NBN Project Failure Analysis

This assignment analyzes the failure of Australia's National Broadband Network (NBN) project. It details the initial success of the project followed by its downfall due to political changes, lack of stakeholder engagement, and management issues. The analysis highlights the importance of sustained political support, stakeholder involvement, and effective project management for large-scale projects.

Project Management: Critical Analysis of the national Broadband
network Case
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Executive Summary
This critical analysis and review of a major public project, the NBN project and why despite using
sound practices that align with PMBOK guidelines, the project is still a failure from a project
management perspective. Its initiation was good, stakeholders were brought aboard, an organization
was set up to manage the project making it a project oriented management team. Clear goal and
objectives were set, along with budgeting. Project management principles were used, including
procurement of services and contractors and tools such as supplier evaluation and appraisal used.
Quality standards were set; however, one crucial mistake entailed not involving all stakeholders
across the political divide and managing the risk of a change of government, because this is what
exactly happened and led to the failures of the massive project. The recommendations after the
analysis is that project management principles should not only guide the project but be actively and
faithfully practiced, including stakeholder management, scope management, and risk management
with project management aids such as software tools, in order to achieve the project objectives and
deliverables.

Table of Contents
Executive Summary..............................................................................................................................2
Introduction..........................................................................................................................................4
Organizational Context.........................................................................................................................4
Project Requirements and Deliverables................................................................................................5
Methodologies for Tendering...............................................................................................................7
Contract formation, administration, negotiation and dispute resolution..............................................9
Contract closeout and project handover.............................................................................................11
Findings and Recommendations.........................................................................................................12

Introduction
The national Broadband Network (NBN) Australia is the largest publicly funded project ever
undertaken in Australia. Because of its scope and nature, it is worth understanding how the project
has been managed, in the context of project management to learn and gain new insights. The project
has been termed a ‘Failure’ in as far as project management goes; the objective of this paper is to
critically analyze the NBN project in the context of project management principles. After this brief
introduction, the paper will discuss the organizational context of the project that will provide the
project details in order for the context of this analysis to be better understood. After discussing the
organizational context, this paper delves in the project requirements and deliverables definition and
a critical analysis is made of the tools and processes the project team used to define them. The
persons involved in the definition of requirements are discussed as well as the tool utilized in
ensuring all requirements had been captured. This is then followed by an analysis of the contract
negotiation, administration, and dispute resolution mechanisms of the project before the project
close out and handover is discussed.
Organizational Context
The NBN is a wholesale, Australian open access network for data that allows almost all households
to access fast broadband internet from wired and wireless networks. The project is owned and
operated by the national Broadband Network Company and works by having RSPs (Retail Service
Providers), mostly ISPs Internet Service Providers) provide connections to end users (households
and organization) after signing contracts with the NBN Company. The NBN project was envisaged
to guide Australia into the Information Age and replace the existing copper wire telephony network
that was approaching its end of life. The project was envisaged by the Australian Authorities in
appreciation of the fact that internet demand, especially fast speeds for multimedia internet access
was rapidly growing and the existing copper network could not guarantee such speeds. The unique
case of the project is the massive changes in scope after a different administration than the one that
initiated it was elected into office. Originally, it was envisaged to provide speeds of at least 100
Mega bits per second that would be increased to 1 Gigabits per second; however, these were
subsequently downgraded to at least 25 Mega bits per second. Initially, it was envisaged to be a
fiber optic national network to serve 93% of the Australian population with 100 Mbit/s speeds while
far flung areas would get access through fixed wireless telecoms satellite, which has since changed
to a mixed media model incorporating copper and FTTN (fiber to the node) (Holznagel 2010),
(Sorensen & median 2016).

