Ont. health agency scrutinized for contract tendering practices

‘Taxpayers are really getting ripped off’: PC leader

An Ontario health agency has doled out nearly $5 million in contracts without any apparent attempt to open up the deals to outside bidders, documents obtained by CBC News show.

EHealth Ontario has come under scrutiny for its spending practices. (CBC)Contracts valued at about $4.8 million were signed off by eHealth Ontario’s CEO and president, Sarah Kramer, during the first four months of the newly formed agency’s operation, according to documents obtained by the Progressive Conservative party through a freedom of information request.

A letter regarding the request states that no procurement documents for consultant services were located “because none were created.”

EHealth was quietly set up eight months ago by the Liberal government, with the merger of the e-health program at the Ministry of Health and Long-term Care and Smart Systems for Health Agency (SSHA), an agency once mired in questions over its own operations.

The agency is tasked with developing a digital record system by 2015 to allow health-care providers to electronically share patient information to prevent medical errors and reduce costs.

Kramer defended her organization’s procurement policy, saying the quick transition period and the amount of money being invested in eHealth justified single-sourcing the contracts in many cases.

“It is appropriate and it’s under most policies in public and private sector to bring in sole-source vendors when you need to do something very quickly and you need some specialized services,” Kramer said.

A procurement expert said contracts should be open to competition unless they involve legal services, an urgent circumstance or a patented product unique to a single supplier.

Examples of some of the most lucrative contracts handed out during the first months of eHealth’s operation were $915,160 to health-care consulting firm Courtyard Group, and two contracts in a single day to Accenture Inc. that topped $1 million.

All but one of the listed consulting contracts surpassed $100,000, the cutoff at which provincial agencies are required to put a contract out to tender in order to ensure a fair and open playing field for companies.

No evidence has been found that the contracts were tendered on Merx, Ontario’s designated website for such government agreements.

Kramer’s spending

Hiring outside consultants also would allow eHealth Ontario to skirt the so-called “sunshine law” that requires provincial agencies to publicize the names of employees with salaries of $100,000 or more.

Sarah Kramer is the CEO and president of eHealth Ontario. Sarah Kramer is the CEO and president of eHealth Ontario. (CNW Group/eHealth Ontario)The agency already employed 164 people whose annual salary topped $100,000 in 2008, according to its website.

Documents show Kramer earns a base salary of $380,000 and received a $114,000 bonus in March, about five months after her start date.

The next month, Kramer announced in a memo that the company was cutting back on employee bonuses.

“After considerable discussion, we have decided to proceed with merit and bonus payouts, but scale them back to reflect current economic realities and the organization’s performance this past year,” the memo states.

Receipts also show Kramer spent at least $800 on limousine rides, including one priced at $408 from her home to London, Ont., and a couple in Boston.

Kramer came under scrutiny for her expenditures in early April when opposition parties complained about the $51,500 she spent on her new office furniture, a cost defended by Health Minister David Caplan as a startup cost typical to new agencies.

Ontario Auditor General Jim McCarter has been probing spending at eHealth and its predecessor, SSHA, since late last year. His findings are scheduled to be published in his annual report this December.

Interim PC Leader Bob Runciman called for the health minister to explain the apparent lack of competitive bidding for the projects and called the expenses upsetting given the economic downturn.

“This is just the tip of the iceberg. There’s all sorts of problems with this agency where taxpayers are really being — I think it’s not going overboard to say — getting ripped off by this agency and their practices,” Runciman said.

Alberta consultants flown in

Spending at eHealth and its predecessor swelled to more than $800 million in the past six years, while the date for release of its electronic patient health records has been pushed back three years to 2015.

SSHA was blasted in January 2007 when an operational review done by Deloitte Consulting said it lacked a strategic plan, had a poor reputation among the health-care community it was supposed to serve and was not being held accountable by Queen’s Park.

Set up in 2002, SSHA also struggled to move away from a dependence on consultants. A 2004-2005 annual report documents “intense” efforts to reduce reliance on consultants by doubling permanent staff.

Media reports suggest SSHA spent about an average of 17 per cent of its budget each year on consultants.

Also, two of eHealth’s consultants — Allaudin Merali and Donna Strating — are listed as senior vice-presidents on the agency’s website but live in Alberta, with their regular commute into Ontario funded by taxpayer dollars.

Documents released Wednesday show each charges about $2,700 a day for their services. The two also bill the agency for regular flights, accommodation in Toronto plus a per diem for meals and other costs. Among the receipts are two $3.26 bills for a muffin and can of pop.

The total cost for the two amounts to about $1.5 million a year.

EHealth’s CEO defended the costs of flying two consultants in, saying Alberta has the “best record in eHealth in the country.”

“They’ve come in and really helped us get back on board and start moving forward. So we’re paying market rates for people who are the best and the brightest in the business,” Kramer said.

Close ties

Questions are also being raised about a further $1 million in apparently untendered contracts awarded in the early months of the agency’s transition to Courtyard Group, on top of the single $915,160 deal.

Michael Guerriere, a managing partner of Courtyard Group, was also named as eHealth’s interim senior vice-president of strategy at one point, and billed more than $3,000 a day as a consultant.

Guerriere’s wife, Miyo Yamashita, heads another firm, Anzen Consulting, that benefited from more than $300,000 in eHealth contracts.

Yamashita charged about $300 an hour for communications advice and services that included:

  • Reading New York Times articles on diabetes and electronic health records from her husband.
  • Reviewing Kramer’s holiday voicemail greeting and confirming details for a seasonal party.
  • Debriefing during a chat on the subway.

If you have information on this story, send an email to yournews@cbc.ca.

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