The Health Service Executive is failing to get value for money for the taxpayer by failing to procure goods and services competitively, according to a new report.
The Dáil Public Accounts Committee says the HSE is leaving itself open to the threat of legal action by failing to ensure competition among bidders for health service contracts.
The committee is especially critical of the HSE for awarding substantial contracts for carrying out major investigations without putting them out to tender. In many cases, this work is going to former employees of the HSE or the health boards, leading to a potential conflict of interest.
The report cites the example of a major investigation into a foster home in the southeast, where two contracts, each worth about €100,000, were awarded without a tender competition.
All contracts with a value above €25,000 are supposed to be put out to tender but the HSE has argued it is not appropriate to do this for major investigations, because of the sensitivity and time-urgency involved.
The report by the committee says the HSE is not in a position to determine if it is getting full value for money for a significant amount of its spend on goods and services because it has procured these in a non-competitive manner.
As a result, it is running an unnecessary risk of being sued by others in the market.
Getting value for money is central to proper procurement, but in the case of the HSE “that is simply not happening,” according to committee chairman John McGuinness TD. “It is the taxpayer who ultimately loses out when goods and services are procured in a non-compliant way.”
The report also says the HSE is under-reporting on the extent of its compliance with public sector procurement policy, though it has taken some steps to become compliant.
It says the HSE should examine ways of increasing the number of framework contracts it signs for goods and services. Currently, it operates 83 such contracts covering a spend of €426 million a year.
Staff should be notified of the legal risk of not conforming to competitive procurement rules, the report also recommends.
To provide cover for investigations, a framework contract should be put in place in advance, so a formal process will have taken place before contracts are awarded, it says. Former employees of the health service should be assessed for potential conflicts of interest before being awarded a contract.