Project Requirements and Deliverables
The initial scope of the project was to have a national Fiber Optic telecommunications network that
would be the primary means for providing most of the Australian population with fast broadband
speeds of at least 100 megabits per second, that would then be upgraded to the faster 1 Gigabits per
second speed. 93% of the Australian population would be connected using this method of fiber to
premises. The remaining 7% of the population not covered by the NBN would be connected to the
NBN through radio communication. The components of the radio communication network included
the use of 4th generation LTE (Long term Evolution) fixed wireless connection as well as Sky
Muster Geosynchronous telecommunication Satellites. The project was conceived and planned in
2007 when the labor party was in opposition; the project would cost A$ 15 billion wit the
government providing A$ 4.7 billion it would partly raise by selling its (governments)stake in
Telstra. After the labor government under Rudd was elected in 2007, the project was initiated with
the aim of service delivery to premises using the FTTN model that would reach 98% of the nations’
population. The NBN was incorporated in 2009 as company under the Australian Corporations Act
of 2001establised as a Government Business Enterprise based on the 1997 Commonwealth
Authorities and Companies Act. The Company was set up as a wholly owned by the Australian
Commonwealth with shareholding represented by the Ministries of Finance and the Ministries of
Broadband, Digital Economy, and Communication. This is in line with best practices of forming a
project driven/ oriented company so that at its initiation, its culture and organization was project
driven, consistent with the PMBOK guidelines for project driven organizations (Sorensen &
Medina 2016).
Initially, the project was conceived by the Government (initially opposition members) and
operationalized after being elected. The government became the project sponsor and a company was
formed to run the project. The requirements definition was undertaken by technology experts that
advised the government, therefore the process was done as per project management guidelines
where user requirements are evaluated by professionals in the ICT industry, working with and
advising policy makers, that in this case is the government, on behalf of the population (Sorensen &
Medina 2016). . The project company was formed with a board headed by a CEO and a board
chairman, working with various directors. Consistent with the principles of project management and
the PMBOK guidelines, the project deliverables and requirements were set by the project sponsor,
who in this case is the government on behalf of the citizens and represented by the CEO of the NBN
Co. The project board is its executive committee, formed to give support and guidance and ensure
that the project meets its set objectives. To develop the project deliverables and user requirements,
the company has various technical people, including customer representatives, customer officers,
architects, systems engineers, strategy advisors, all who collected the views of citizens and

stakeholders involved in the massive project to establish the use requirements and set the tone for
project deliverables. At its initiation, the project used sound methods as proposed by the PMBOK or
setting up the organization and determining user requirements and deliverables (Holznagel 2010).
A project governance team and project board, along with tools for project governance were used in
the initial phase. The project requirements were validated and verified by defining the life cycle
deliverables of the project, plans for managing change and change control, user acceptance
requirements, installation and testing plans, and a risk management plan. This was done well at the
initial phase when the project was commenced. The user requirements would be validated through
the network design and throughput speeds as stated in the user requirements. However, a change in
government greatly affected the user requirements analyses and management, with massive changes
to the project being politically instigated, without considering the requirements of the users. In a
way, cost was the overriding factor in making the changes, but being a massive public
infrastructure, politics played a major role in the massive scope, project requirements and
deliverables changes. The author believes stakeholder management was not effectively done; all
stakeholders (political groups representing Australians) should have been consulted and a united
front developed before project initiation. Subsequent changes led to very poor decisions that did not
reflect what users wanted, leading to several black spots where there is no broadband Internet yet
the project was supposed to provide all Australians with fast broadband internet using fiber. These
changes were made without consultation and using project management frameworks, such as scope
control and management. Crucially missing in the NBN organization structure (shown below), is an
overall project manager, with technical persons and line manager reporting to the CEO instead of a
project manager

Methodologies for Tendering
I getting the project rolling, the NBN Co through the Australian Government openly announced
tenders for the building of the NBN network was floated by issuing an initial RFP (request for
proposal). However, the RFP was not proceeded with because the because the organizations that
wanted to participate in the project did not meet the set requirements to undertake the project.
Further, the companies went ahead and lodged complaints because the RFP did not proceed, despite
not being able to raise the requisite capital. In issuing an initial RFP, the NBN Co was engaging in
best practices for such a kind of project that would involve the use of public funds. Because of the
project quality requirements for the project, tendering was the best way, after the technical and
financial teams of the NBN Co developed what would be required for the successful delivery of the
project. Tendering gives every one an equal chance an opportunity to participate in the tender and
after submitting their tender documents, they can be appraised based on the project performance,
scope, quality, and financial requirements and the best person given the contract.
In the NBN case, none of the available organizations met the requirements given in the initial RFP,
and eventually, the largest telecommunications operator in Australia, partly government owned,

