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Confidential Government Project with US Tech Firm Fails to Deliver System-Wide Change

Overview of the Project

A confidential government project initiated by the Ministry of Business, Innovation and Employment (MBIE) with a major US technology company, Microsoft, intended to bring about “government system-wide change” but ultimately failed to achieve its objectives. The project, referred to as a “lighthouse” project, was established in 2020-2021 after a request from the Department of Internal Affairs for special work with Microsoft.

The project aimed to promote principles of “openness” and “transparency” as its foundation. However, it operated under an exclusive memorandum of understanding (MOU) with Microsoft, which remained undisclosed to the public until recently.

Notably, this is not the first “lighthouse” project involving Microsoft that failed to deliver. The Ministry of Education also had a similar project focused on integrating artificial intelligence (AI) into schools, which encountered a similar fate.

The ministries engaged in these initiatives after the government’s top digital officer encouraged departments to propose special projects with the US company.

MBIE was already involved in the Digital Boost project, aimed at enhancing digital skills for small businesses, with the goal of establishing the most digitally enabled small business sector globally. Microsoft initially committed to support Boost but expressed additional interest in separate projects involving large-scale data analytics to showcase the value of New Zealand-based data farms. Concurrently, the US company applied for permission to acquire non-sensitive land in Auckland for constructing hyperscale data centers.

How AI legalese decoder can Help

The AI legalese decoder technology can play a crucial role in analyzing the MOU, documents, and communication related to the failed “lighthouse” project. By employing its advanced natural language processing capabilities, the AI legalese decoder can extract valuable insights, provide a comprehensive understanding of the project’s scope, objectives, and potential issues. It can also offer suggestions to improve future collaborations, identify legal implications, and assist in drafting more effective agreements. Implementing the AI legalese decoder can enhance transparency, efficiency, and decision-making in government projects while minimizing the risks associated with confidential arrangements.

Details of Project B

The draft terms of reference for Project B outlined a broader vision beyond a data-sharing collaborative for small business transformation. It aimed to establish a trust-based mechanism and data-sharing environment, enabling government system-wide change across various sectors, including environment and social ones. The stakeholder list was expected to be extensive, encompassing government, sector, industry, and NGO stakeholders. The MOU, classified as Microsoft Confidential, highlighted the company’s engagement in thought leadership regarding the implementation of “digital government” by 2030.

While Microsoft assumed the costs for Project B, MBIE assigned its own staff members to the project. The exact expenses incurred by the taxpayer for the “lighthouse” projects remain undisclosed.

To illustrate the potential impact of the project, MBIE provided a graphic outlining the capabilities of the “Lighthouse Enabling Engine”, outlining the ambitious goals it could achieve.

Expansion of the Lighthouse Vision

The 13-page document heavily emphasized the “Small Business lighthouse vision” and the concept of a trust-based mechanism. The project envisioned providing employers with the ability to easily engage apprentices, seek export advice, and obtain instant assistance in complying with regulations. MBIE aimed for Project B to serve as a proof-of-concept, showcasing how the government can create a digital Public Service ecosystem, enhancing interactions, intelligence, effectiveness, and value-added services for New Zealand businesses.

Despite these ambitions, the project did not progress beyond its terms of reference, which expired in June 2021. MBIE continued to allocate resources and enlisted the services of consultancy firm Deloitte in early 2022 to run workshops aimed at developing a business case for the ‘Enabling Engine’, which Microsoft also participated in. The ministry hoped to secure funding based on this business case.

Project A and the Education Lighthouse Project

Project A, focusing on Microsoft’s voluntary support to Digital Boost, persisted without taxpayer costs, as stated by the ministry. Microsoft joined Boost before the government publicly announced it, with the company’s primary interest lying in providing businesses access to its skills content and certifications.

Simultaneously, the Ministry of Education pursued its own “lighthouse” project with Microsoft, centered on artificial intelligence (AI).

Current Status of the Lighthouse Projects

No commercial deal or contract materialized between MBIE and Microsoft, despite the Department of Internal Affairs attempting to facilitate progress. The ministry determined that the support offered by Microsoft was insufficient to develop a proof-of-concept for Project B. MBIE decided to prioritize other internal budgeting and resource allocation efforts, leading to the discontinuation of Project B.

The education-focused “lighthouse” project faced a similar outcome.

Although the projects’ failure did not impact Microsoft’s financial success, with local revenues growing to over $1 billion in the past year, the company continued to secure significant government contracts and migrate public data to its cloud-computing data centers in Australia.

It’s noteworthy that only Microsoft and Amazon Web Services (AWS) possess special MOUs with the government’s chief digital officer, which were initially kept confidential and non-binding. However, the government eventually released both agreements earlier this year. According to official papers, AWS’s agreement evolved from high-level discussions involving former Prime Minister Jacinda Ardern and AWS’s global head. The MOU with AWS does not provide the company any specific advantages.

As the government evaluates its approach to technology partnerships and aims for greater transparency, tools like the AI legalese decoder can assist in analyzing and understanding the legal and strategic implications of such agreements. By utilizing advanced AI algorithms, the AI legalese decoder can unlock valuable insights, improve decision-making, and ensure accountability in future collaborations between the government and tech firms.

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