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A top health boss has bit back at claims that the Government overspent by up to $35 million on a new vaccine management system after a no-tender procurement process.
But, at the same time, a number of IT industry figures have backed a complaint that Orion Health chief executive Ian McCrae laid with the Auditor-General yesterday.
McCrae wants a full review of the procurement process for a new software system to manage vaccinations - including the crucial Covid-19 inoculation programme - which the Ministry of Health has said would cost $38m ($15m from money already allocated for a new system, plus $23m from a contingency fund), with US giants Salesforce and Amazon as key technology partners.
The new system will replace the one created by Orion and first deployed in 2005.
In his letter to Controller and Auditor-General John Ryan, McCrae said: "$38m for a new immunisation system is a scandalous figure."
He reiterated his claim to the Herald that his company could have added "a simple schedule upgrade" to the current National Immunisation Register (NIR) for $50,000 within a few weeks, or met the Department of Health's requirements for a new system, dubbed the National Immunisation Solution (NIS) - including a website for members of the public to review their vaccination status and book a jab - for $1m to $3m.
Asked for his opinion of the tender process for the new system, McCrae told the Herald: "There was no tender."
Overnight, after the Herald sent a copy of McCrae's complaint, Ministry of Health deputy director general, data and digital Shayne Hunter responded to some of the Orion CEO's claims.
"The Ministry of Health is confident we followed appropriate procurement processes and principles, reflecting the situation we were facing and the need to act promptly," Hunter said.
Hunter reiterated the argument used in an October 9, 2020, Ministry of Health business case document leaked to the Herald, saying a software screening platform created by a consortium led by Deloitte and Salesforce (the primary contractors for the new vaccine management system) for cancer screening, following a traditional tender process, had proved its worth, and could be repurposed.
"The ministry formally procured a platform in 2018 through a proper Request for Proposals to support bowel screening and other population health services. In response to Covid-19, we have leveraged this platform repeatedly throughout the past year, along with other technology platforms and components, to support contact tracing, management of the border, Covid-19 testing and reporting."
The ministry had always intended to replace the existing National Immunisation Register (NIR), Hunter said.
"When we faced the possibility that Covid-19 vaccines may be arriving in New Zealand considerably earlier than expected, we were able to leverage the population health platform to stand up a new Covid-19 immunisation register by December 2020. This work was successfully completed in under a month and the system was live for the beginning of January 2021.
"The system is being successfully used to support the vaccine rollout across New Zealand, and has been well-received by clinicians."
The ministry earlier conceded that the initial version of the new vaccine software was a cut-down "interim" version of the new Salesforce-based system.
The Government was initially unable to provide any vaccine numbers, and Canterbury DHB, which had fallen back on using an alternative system from Dublin-based Valentia Technologies, spilled the details of more than 700 people who had registered for their first jab. Meanwhile, Northern DHBs were using a system created by US company ServiceNow.
However, the ministry has argued that booking capability was never going to be added to the new system until late May (via a Salesforce add-on created by Australian company Skedulo) and that full functionality would not be complete until a staggered rollout of features finished in early 2022.
Hunter also claimed the task at hand was more complex than the ministry's critics had implied - and that local contractors were being used to adapt the platform created by San Francisco-based Salesforce.
"The system itself is significantly more complex and has greater functionality than the old national immunisation register, which was a register rather than a service that supports a full range of inventory, distribution, adverse reactions and workforce," the deputy director general said.
"The system is currently being extended to support online booking for Covid-19 vaccinations. All of the development work on the platform has taken place with local New Zealand-based suppliers, as well as ministry staff. There are 15 suppliers involved. There are significant benefits from having vaccinations sitting as part of a wider ecosystem of pandemic and disease responses, and we are building a national asset that can live beyond the Covid-19 response."
McCrae said: "I don't know how you can spend so much and deliver so little", saying that Orion or another local contender could have wrapped up the project by now.
Hunter said, "Our teams, in partnership with the health sector and suppliers, have achieved a great deal in very short timeframes to support an effective response to Covid-19. We value our relationships with vendors and others, and will continue to work together to keep New Zealanders safe and well during the pandemic response."
He said he could not comment further until after the Auditor-General had been in touch.
Veteran tech industry Sir Peter Maire told the Herald that he supported the ministry's decision to go with a Salesforce-based solution. "It's an excellent choice for a Covid vaccination booking and tracking system."
The Navman founder knows Salesforce well. His latest venture, Invenco, is currently deploying a new booking system, co-developed with the US company, as it races to update thousands of payment terminals in petrol stations across the US ahead of a regulatory security upgrade deadline.
