relied on it, but now you say you don't believe it. And what I want to suggest to you is that's inconsistent?---Well, I disagree.
And whether you believed it or not, the information that Tava conveyed via Hendra's 2 December text was your best source of information as to who would be invited to tender at this time?---I'm sorry. Can - can you repeat that?
Yes. The information that Tava conveyed through Hendra's 2 December text was your best source of information as to who would be invited to tender at this time?---I think the word "best source" is - I - I'm - I - I'm not quite sure your definition of what you mean there. Can you sort of - - -
Did you have multiple sources of information as to who would be invited to tender at this time?---No.
No. You only had one, didn't you?---Well, other than my own opinion.
You had Tava; correct?---Tava, yes.
Yes. And Tava, therefore, was your best source of information, I suggest?---Yes.
And if I can then show you page 91 of the transcript - the 155 transcript, I should say - at line 13. At line 13, you were asked whether you and Tony discussed anything more about the upgrade contract. And you said this at line 15:
I suggested to Tony that, potentially, there might be a way that I could find a way to compensate him for money that he may have lost on the back of the contract.
You see that?---Yes.
…
Now - so you're clearly talking there about money that he would have lost on the back of the upgrade contract, aren't you?---No.
Well, just - what you say is - I suggested to Tony that potentially there might be a way that you could compensate him for money that he would have lost on the back of the contract, and so that's the - you see in the question before that the question is:
So when I say the contract, I mean the upgrade contract.
… In line 13, you see the question starts:
Did you discuss anything more about that contract.
?---Yes.
And the cross-examiner clarifies which contract he's talking about. He says:
So when I say that contract, I mean the upgrade contract.
?---Yes.
And the answer you give in 15 is in relation to the upgrade contract?---Yes.
And what you're saying there is that you were looking to find a way to compensate Tony for money that Tony would have lost on the back of the upgrade contract?---No.
Well, you obviously are, I suggest?---No.
295 I am unable to accept the denials that are in bold, nor that Mr Davis was mistaken when he agreed in his s 155 examination that he believed that only Delta and LES would be bidding. First, the contrary conclusion would entail finding that Mr Davis deliberately lied to Mr McEvilly about what he believed was taking place. It is not apparent what he or Delta stood to gain by such a lie. Secondly and in any event, even if there is some credible explanation for that, the propositions put in cross-examination and denied are plainly both logical and well supported by the evidence and established circumstance by which the questions were framed, most particularly the s 155 examination transcript evidence. The account that Mr Davis gave at his s 155 examination that he believed only Delta and LES would be bidding for the BMS upgrade contract must be accepted and preferred over his much more recent recantation of having that belief at that time.
296 Those conclusions are buttressed by the following evidence and cross-examination as to an alternative version that Mr Davis now puts forward about what he was referring to in offering, in effect, to compensate LES for a loss of profit margin on a contract. At his s 155 examination, he accepted that he was referring to LES missing out on a profit margin on the BMS upgrade contract; but in his affidavit he deposed to having referred to LES missing out on a profit margin on the Honeywell BMS service and maintenance contract. This alternative account was revealed in cross-examination as not being remotely credible.
297 In cross-examination, Mr Davis accepted that the loss of profit margin if LES did not get the BMS upgrade contract would mean that any compensation for that would have to be substantial, but denied, most unconvincingly, that when he said in his s 155 examination:
Well, I said words to the effect that perhaps I could add some margin onto my price in relation to the BMS upgrade that he may have otherwise now not got.
and
Well, if he's not going to win the job, he's going to miss out on margin, and I suggested that maybe that margin that he's going to lose I could add to my price.
that he was referring to the margin that LES was going to miss out on by losing the BMS upgrade contract.
298 In his affidavit at [146], Mr Davis gave a subtly tweaked, but significantly different, account of what he had said to Mr McEvilly at the 18 December 2019 meeting, namely:
Maybe I can do something to pay you the margin you might have lost by us getting the service contract.
This was plainly enough a reference to the Honeywell BMS service and maintenance contract.
