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Although snubbed for the new online vaccine register at home, Auckland-based Orion Health continues to win new business abroad.
Chief executive Ian McCrae says a new deal with Saudi Arabia will be worth "hundreds of millions" to his company over the next decade.
On the back of his Saudi win,and new business in the US and elsewhere, McCrae has renewed his criticism of our Government's procurement, which he calls "woeful", lacking in transparency and "third world".
Orion will build what it bills as the world's largest health information exchange (HIE) for the kingdom. It will take data feeds from more than 5000 healthcare providers "to create a single, holistic view of 50 million patients' medical and care information".
The company says the Saudi contract is "worth in the vicinity of 10 times the scale of Orion's Oklahoma project over its lifetime".
The deal to build an HIE for Oklahoma, announced in April last year, was worth around US$100m ($141m).
At the time of that deal, McCrae said Orion was also in the running for a US$300m contract with a larger US state. Today, by way of an update, he would only offer "there will be another announcement soon".
The CEO won't go into specific financials but says Orion will be profitable for the second year in a row this year, on increasing revenue. Staff numbers have increased by around 10 per cent to 600 over the past 12 months.
The new wave of deals represents a comeback for Orion, which made heavy losses in the two years before it delisted from the NZX in 2019 as McCrae offered to mop up shares for between $1.18 and $1.26.
It was a grim end to the firm's life as a public company, whose market cap topped $1 billion back when its shares traded at $6.24 soon after its 2014 IPO.
McCrae told the Herald Orion had "decorporatised" now that it was free from its obligation for regular market updates. It could be both more nimble, and take a longer-term approach to planning.
Sidelined at home
The makeover, and the offshore wins, have apparently failed to impress at home.
Soon after Covid first hit, a $38 million project to create a new, cloud-based vaccine register for NZ was in October 2020 awarded to a consortium headed by Deloitte, and including US giants Salesforce and Amazon Web Services.
A furious McCrae complained that Orion - the incumbent - did not even get to participate in the tender process. He said Orion could have made the new system cheaper, faster and better.
Orion Health CEO Ian McCrae in April 2021. Photo / Ian McCrae
The Ministry of Health said a truncated tender process took place because of pandemic time constraints, and Orion and Deloitte were assessed on their performance in previous projects.
McCrae called the criticism of Orion in tender documents (released under the OIA) incorrect. He complained to Auditor-General John Ryan, but in a decision released in October last year, Ryan knocked back McCrae's complaint.
"The ministry approached this as an 'emergency' procurement and took steps to follow MBIE's emergency procurement guidance," Ryan wrote.
The Auditor-General said he had not taken a view on Deloitte's capability, but noted a Ministry of Health panel had assessed its capability with the previously implemented National Breast Screening programme.
"The ministry told us it now knows the Immunisation Solution will not cost the full $38m," Ryan added.
In October, McCrae was critical of the Auditor-General's finding.
"To assist the OAG [Office of the Auditor-General] we provided a detailed 19-page statement of facts, much of which the OAG didn't bother responding to. They met and spoke with Ministry of Health officials, but never bothered contacting us to discuss anything. Not even a single phone call or email," McCrae said.
He was disappointed that, in his view, the Auditor-General had not addressed all of the points raised by Orion.
There would be fresh procurement controversy in the New Year as the Ministry of Education snubbed two local companies in an air filtering and monitoring Covid-19 tender for schools - instead going with offshore solutions, despite the winner not being able to supply the bulk of the 5000 air filters to schools until June, versus immediately for a local contender.
After being snubbed at home, does McCrae feel vindicated by his company's Saudi win?
"I would not use the word 'snubbed'," the Orion CEO says.
"But it is fair to say the New Zealand businesses today often struggle to work with the New Zealand Government and in particular our Ministry of Health," McCrae says.
"New Zealand Government procurement processes are woeful; some of the worst in the world and well overdue for an overhaul.
"[It's] third-world procurement when what we really need is open, transparent, fair procurement which will save New Zealand millions and get far better products and services for the country."
McCrae's stance has had a degree of support from local IT industry group NZRise, which says an outsize proportion of Government technology contracts go to multinationals - in part because the cost and complexity of the tender process counts against smaller local firms.
Human rights concerns?
A US State Department report, released last year, referred to reports that the Saudi Arabian government or its agents had committed unlawful killings.
The report added that the Saudi government on occasion did not maximally punish people for committing human rights abuses, creating "an environment of impunity".
Five government agents charged with murdering Washington Post columnist Jamal Khashoggi at the Saudi consulate in Istanbul in 2018 had their sentences commuted from death to a maximum of 20 years in prison, the report noted.
Does McCrae have any qualms about Saudi Arabia's human rights record?
"I am not really in a position to comment on how Saudi Arabia's government is going. I've only been to the Middle East a few times, with my last visit over two years ago," the Orion CEO told the Herald.
"What I can say is that it is hard to find another country in the world with a greater commitment to the healthcare of its citizens.
"They have a very dedicated and highly educated workforce, both male and female.
"Also, staff tell me that Saudi society has undergone fundamental changes over the last decade and they fully expect in another 10 years, parts of Saudi will be much like Abu Dhabi or Dubai."
