Tuesday, October 6, 2009

Former eHealth execs in new contract controversy!

Some of the same executives involved in the eHealth scandal helped approve a lucrative consulting contract for a friend's firm four years ago when they were running another provincial health agency, sources tell CBC News.

The McGuinty government had tasked Cancer Care Ontario in 2005 with finding ways to reduce hospital wait times for cancer surgery. At the time, Sarah Kramer was a vice-president and the chief information officer at the agency, and Alan Hudson was the CEO.

Kramer later went on the head eHealth Ontario, while Hudson became the chair of eHealth. Kramer was fired from that job in June, and Hudson resigned as chair soon after it emerged they doled out millions of dollars in untendered contracts.

Cancer Care Ontario put out a call for tenders on June 30, 2005, to develop a computer system to measure wait times for such procedures as cardiac surgery, hip replacements and MRIs.

The agency considered 11 proposals to land the contract and narrowed the list to two contenders.

Phone call changed things
But the company that eventually landed the contract, Accenture, did not make that final short list, CBC News has learned.

The company, which was among the 11 original bidders, was contacted by Cancer Care Ontario and told it had not made the final two, Accenture told CBC News.

That changed after a senior partner at the firm, Will Falk, made a phone call to Kramer, who was on holiday when the short list was drawn up, three sources close to the bidding process told CBC News. Accenture won the contract a day or two after that phone call in mid August 2005, the sources said.

They requested anonymity because of the sensitivity of the situation.

Accenture denied any wrongdoing.

"We have no reason to believe our team acted inappropriately in the contract bidding process," Accenture said in a statement. "We have both won and lost competitive work for CCO."

The statement did not deny that Falk made a call to Kramer.

Kramer, who similarly said she wasn't involved in any wrongdoing, also did not deny that she received a call from Falk.

"No single person at CCO was responsible for awarding this contract to Accenture, rather a full committee with appropriate representation and expertise decided that Accenture was the most appropriate candidate to do this work," Kramer said in a statement to CBC News.

Kramer and Falk were close personal friends — Falk was one of Kramer's references when she applied for the position of eHealth CEO.

The Cancer Care Ontario contract was initially supposed to be worth $5 million, but the sources said that amount later ballooned to close to $20 million.

The next year, Accenture secured another contract — this one was tendered — to implement the program it had designed in 50 Ontario hospitals.

No response from Falk, Hudson, Kramer
Cancer Care Ontario denied CBC's request for a copy of Accenture's wait times contract. Although it's a government agency, Cancer Care Ontario is not subject to the province's freedom of information rules.

The agency acknowledged in a statement to CBC News that Accenture did not make the final two companies. But after reviewing oral presentations from the two, "questions were raised about the financial stability of one of the vendors and the project management approach of both organizations," said Mitchell Toker, spokesman for Cancer Care Ontario.

"In addition, there was a concern that one of the vendors lacked technical expertise with the software in question."

Accenture, which was the next vendor in waiting, was asked to make an oral presentation and then secured the contract, he said.

Falk and Hudson declined requests for interviews.

eHealth was set up last September by the Liberal government. It was 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 and Hudson left eHealth in June soon after the health agency doled out $16 million in contracts without any apparent attempt to open the deals to outside bidders within the first four months of its creation in September 2008.

The agency paid consultants millions of dollars for — among other things — watching TV, reading the New York Times and holding a conversation on the subway.

Ontario's auditor-general is due to release the results of his investigation into eHealth on Wednesday.


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