299 Mr Davis was convincingly cross-examined on this, accepting that the Honeywell BMS service and maintenance contract was uncommercial, which was a concession that was effectively impossible to avoid in light of his evidence that this was only a contract of value because of the better position it would put Delta in for obtaining the BMS upgrade contract. However, Mr Davis implausibly resisted the conclusion that he could not have been referring to that contract because there was no profit margin for LES to have missed out on, so as to be compensable. Perhaps most tellingly, it was put to Mr Davis that in the portion of the s 155 examination reproduced above, he was not referring to the maintenance contract as he used future tense by referring to a margin LES was going to lose, noting most importantly that LES had already lost the service and maintenance contract at this point. This logic means that this account of what Mr Davis deposed to saying to Mr McEvilly about margin compensation being directed to the Honeywell BMS service and maintenance contract cannot be accepted. Based on context and logic, it is readily apparent Mr Davis was referring only to the BMS upgrade contract.
300 The respondents point to contrary evidence, dealing directly only with what is said to be evidence that the BMS upgrade contract was always going to tender, rather than grappling with the evidence as to Mr Davis' subjective expectation, relying upon little more in that regard than his recantation of in fact having any such expectation as he had relayed in his s 155 examination. The problem with this approach, as already noted, is that the objective situation can only be of real probative force in relation to that subjective expectation if Mr Davis was aware of it, such that it contradicts the direct evidence just referred to as to that expectation. The respondents seem to argue to the contrary upon the primary basis that the notion that only LES and Delta would ever have been asked to bid for the BMS upgrade contract was inherently implausible; and secondly by endeavouring to discount the evidence of Mr Nugraha and rely upon the evidence of what are said to be more commercially oriented witnesses, including Mr Davis himself.
301 The first hurdle that the respondents face is the 9 October 2019 email from Mr McEvilly that Mr Mandy, the Head of Building Services at the NGA, forwarded to Mr Xirakis at 7.54 am on 10 October 2019, in which he indicated a preference to give LES an opportunity to take on the Honeywell BMS service and maintenance contract and then, as needed, involve both LES and Delta to provide pricing for the replacement of the Honeywell BMS or "go to the market". Mr Mandy, variously described as the Head of Building Services at the NGA in records of the NGA, the Head of the Maintenance Division at the NGA (by Mr McEvilly in his affidavit at [60]), and later the contact person at the NGA in addendum 2 for the tender for the BMS upgrade, and therefore a senior officer at the NGA, was plainly enough contemplating the options of either a limited or open tender for the BMS upgrade, which contradicts the respondents' submission that a limited tender was inherently fanciful.
302 The respondents submit that at its highest, the 9 October 2019 email from Mr Mandy suggests that it may have been contemplated that certain stages of the "cutover", essentially confined to work concerning the temporary exhibition gallery (TEG), would be limited to Delta and LES. In line with my reasoning below, I reject this submission.
303 There was only ever one contract to replace the Honeywell BMS, albeit comprising various parts. What may be readily seen to matter for the integrity of government procurement processes is a sufficiently competitive process, not necessarily an open tender. If that was not so, it is inherently unlikely that Mr Mandy would have raised a limited tender with just Delta and LES as a serious possibility. It is not to the point that this did not ultimately transpire, given that this was evidently being canvassed as a serious possibility within senior ranks at the NGA. I therefore reject the respondents' submission that the evidence establishes that the BMS upgrade tender could never have progressed on a limited basis, with only LES and Delta being invited to tender, rather than always having to involve either an open tender or more than two tenderers. The evidence simply does not support a limited tender being a fanciful proposition as at the time of the 18 December 2019 meeting, let alone an outcome that Mr Davis subjectively did not expect would take place, as he indicated to the contrary in his s 155 examination.
304 The respondents attack the ACCC's reliance on Mr Nugraha's evidence as part of its case that Mr Davis held a subjective expectation of a two-horse race upon the dual basis that he was likely referring to only part of the BMS upgrade relating only to the temporary exhibition gallery, not the entire contract, and that he lacked commercial expertise. However, that attack is somewhat misconceived and in any event does not take matters very far in light of the foregoing.
305 The respondents' reliance on Mr Nugraha referring in cross-examination only to the temporary exhibition gallery, not the entire contract, is, upon closer examination, built on a particular reading of that evidence to the effect that his answers should not be taken literally. The suggestion seems to be that there was in contemplation some kind of split in the BMS upgrade, with the temporary exhibition gallery being separate from, rather than a part of, the entire BMS upgrade contract. If that is what is being suggested, there does not seem to be any sound foundation for it.