submitted a a non-compliant proposal, which is the best they could manage under the
circumstances. The project is so massive and complex, with an initial budget outlay of A $ 40
billion; most organizations would not meet the requirements as set out in the RFP to undertake the
project, especially on capacity (technical) and financial (Holznagel 2010). As for the supplies, the
NBN Co also issued tendering to purchase/ procure inputs and materials, works, and other services
through open tendering system. The author believes this is in line with best practice principles in
project management where projects seek to obtain the best possible supplies and materials, as well
as contractors that will ensure the highest quality standards products at the most competitive/ lowest
cost. The evaluation of service providers and suppliers was done best on the best practices method
of evaluation and appraisal to ensure every possible provider and sub contractors met the
requirements. Because of the long term nature of the project at the initial phase, it was decided that
leasing for the major networks was not viable, given that it was a public infrastructure project.
However, the eventual mode of operation would be that NBN Co would provide wholesale services
and products and ISPs would then provide the end connection to customers as retailers of the
products or services. In the pursuit of successful projects execution and to ensure a cost effective
project is delivered. In the process of these pursuits, it is inevitable that goods and services will be
procured during the execution of the project.
The objective of these pursuits can be achieved only using contracts that is oral or written (the latter
is preferred); the contract must be binding legally and defines the duration, relationship, extent, and
nature of the services to be provided as well as the nature of the works to be done. In developing the
contract terms, the considerations as well as terms and conditions need to be clearly defined along
with the process for the acquisition of the desired products and services, which should be
procurement. To procure such items, tenders are issued publicly so that all interested parties have an
opportunity to show what they can do. Because of resource scarcity and the complexities of projects
of the NBN magnitude, along with long lead times, the only to manner that procurement procedures
and parties can be bound legally and have obligations recognized by law is through contractual
documents and agreements. The NBN Co therefore acted in the best interests of the organization
and the public through issuance of tenders and tender requirements as well as procurement
management. Despite no company meeting the initial RFP requirements, the act of tendering for
such works and setting high requirements set the standards for the required levels of quality and
performance that future participants in the project would have to aspire to or to meet. Quality is
among the crucial components of successful projects; the tendering documents and standards issued
by the NBN Co set the required quality standards for the duration of the project. The methods and
tools used in the NBN project, such as setting requirements during the initial RFP, evaluating
bidders based on the tender documents, setting up a committee to manager risks, and inviting

members of the general public to express their interest were highly suitable for the complexity,
nature, and type of the contract as well as the environment, given the complexity and long lead
times involving the use of tax payers money.
Contract formation, administration, negotiation and dispute resolution
The Australian government first set up the NBN as a Company to form the NBN Co and this forms
a basis for how NBN Co can manage and enter into contracts. Being a public body, the NBN Co is
obliged to operate under the Commonwealth Authorities and Companies Act of 1997 that stipulates
how such organizations must formulate and manage contracts. The regulations are aimed at
ensuring the best value for money is attained, as well as getting the right outcome. The NBN Co
negotiated and signed contracts in adherence with the ANAO (Australian national Audit Office)
standards for best practice as well as its conditions. The contracts entered into either for the
provision of products or services must be done under the existing policy and legal frameworks,
including the 1997 Australian FMA (Financial management and Accountability) Act and the 1997
CAC (Commonwealth Authorities and Companies) Act. The NBN Co was required under these
legal frameworks to use the CPGs (Commonwealth Procurement Guidelines) as directed by the
Minister of Finance. The CPGs have a whole life money value component that is at the core for
public procurement. These are important for guiding procurement of bodies/ Commonwealth
companies such as the NBN when procuring for services and products from the public. The NBN
Co largely complied with these requirements throughout the project, starting with the initial RFP. In
developing and negotiating contracts, the regulations and law require that the organization seeking
products and services form the public does due diligence and then develops a framework for
identifying and managing risks.
Further, it is essential that in the development and negotiation for contents, the involvement and
commitment of the senior management within the organization is obtained. The resource needs need
to be identified and documented, a well as the assigning of responsibilities. The input from
stakeholders must also be sought before the contracts are drafted. The NBN largely complied with
all these requirements and processes as stipulated by law and fulfilling the best practices and
recommendations from the PMBOK, according to Cordoba-Pachon and Ochoa-Arias (2010). The
NBN Co has three major committees, including one that deals specifically with risk management
for the project. The NBN developed contracts that included mechanisms for performance
management regimens and developed a plan for managing the contract; all these were undertaken
ethically. Further, as stipulated by law and the PMBOK, the contracts must be documented,
something the NBN Co has done well. Before formalizing contracts, the risks must be identified

