The TCs thus decided to call a tender to meet the following requirements:
To purchase the software developed in 2003, and lease it back to the TCs for a monthly fee, until the software was changed;
To undertake to secure extensions of the NCS contract at no extra cost i.e. take on the obligation to get an extension on the existing rates, until the TCs obtained new or enhanced software. This was put in to protect the financial position of the TCs; and
To work with the TCs to understand their enhancement and redevelopment needs and look for a suitable vendor to provide these upgrades.
Under the tender, the TCs sold only the IP in the old software. The ownership of the physical computer systems remained with the individual TCs. We wanted to sell the IP rights in the old software because it had limited value and was depreciating quickly. Had we waited until the new system was in place, the IP to the superseded old software would have become completely valueless.
The TCs advertised the tender in the Straits Times on 30 June 2010. Five companies collected the tender documents. These were CSC Technologies Services Pte Ltd, Hutcabb Consulting Pte Ltd, NCS, NEC Asia Pte Ltd and Action Information Management Pte Ltd ("AIM").
I am aware that NCS considered bidding but in the end, decided not to do so as it was of the view that the IP rights to software developed in 2003 on soon to be replaced platforms were not valuable at all.
Another company withdrew after it checked and confirmed that it was required to ensure renewal of the NCS contract without an increase in rates. The company did not want to take on that obligation. The others may also have decided not to bid for similar reasons.
In the end, only AIM submitted a bid on 20 July 2010.
We evaluated AIM's bid in detail. First, AIM's proposal to buy over the software IP would achieve our objective of centralising the ownership of the software, consistent with the model suggested by D&T.