306 Mr Nugraha was cross-examined on the draft of the email to Mr Sitauti that he had sent to Mr Davis on 19 September 2019, which was, with that input, sent to Mr Sitauti to facilitate the slanting of the BMS upgrade tender specification in Delta's favour. The relevant parts of that draft email are reproduced above at [160]. It is convenient to reproduce again the relevant passages, with different emphasis added:
From both Steve and my point of view, we both believe the Temporary Exhibition Gallery (TEG) plantroom should be our first one to cutover as it addresses a) current Manteena's TEF dehumidifier project, b) establishes Delta's presences on-site and c) the current exhibition (Contemporary Worlds: lndonesia) is due to finish on 27/10/2019 and this would give us enough time to prepare the contract, documentation, programming, graphics, procurement etc.
Also before our first cutover, we need to establish the enteliWEB server first to ensure visibility is maintained at all times.
307 This is clearly enough referring to a single contract to replace the Honeywell BMS, to be performed in stages, with the first to change over from the old system to the new (that is, cutover), being the temporary exhibition gallery, rather than two separate contracts, with Mr Nugraha proposing that this process would commence with the first "cutover" in about six weeks. That is inherently inconsistent with any tender process, let alone a competitive tender process.
308 The respondents contend that when Mr Nugraha was cross-examined on the part of the email that refers to "prepare the contract, documentation, programming, graphics, procurement etc", his evidence was that he was referring to proposal documentation rather than the contract itself, confined to the temporary exhibition gallery part of the project. That is undoubtedly correct but really goes nowhere, or at least not very far at all, on the question of a tender process involving additional tenderers to Delta and LES. At this stage in September 2019, Mr Davis and Mr Nugraha both (perhaps somewhat optimistically) assumed, or at least hoped, that Delta alone would be awarded the work of replacing the Honeywell BMS with the Delta BMS: see [163(b)] above. That assumption was dispelled by the time of the conversation between Mr Nugraha and Mr Sitauti, of which Mr Davis was advised by text by Mr Nugraha on 2 December 2019. Mr Sitauti told Mr Nugraha about a tender process involving just Delta and LES, forming the basis for that from Mr Nugraha to Mr Davis to that effect on that date: see [164] above.
309 Further, the ACCC submits that Mr Davis' evidence in cross-examination regarding Mr Nugraha's draft email of 19 September 2019 was implausible. The suggested implausibility is said to have arisen because Mr Davis said he shared Mr Nugraha's view that the BMS upgrade was not going out to tender, but he later resiled from that evidence. The respondents submit he did no such thing as the initial agreement only related to the upgrade works at the TEG. That is, Mr Davis did not expect a tender for the works at the TEG. I reject the respondents' characterisation of Mr Davis' evidence:
(a) not least because I have rejected the submission that there was ever going to be a split in the BMS upgrade contract, with the temporary exhibition gallery being separate from, rather than a part of, the entire BMS upgrade contract; and
(b) also due to the fact that Mr Davis as Mr Nugraha's superior did not correct Mr Nugraha's proposal by suggesting that the work of replacing the Honywell BMS could not commence in six weeks was unrealistic, if not wholly fanciful.
310 The ACCC submits, and I agree, that it is apparent from this circumstance that as of 19 September 2019, Mr Davis shared Mr Nugraha's assumption, or at least hope, that there would not be a formal competitive tender for replacing the Honeywell BMS.
311 A further part of Mr Nugraha's evidence in cross-examination was the following question and answer:
In any event, in September and October 2019, what you were expecting would occur was that Delta would be asked by Manteena or the gallery directly to quote for the replacement of the Honeywell BMS and that Delta would not have to compete in a formal competitive tender for that work?---Yes.
312 The respondents submit that it is unclear by this evidence whether this referred to the pricing of the temporary exhibition gallery, or the BMS upgrade as a whole, characterising this as being inconsistent with Mr Nugraha's WhatsApp text to Mr Davis on 25 October 2019, reproduced above at [288(a)] along with other texts:
Schneider rang NGA requesting tender docs for BMS upgrade, after hearing Honeywell is out the door.