and risk treatments undertaken. Negotiations can be done in several ways, and none is the absolute
right one; however, in fulfilling the procurement requirements for the project and regulations, all
contract negotiations must be undertaken formally and documented, after undertaking a thorough
risk assessment. The relevant contract manager must be involved in all aspects of the contract
negotiation; the NBN Co has a Chief legal Counsel within its organization, as well as a Head of
Regulatory Affairs to effectively manage issues of contracts and ensure the NBN does not become
exposed to legal issues at a later date due to acts of commission or commission. Negotiations for
various NBN Co contracts were done after defining and agreeing on contract conditions and terms
that formed the negotiation focus. Necessary resources were committed to aid the negotiations and
roles and responsibilities for the people negotiating the contracts established. Barriers and problems
to the negotiations were identified, along with opportunities and mechanisms developed on how the
issues of constraints and objectives and senior management/ government principals involvement
were to be addressed. Conflicts were resolved through a dispute resolution committee and the risk
management team.
The NBN Co largely complied with the ANAO regulations and the best practices and guidelines
stipulated by the PMBOK. Conflict resolution with various partners and stakeholders is absolutely
essential in any project, including managing conflicts with employees (human resources). The NBN
Co developed an elaborate document stipulating how conflicts will be resolved between the
company and employees and their union, as well as how conflicts with other stakeholders, including
the partners and contractors would be solved. Further, its risk management committee helped in
resolving disputes and conflicts, even within the project team. Based on the PMBOK guidelines,
there are five methods of resolving conflicts and they include avoidance/ withdrawal,
accommodating/ smoothing, compromising/ reconciling, forcing/ directing, and collaboration/
problem solving. The risk management committee uses the method of conflict avoidance which is a
neutral/ neutral position as it essentially involves letting others resolve the conflict or postponing
issues. Further, collaboration and problem solving was used extensively in the project, which
according to the PMBOK, results in a win/ win situation (Holznagel 2010). However, the biggest
weakness of the project and why it has been described as a massive failure considering its initial
objectives and scope, is that the initiators did not consult the public widely, especially other interest
groups/ political entities. The project was initially opposed, ut the then government forced it, only to
lose elections and have the new administration completely change its scope and objectives, as well
as deliverables; this is a form of a win/ lose, lose/ win situation that has not helped the project
much.

