This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
The procurement of air ambulance services has been subject to repeated audit scrutiny across Canada, with reviews of provincial programs in Ontario, British Columbia, and Manitoba raising concerns over appropriate project governance practices.
For example, in its March 2012 special report entitled Ornge Air Ambulance and Related Services, the Ontario Auditor General found that the lack of access to information about the operations of the provincial air ambulance agency compromised the government’s ability to provide proper oversight over the air ambulance program and related procurement activities:
From a quality-of-care perspective, the Ministry receives limited information on whether requests for patient pick-up and transfer are being responded to in a timely and appropriate manner or whether patients are receiving the appropriate level of care during transport. As well, we questioned whether the Ministry had adequate oversight over Ornge’s procurement practices and its intercompany arrangements with management and the board to ensure that Ornge was following appropriate public-sector business practices.
These audit findings resulted in a high-profile reorganization of the government agency’s operations, with a significant adverse reputation impact on that agency and the provincial government.
Similarly, in its March 2013 report entitled Striving for Quality, Timely and Safe Patient Care: An Audit of Air Ambulance Services in B.C., the British Columbia Auditor General raised concerns over whether the air ambulance services were meeting patient care requirements. While the report determined that the government ran an open and fair competition to award the air ambulance services contract, the Auditor General found that the contract failed to establish performance measures to ensure that operational needs were being met:
My overall conclusion is that the BC Ambulance Service is unable to demonstrate the quality, timeliness and safety of its patient care. This is largely because the BC Ambulance Service lacks a performance-based approach for managing its air ambulance services. It has not clearly defined objectives or measures and—while it has processes to support quality care, timeliness and patient safety—it does not assess its own performance to find out how well it is doing and look for ways to improve. Further, it has not undertaken an overall assessment of service demands to ensure that paramedics and aircraft are located and dispatched to best meet patient needs.
Finally, in its March 2014 annual report, the Auditor General of Manitoba found significant procedural irregularities in the contract award process for air ambulance services, concluding that the government “was not in compliance with provincial tendering principles, policies, and legislation” when it directly awarded the contract without an open competition:
No public tender – Health signed a SPA for 10 years with the Shock Trauma Air Rescue Society (STARS). Health did not conduct a public tender. This did not comply with government’s tendering principles and policies. As well, contract information was not made available to the public as required by legislation. Health estimated total program costs at $159 million for 10 years. This included all staffing and servicing of a HEMS program and capital items, including a helicopter, equipment, and helipads.
The report found that the government failed to perform the appropriate value-for-money analysis, resulting in costs that were much higher than in other jurisdictions:
Value for money analysis was weak – Health obtained budgets during SPA negotiations showing costs-per-mission were likely to be 231% to 618% higher than other province’s programs. Despite these significant variances, Health performed inadequate procedures to assess if it would obtain value for money. Health did not conduct a detailed needs assessment to determine all requirements. Instead, it relied on STARS as the main source to define program delivery needs.
As these audits illustrate, high-profile program areas, such as air ambulance services, can attract a significant amount of audit scrutiny. Project teams operating in these high-profile areas should implement proper due diligence practices so they can demonstrate how they met their required operational objectives on budget, on time, and by the rules.