"Our booking system must record every different site, every different pump by brand model, serial number and its location. We need to know the data wiring configuration of the site and the brand and type of controller that connects all these pumps to the server in the back office. Then we need the details on the point of sale system. This is just the start of the process because every payments terminal we install is a secure device and all the serial numbers must be recorded and controlled for as long as this system is required to comply with the global payments security standards," Maire said.
"Our booking system was a co-development using the Salesforce platform, external consultants and internal resources. That's the same model as Deloitte is using. The major difference is that our total cost will be significantly less than $1m."
Maire disclosed that he was an early investor in Orion, but added that the understanding of health systems he gained through that period, plus his more recent experience as a backer of Sam Morgan's Covid Card project, places him in a position to speak knowledgeably about costs.
He added, "I've been on the medical research funding board too so none of this stuff is beyond my comprehension. What is beyond my comprehension is the $38m."
Investor, Rocket Lab alumnus and Fever Screen Technologies cofounder Ralph Shale was another who came out in support of Orion after the Herald revealed McCrae's complaint yesterday.
"Good on him, too often in New Zealand, businesses accept these things and move on saying nothing. This just does not feel right," Shale said.
"If the procurement was in accordance with policy, then the policy needs to change."
And while not weighing in directly on the price or timeline issues, Victoria McLennan, co-chair of local IT company lobby group NZRise, told the Herald that the process could have been sharpened by even a quick-fire tender (McCrae earlier suggested a truncated two-week process rather than the usual six-months).
"NZRise appreciates that the normal procurement rules might not be practical during a viral outbreak - but also thinks there should have been scope for a quick-fire 'agile' tender, under the Procurement Rules laid down for all Crown agencies by MBIE, which include Rule 16 with is 'priority outcome' provision to 'increase the number of New Zealand businesses contracting directly to the government," MacLennan said.
In his letter to Ryan, McCrae said if Orion and other NZ companies had been asked to submit proposals, they could have "delivered this project faster and for a fraction of the price".
The Ministry of Health declined to immediately provide documentation on the NIS procurement process but a spokesperson said, "The ministry's procurement of the Covid-19 Immunisation Register was in accordance with government rules of sourcing."
The Herald has requested documentation on the procurement process for the NIS under the Official Information Act, but in the meantime has sighted the October 9 Ministry of Health business case document - sent to and signed off by Covid Response Minister Chris Hipkins, which stated that exemptions from MBIE's procurement rules can be granted in emergency situations.
Beyond its no-tender recommendation, the business report went on to point out that there is already what seems a tried-and-tested combo: Deloitte and Salesforce, who delivered the National Screening Solution (NSS) to track and manage breast cancer screening.
It was Deloitte and Salesforce, supported by Amazon's AWS and Salesforce-owned Mulesoft, which were awarded the $38m contract to create the new, cloud-based NIS in November last year.
A spokesperson for the Auditor-General confirmed Ryan had received McCrae's complaint on Thursday.
"We will consider the matters raised in the correspondence and what next steps we might take," the spokesperson said.
Earlier, Deloitte and Salesforce said they would not be commenting on the new vaccine. Deloitte deferred comment to the Ministry of Health. Salesforce said it had a policy of not commenting on projects in progress.
The Ministry of Health's October 9 business case document criticised the incumbent provider, bullet pointing what it saw as deficiencies in the Auckland company's 16-year-old system. It was pre-cloud, and built to manage childhood inoculations (although a degree of capability for adult vaccinations had been added since).
McCrae countered to the Herald that Orion recommended an upgrade to the current system in 2017, only to be rebuffed by the ministry.
The business case document also said, "a further compounding issue is that the ministry has been advised by the current vendor, Orion, that it will not support the NIR from 31 March 2022 onwards".
It said Orion notified the change after a 2019 restructure that saw the Auckland company delist from the NZX and sell part of its business to UK firm HG Capital. (McCrae's company has since rebounded, and recently won a contract to create a new Health Information Exchange for the US state of Oklahoma, which has a similar population to NZ, for US$100m).
McCrae said: "We did not advise this and it is not true."
MoH spokesperson Arrun Soma said: "The Ministry of Health stands by the statement. Orion has previously advised the ministry that it will not support a major component of the NIR from 31 March 2022 onwards as the component is end of life."
Soma said he did not have access to a copy of that apparent communication from Orion.
Orion and the Ministry of Health are completely at odds on that point, and others. The Auditor-General may soon step in as referee.
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