Contract closeout and project handover
The project scope was changed drastically, courtesy of a new government coming into power, with
the deliverables and objectives also radically changed. The project is not yet completed, and the
initial deliverables and objectives were thrown out of the window, in favor of ‘basic deliverables’
such as lower internet speeds. While the project execution period was expected to be long, it has
significantly overshot its time schedules and the budget, despite the project objectives and
deliverables being changed because of budget concerns. Almost a decade to its inception, the
project is incomplete and has not delivered even a third of its initial objectives and deliverables.
Measuring the attainment of project objectives and deliverables for such a project is easy because
metrics were being used; increase minimum broadband speeds to at least 12 Mbits per second
although the initial desired objective was speeds of 100 Mbits / s to be upgraded to 1 Gbits per
second for at least 93% of the Australian population, using fiber which would also future proof the
project. Ares not covered under the fiber network would have a mixture of the 4 G LTE fixed
wireless system and telecommunication satellites that are Geosynchronous. As of 2016/ 2017, just
under 5 % of the 7,7 million Australian households (350000 premises) had been connected by the
NBN to the new infrastructure, with just 260000 premises being serviceable. The uptake was also
very much below the expectations at just 78000 fiber connections to the NBN. The new government
changed the scope from fiber only and 4 G LTE and Geosynchronous satellites to mixed media
methods (multi technology mix) including FTTN using a mixture of copper and fiber technology,
FTTP (Fiber to the Premises), and HCF (hybrid fiber-coaxial) (Holznagel 2010). This is despite A $
7.3 billion being already spent, meaning the cost would increase significantly to cover 100% of the
population, assuming the present budgets as shown in the table below;
Present connection Percentage Cost
350000 premises 5% A $ 7.3 billion
7.7 million premises 100% A $ 146 billion
Yet the initial budget was set at A $ 40 billion, which would have provided better value for money
for taxpayers. As of 2017 February, the project cannot be fully handed over because it remains
incomplete, and significantly behind schedule as well as being over the budget. The roll-out of the
project has been painfully slow, especially with the new government coming into office in 2014. the
NBN Co had the objective, at its inception, to connect 93% of the Australian households and 13
million business premises to wholesale FTTP (fiber to the premises) but there was a shift to the
mixed media of FTTP, HFC, and FTTN, which has not been taken up enthusiastically by the people.

The management of the project was fair, and its measurement (metrics) good; the NBN Co was set
up with an exhaustive range of supervisory and legislative structures. However, the program was
several changes in its management and management structures, disrupting operations and leading its
success likelihoods being severely diminished. The project was well aligned, with huge public
support and political support at its inception, and with key stakeholders roped in to support its
execution. The project objectives have not been met; the project is not complete when it was
supposed to have already been complete or very close to completion based on the original
deliverables. It has totally failed to deliver on its objectives of higher internet speeds fr 100% of
Australians, to create more employment opportunities, increase small business performance, and
enhance multimedia use in the country with speeds of up to 1 Gbits / s. yet as the measures/ metrics
show, the project has achieved just 5% (slightly below) of its original objectives. Even when the
scope and deliverables for the project were changed, the roll-out should have been faster and more
households connected. This aspect of the scope and deliverable of connecting all Australian
households did not change, it was just the infrastructure to be used to achieve this. The reasons for
the failure are many, including lack of stakeholder engagement and support during the initial phase,
political changes that led to drastic changes in scope, and constant changes of management and the
management structure. Crucially, the NBN Co management structure lacks a dedicated project
manager, with project managers being found in various technical teams.
Findings and Recommendations
Initially, the project was well envisaged and planned, with executive teams and project sponsor
formed along with relevant stakeholders being brought aboard. Several aspects of the project were
done well, according to the PMBOK guidelines and the relevant regulations for that type of project
organization. However, failure to seek consensus and support across the political divide ended up
being the bane f the project, resulting in massive changes in scope and deliverables as well as
management and management structures of the project. A change of government largely
precipitated the present crisis, with decisions made without input from stakeholders, including the
public. Several things were done right, including setting up the rules and regulations to guide its
operations, the scope of the project, the project deliverables, quality control standards, a project
management plan, as well as a risk management plan and audits/ metrics / reporting to show te
progress of the report. Best practices were used in getting contractors and partners. The challenge
was political support, which is akin to executive support that was not across board and highlights
the value and importance of support for a project from the project sponsors (in this case the
government) and stakeholder involvement and conflict resolution from the initial stage. The drastic
change when a new government came into office and lack of support for the initial project scope

and deliverables has severely affected the execution of the project. It is recommended that such
large projects be done in phases, and project management methodologies not only be utilized, but
practiced and implemented; further, all stakeholders must be involved and their support secured
before commencing the project to forestall risks such as lack of support at a later stage when the
project has commenced.

References
Cordoba-Pachón, J. R., & Ochoa-Arias, A. E. (2010). Systems thinking and e-participation ICT in
the governance of society. Hershey, PA, Information Science Reference.
Holznagel, B. (2010). Strategies for rural broadband: an economic and legal feasibility analysis.
Strategies for Rural Broadband. Wiesbaden, Gabler.
Sorensen, L., & medina, A. (2016). The End of Australia’s National Broadband Network?. PDF.
NY; Technology Policy Institute.