‘Scandalous’: $38m overspend on vaccine software? Ian McCrae complains to Auditor-General

Orion Health chief executive Ian McCrae has followed up on his threat, made in a Herald interview, to lay a complaint with the Auditor-General over the procurement process for a new software system to manage vaccinations – including the crucial Covid-19 inoculation programme.

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Earlier, the Ministry of Health told the Herald that $38 million had been allocated to a consortium including US giants Salesforce and Amazon to create a new vaccine management system – which would replace one created by Orion and first deployed in 2005.

In his letter to Government Controller and Auditor-General John Ryan, McCrae says “$38m for a new immunisation system is a scandalous figure.”

He reiterates 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 – 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.”

In his letter, 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 NIH procurement process – or immediately respond to McCrae’s letter today – 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 NIH procurement process 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, who were awarded the $38m contract to create the new, cloud-based National Immunisation Solution (NIS) in November last year.

The initial vaccine rollout was marred by a data breach at Canterbury DHB, which was using a system created by Dublin-based software company Valentia, and the Government’s inability to provide Covid-19 jab statistics.

Earlier this month, a spokesperson for the Ministry of Health said the new system was not behind schedule. Work on the new system was being carried out in stages and was due to complete in early 2022. (The MoH business case document from October last year outlines a similar timeframe).

Scheduling ability – via a Salesforce add-on created by Australian company Skedulo – was not due to be added until late May.

A spokesperson for the Auditor-General confirmed Ryan had received McCrae’s complaint earlier today.

“We will consider the matters raised in the correspondence and what next steps we might take,” the spokesperson said.

The Ministry of Health had not delivered its response by press time.

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.

He said, she said

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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