Auditor general should examine contract rules

The auditor general should examine how companies can extend or enrich their contracts with the provincial government, according to a Liberal MLA.

The Office of the Comptroller's audit, which was obtained under the Right to Information Act by CBC News last week, lists a series of problems encountered with how contracts were awarded and managed within the e-health system.

The comptroller's audit looked at 15 contracts associated with the e-health project that were in place as of April 2009. The audit found potential conflicts of interest in the awarding and in the extending of some contracts, and found payments had increased without proper authorization.

Liberal Rick Doucet said it's time to look at how the provincial government handles its contracts with consultants and suppliers.

Doucet said it can be difficult for a government to say no to a demand for more time or additional funding midway through a project, but he wants the practice looked at.

"I really think that the auditor general has got to come in and look at this as quickly as possible. I mean it's been a number of years that this has been looked at," Doucet said.

The Office of the Comptroller's audit into the e-health contracts was filed in November 2010.

Auditor General Kim MacPherson is the province's former comptroller and was given the auditor general's position last November.

Report already ordered

Health Minister Madeleine Dubé ordered an independent review into the more than 300 contracts awarded in the creation of the e-health system after an internal audit discovered potential conflicts of interest in the way some contracts were managed.

The provincial government blacked out the names of the IT companies in specific examples of cost overruns and other problems when it released the audit to CBC News.

However, in an e-mailed statement, Neil Russon of the Fredericton-based company Accreon defends his company's work on e-health.

"At Accreon, we pride ourselves on our integrity and professionalism and follow the processes established by our customers for the procurement of professional services," Russon said in his email.

Meanwhile, Lorne Gorber, senior vice-president, global communications and investor relations at CGI Group, said it looked over its records and concluded it's not one of the blacked-out company names in the audit.

"There are a number of projects/contracts which CGI fulfills and we play a different role on each of them. We have a solid delivery track record and the relationship with the client is strong in each of them as is the level of their satisfaction," Gorber said in an email.

"So the thrust of the article and associated 'blacked out' mentions aren't with us."

The audit found the government allowed companies working on e-health to bill more than the contract amount without proper approval.

One contract for $395,000 was increased by $150,000 with no new purchase order and the contract later increased again by $1.45 million.

Another contract was worth $3.1 million originally and then it was increased to $6.9 million.

Supply and Services Minister Claude Willams said the companies must "provide all the justification in order to amend the original purchase order."

But the provincial government often can't say no when a company asks for more money or time.

It can be even more expensive to switch to a different supplier halfway through a project.