KEY POINTS:
In response to the blood-testing contract debacle, the Government has asked the Auditor-General to investigate how the three district health boards of greater Auckland handle conflicts of interest. There could be no clearer sign that heads will not roll for the costly decision to award the contract to a company led by a doctor who had been on the Auckland board when the contract was being devised.
We already know how the boards handled this conflict of interest. Auckland board chairman Wayne Brown saw that the doctor, Tony Bierre, was stood down when Mr Brown realised he was bidding for the contract. But neither Mr Brown nor deputy chairman Ross Keenan, a Government appointee on all three boards, saw anything wrong with entertaining Dr Bierre's bid and awarding his consortium the contract.
A High Court judge was surprised at this, and so are most people. They do not need the Auditor-General to tell them the boards have followed sound rules of public administration in this instance, the public waits to see someone demonstrate accountability.
There is no excuse for delay. The practical problems left by the High Court's cancellation of Dr Bierre's contract have been resolved for the time being. The pathology testing work has been left with the existing provider, Diagnostic Medlab Ltd, for 18 months while the boards prepare for a fresh tender.
At that point, says Mr Keenan, the boards would consider another bid from Dr Bierre's company, Labtests. Mr Keenan perhaps believes that a fresh tendering round, devised this time without Dr Bierre at the table, would be beyond reproach. If so, he needs to read Justice Raynor Asher's decision again. The judge believed the boards should not have considered a bid led by someone with inside knowledge of their aims, who indeed had helped to formulate their aims. Unless the boards intend to substantially revise their thinking for the next tender, Dr Bierre's advantage is unchanged.
Justice Asher's concern with Dr Bierre's conflict of interest was the risk in any such conflict that the public interest will not be the only consideration. It is hard to see how that poison can be washed out. If standing down from the board in the decisive phase was not sufficient previously, in the judge's view, Dr Bierre's absence from the board next time would not make much difference. The damage is done and the boards should heed the High Court's ruling: they should not have accepted a bid from Dr Bierre's consortium. That was so last year and it will remain so in 18 months.
That may be harsh on him, particularly as the savings now offered by DML vindicate Dr Bierre's contention that they were available. But the fact remains he twice did not tell his board he was bidding for contracts when he should have done so. Questions about his conduct have been raised in Parliament and the Prime Minister was not alone in wondering whether justice was fully served by the mere cancellation of the contract.
If the recent court case is to have a lesson for the public sector generally, the former Auckland health board member probably should be permanently barred from profiting from a contract he helped to design. Mr Keenan, a Government appointee, would be fortunate if he retained the confidence of the Government in view of the High Court ruling; having opened the door to another bid, he must be severely pushing his luck.
The only reason that heads have not rolled yet over this chapter of errors is possibly that all sides are now positioning themselves with an eye on financial liabilities. But someone must take responsibility soon, and resign.