313 Two points may be made about this submission. First, the period being referred to in the question and answer relied upon is the point in time when both Mr Davis and Mr Nugraha were at least optimistically hopeful of there being no tender process at all. Secondly, the beginning of the end of that hope seems to have taken place with Schneider requesting tender documents, before a tender process itself of some kind had been decided upon. The question and thus answer is only technically inconsistent in that context if "in September and October 2019" is read as meaning, and being understood as meaning, "in September and all of October 2019", rather than its more obvious meaning of referring to an expectation that existed in that period, but not necessarily from the beginning of September to the end of October.
314 It follows that the respondents' analysis of Mr Nugraha's evidence in cross-examination does not afford them the assistance that is asserted to be derived from it.
315 The respondents' argument also points to the size of the contract as finally tendered for, and to assert that a contract of this value at a prominent public institution such as the NGA was never going to be limited to only two tenderers; and that in the real world, any organisation that had the capacity to meet the contract requirements was going to be invited to submit a tender response. The answer to this is that whether or not that is correct, being a set of assertions based on some kind of common sense reasoning rather than evidence, that was not what Mr Davis told Mr McEvilly, nor, what I conclude he believed at the time of the 18 December meeting.
316 It is also inconsistent with the events around 13 September 2019, when Mr Davis did not know if a competitive tender would be mandatory, per his affidavit at [58]. As I have found, Mr Davis at least thought it was possible at that time that there would be no tender process, even if he thought that was likely, and his evidence was that he was very confident at that time of getting the BMS upgrade work, which I have found was not a confidence shown to be held in relation to a competitive tender process. Entrepreneurial businessmen are not to be assumed to have the highly risk averse instincts of careful lawyers, or the prudential instincts of an archetypal public sector preference for accountability over efficiency. They take risks, take advantage of circumstances and seize opportunities. It is also not consistent with the objective documentary evidence at the time, as referred to in some detail in these reasons.
317 It is also important to have regard to the email sent by Mr Nugraha on 3 December 2019, the day after his WhatsApp text to Mr Davis advising of a limited tender involving just Delta and LES. This email and events that flowed on from it works to provide some additional context to Mr Davis' beliefs at the time. That email contained design language that was written by Mr Nugraha and approved by Mr Davis to help to prevent LES and only LES from winning the tender, if adopted by Mr Sitauti in drafting the design specifications in a way that slanted them in favour of Delta. There was no mention or consideration in that email of any other BMS providers. To the contrary, the opening sentence of the email is:
As discussed this morning, below are some of the key advantages we have over Automated Logic System [that is, LES]:
318 This was clearly a ramping up of Delta's efforts to secure the BMS upgrade contract, with not just Mr Davis' knowledge, but with his active input. Mr Davis had been successful in obtaining the Honeywell BMS service and maintenance contract and this was the next phase for when that BMS was replaced. As the ACCC correctly point out in their closing written submissions:
(a) Mr Nugraha conceded that the specification language that he proposed and Mr Davis approved with modifications, if it was adopted in the tender specification, would have the effect of preventing LES from winning the tender, remembering that it was essentially a negative assessment of the ALC BMS;
(b) Mr Nugraha said that he proposed that language, as approved with some modification by Mr Davis, because he was concerned that Delta might lose the tender to LES;
(c) Mr Nugraha accepted that LES stood "a very good chance of winning the tender";
(d) on 12 December 2019, Mr Davis and Mr Nugraha met with Mr Sitauti at Delta's offices, with the intention being to discuss the way in which the BMS upgrade tender specification could be drafted in a manner that favoured Delta over LES - that issue was not ultimately discussed because Mr Sitauti had to leave.
319 The 12 December 2019 meeting between Mr Davis, Mr Nugraha and Mr Sitauti, which was just under a week before the 18 December 2019 meeting between Mr Davis and Mr McEvilly, in also somewhat inconsistent with Mr Davis' evidence in cross-examination that he did not particularly trust Mr Sitauti's advice with regards to Delta and LES being the only two tenderers by that stage.
