Innovationaus.com - Govt dismissed alternate quantum bids in just 10 days

All five proposals to the federal government’s quantum computing EoI were ruled out in less than two weeks, in contrast to the six months of internal due diligence and millions of dollars spent on external advice to assess an unsolicited proposal from PsiQuantum.

Amid calls for the government’s investment in the Californian startup to be subject to a tougher national interest test, answers to questions on notice provided to the Senate reveal that competing proposals were assessed and dismissed in just 10 days.

The federal opposition has seized on the admission, claiming it is more evidence that the $940 million joint investment in the company with the Queensland government was a “captain’s pick”.

As previously reported by InnovationAus.com, the once secret EoI was run as a confidential process to test the market’s appetite to develop a commercial-scale universal fault tolerant quantum computer in Australia, ideally before 2030.

An invitation to participate in the EoI was sent to 21 local and international quantum firms on 15 August 2023 – six months after non-binding commercial discussions and due diligence had already commenced with PsiQuantum.

PsiQuantum was not invited to participate in the EoI, which Department of Industry, Science and Resources secretary Meghan Quinn in June said was used to “compare and contrast” with PsiQuantum and create a “level playing field”.

The EoI closed on 11 September 2023, giving other companies four weeks to pull together a response, without knowledge of the government’s pre-existing talks with PsiQuantum, or the likely scale of investment.

In newly published answers to questions on notice from Senate Estimates, DISR said five companies provided submissions and agreed to an NDA, with one other company agreeing to the NDA but not providing a response.

But DISR has revealed the companies were subject to just 10 business days of due diligence by a taskforce consisting of DISR, the Department of Finance and the Defence Science and Technology Group.

In contrast, DISR racked up more than $7 million in legal, probity and other consulting fees for its due diligence on PsiQuantum. The Queensland government also spent at least $2 million.

“The assessment of the EoI submissions was completed on 25 September 2023,” the department said in its response to detailed questions on notice from Liberal Senator Andrew Bragg.

“It was undertaken by an Evaluation Assessment Panel chaired by DISR and with membership from the Department of Finance and Defence Science and technology Group.

“Support was provided by other Commonwealth quantum experts, including the Technical Advisory Group.”

DISR has declined to name the five companies that responded to the EoI as “disclosure of the names may result in speculation regarding the assessment that could have reputational, commercial and strategic impacts for companies involved”.

Documents released under Freedom of Information show Industry and Science minister Ed Husic signed offer on “formal due diligence and economic analysis” on an unsolicited proposal from PsiQuantum in December 2022.

The unsolicited proposal was submitted by the company in November, according to answers provided to Senator Bragg, following an earlier “higher-level due diligence process” by the Queensland government.

Shadow science minister Paul Fletcher, who last week referred the PsiQuantum deal to the national auditor, said the new information is more evidence the government failed to meet “normal standards of contestability, fairness and probity”.

“These answers… provide yet more evidence that the Albanese Labor Government made a captain’s pick to provide nearly a billion dollars of taxpayers’ money to American company PsiQuantum, and months later sought to cover its tracks by establishing an EoI process which was reverse engineered,” he said.

Author: Justin Hendry

This article appeared in Innovationaus.com on 6 August 2024