Another blow to SA Health: costly company provides ‘nil’ economic benefit

By Shannon Jenkins

January 17, 2020

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A company brought in to overhaul the South Australian health department’s finances was the most costly but least beneficial to the local economy, documents show.

KordaMentha was one of eight companies which applied for the contract to overhaul the finances and improve the clinical outcomes of the Central Adelaide Local Health Network.

As part of the tender process, applicants each provided industry participation plans rating how their proposals would provide local economic benefit.

In its own plan, KordaMentha rated the local economic benefit of its proposal as “nil”. But documents released under Freedom of Information laws and given to InDaily show KordaMentha’s proposal was valued at $43 million — the most expensive of the lot.

Two of the other proposals were worth $30 million each, with the rest being valued at $844,800, $300,000, $1 and $0. SA Health did not respond to InDaily’s questions on how the last two proposals (which also boasted “strong” economic benefit) could have been valued in single figures.

SA Health procurement director Quinton Swann told InDaily local economic benefit was just one of five criteria which applicants were assessed against.

“The other criteria were proposed methodology, relevant experience and past performance, capacity and capability,” he said. “The contract was awarded to the highest overall scoring tenderer.”

Read more: Watchdog uses SA Health as example to warn of harmful maladministration

It was announced KordaMentha had won the contract in late 2018. The planned $800,000 consultancy ended up costing more than $20 million.

The shamble is just one of many problems plaguing SA Health. The department has been the focus of the independent commissioner against corruption Bruce Lander’s frustrations numerous times, with some critics calling for a Royal Commission to fix the system.

Meanwhile, the entity’s chief executive Dr Chris McGowan has raised conflict of interest concerns due to his former top job at healthcare provider Silver Chain. Former Commonwealth ombud John McMillan this week handed his independent report into McGowan’s conduct to the commissioner for public sector employment,  Erma Ranieri.



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