320 These targeted acts against LES, in combination with the 18 December 2019 meeting between Mr Davis and Mr McEvilly suggests a degree of concern, if not desperation, on Mr Davis' part that Delta was getting outplayed by LES given that they had won a BMS tender of a similar value at the NGA. The objective evidence is inconsistent with Mr Davis believing that it was likely that there were going to be tenderers other than Delta and LES by the time of the 18 December 2019 meeting.
321 Moreover, as the ACCC also point out, a month after the 18 December 2019 meeting, on 21 January 2020, Mr Sitauti told Mr Nugraha that Steensen Varming was rewriting the technical specification for the BMS upgrade to advantage Delta. Mr Nugraha properly conceded that it would necessarily follow that the document was being drafted in a way that would disadvantage LES. On 23 January 2020, Mr Nugraha redrafted part of the NGA's client brief for the BMS upgrade. Mr Nugraha added comments to the document that would allow the specification to be drafted in a way that would favour Delta and disadvantage LES.
322 Finally, and for completeness, the respondents point to and rely upon the following evidence. First, prior to the lengthy cross-examination reproduced above, which addressed what Mr Davis had said in the course of his s 155 examination, it was put to him several times that the approach by Schneider to the NGA to obtain tender documents before any such documents existed, conveyed to him by Mr Nugraha in the 25 October 2019 WhatsApp text, reproduced above at [312], that this increased the risk of the BMS upgrade being put out to a full competitive tender. He responded that the NGA was always going to be put out for a full competitive tender. That evidence was comprehensively discredited by the later cross-examination reproduced at length above. It therefore cannot be accepted as reflecting Mr Davis' genuine state of mind at the time of the 18 December 2019 meeting.
323 Secondly, Mr Mitton deposed to telling Mr McEvilly in late November 2019 that the BMS upgrade was to be the subject of a tender process, an assertion that Mr McEvilly denies. I have already indicated that I prefer and accept the evidence of Mr McEvilly in that regard, because of Mr Mitton's unreliability as to timing. The same conclusion applies to Mr Mitton's evidence of being told this by Mr Xirakis. Nor does the NGA stance assist, having identified Delta, LES and Schneider as options for a tender by 30 October 2019, because the evidence is that by 2 December 2019, per the text from Mr Nugraha to Mr Davis on that date, the NGA no longer wanted Schneider to tender, and only wanted Delta and LES. Nor does the involvement of Manteena assist, as they would have been involved whether any tender was involved, a limited tender, or an open competitive tender.
324 Reliance by the respondents on the ultimate outcome of a competitive tender involving more than two tenderers, what was said about that in the 2020 tender documentation, and what happened in relation to the National Library are similarly of no real assistance, especially in the context of the evidence already discussed.
325 The most fundamental defect in the respondents' argument is that it fails to engage with the substance of Mr Davis's evidence in cross-examination, especially as to what he said in his s 155 examination.
326 Sifting and weighing all the evidence, I am satisfied on the balance of probabilities that, at the time of the 18 December 2019 meeting, Mr Davis did not subjectively expect that there was going to be a competitive tender for the BMS upgrade, or a tender that would involve more than two parties, that is, anyone other than Delta and LES.
327 Additionally, and to the extent it matters, I am unable to be satisfied that the evidence establishes that, as at the time of the meeting between Mr Davis and Mr McEvilly on 18 December 2019, it was objectively likely that the BMS upgrade would be put out to competitive tender, or that more than two parties would be invited to bid. The minute of the meeting on 29 October 2019 records only LES and Delta as proposed contractors. A less formal email the next day, 30 October 2019, suggests that Schneider had been added as a third proposed tenderer, but the obviously well-informed Mr Sitauti had indicated by 2 December 2019 that this was only an initial conclusion, and had not been maintained. That was consistent with Mr Davis's evidence at his s 155 examination. Therefore, in addition to my finding above that Mr Davis' expectation that there was not going to be a competitive tender or a tender with more than two parties being invited to bid, I find that his expectation aligned with the objective likelihood at the time of the 18 December 2019 meeting. It is not to the point that this was later changed to a competitive tender, or at least one with more than two parties invited to bid, for reasons that may have included Mr McEvilly's subsequent complaint about Mr Davis' behaviour at that meeting.