We've released our latest report: Workstation Support Services Contract: An Audit of Due Diligence.
This report looks at the due diligence behind government's $395 million decision to add BC's six health authorities to an existing contract for outsourced IT support, and to extend the contract by two years.
In this case, government negotiated a 15% volume discount with the service provider for adding more workstations to the contract – a savings of approximately $14 million over 6 years. But despite the discount, government's own preliminary analysis indicated that cost savings for the health authorities would be unlikely, and overall it could not demonstrate that adding the health authorities to the contract would result in value for money for taxpayers.
Despite this, government didn't explore alternative procurement options, and HSSBC did not provide the health authority CEOs with the level of information they needed to make an informed decision. As a result, they made a big decision despite limited information and uncertainty of success.
We also found that there was pressure within government to add the health authorities to the contract, as well as a strong general belief that adding to existing contracts would result in value for money.
Public organizations should be able to demonstrate what they're doing with taxpayer dollars and why.
The same situation could arise again because there are currently 12 similar contracts reported to be worth over $6 billion that government is looking to expand.
Our report contains four recommendations to assist government in making better informed decisions in similar situations.
Watch our short audio/visual summary of this report.
