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It isn’t good

Summary:
The Auditor General confirms the general open secret around Wellington about shameless conflicts of interest in covid test procurement. It's good that he's written it down. He's unlikely to be sued for defamation by anyone involved. Nobody else has been able to say much, because while everyone knows, nobody who could officially know it would ever go on record, because they worried about being punished by the Ministry of Health in repeated games. Pattrick Smellie provides an excellent summary at BusinessDesk. You should subscribe to BusinessDesk.Multiple poorly managed conflicts of interest, no formal procurement plan, and a failure to properly appoint a probity auditor are among the failings in the health ministry’s procurement of saliva testing in a report published today by the Office

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The Auditor General confirms the general open secret around Wellington about shameless conflicts of interest in covid test procurement. 

It's good that he's written it down. 

He's unlikely to be sued for defamation by anyone involved. 

Nobody else has been able to say much, because while everyone knows, nobody who could officially know it would ever go on record, because they worried about being punished by the Ministry of Health in repeated games. 

Pattrick Smellie provides an excellent summary at BusinessDesk. You should subscribe to BusinessDesk.

Multiple poorly managed conflicts of interest, no formal procurement plan, and a failure to properly appoint a probity auditor are among the failings in the health ministry’s procurement of saliva testing in a report published today by the Office of the Auditor General (OAG). 

The watchdog makes a number of damning findings and expresses “serious concerns” about the way the ministry conducted the highly controversial $60 million contract to provide saliva testing that was awarded to Asia Pacific Healthcare Group (APHG) in May. 

Among key findings was that four of the five people on the panel selecting the saliva testing provider had declared possible conflicts of interest, including “past and current employment relationships with staff from potential respondents or associated laboratories”.

RNZ also reports on it. The Auditor General's discussion is here

So.

Rako's saliva testing was up and running from January. We could have been running accurate saliva-based PCR testing at scale since then. The incompetent Ministry of Health got bad advice from incompetent advisors who had not been able to make PCR saliva testing work on their own. That led Bloomfield to repeatedly make assertions about the inaccuracy of saliva testing at the 1pm standups. He was wrong every time. 

Then they ran a fundamentally flawed procurement process riddled with conflicts of interest that led to the awarding of the saliva testing contract to a provider with which the Ministry was well familiar, but which had no appropriately validated test. 

We still have no deployment at scale of saliva-based PCR testing. Rako provides its testing to private clients. 

We could have had mass deployment of far more rapid, and accurate, saliva-based PCR testing in every outbreak since January. It would have found and stopped things faster. But the incompetent Ministry of Health just did not want to. Remember that speed in getting results back matters. It helps in contact tracing. And it helps in avoiding test hesitancy. If you figure you're going to be stuck home for 2-3 days waiting on a test result because of a sniffle, will you bother? No. Test hesitance matters - though we have no clue in this case whether the likelihood of being stuck waiting for results was the specific barrier in Stratford

And now we have a large outbreak that is out of control and that has little prospect of the governments' getting back on top of. We could have had mass deployment of saliva-based PCR testing in South Auckland when this all started, as surveillance. That too could have caught things before it got out of control. But a different government-preferred advisor said it would be racist to run surveillance testing in the place where it would be necessary. And they didn't want to deal with Rako anyway, and they had nothing else as options. 

Yesterday, Select Committee reported back on the COVID-19 Public Health Response Amendment Bill (No 2). Labour dominates the committee. And so the Committee reported back that they see no problem in giving the government the power to just go and requisition all of Rako's test materials and testing capacity. I'd explained here all the problems in that part of the legislation. My submission to the Select Committee is here

I understand that one view is that the requisitioning bit is seen as no big deal, by the incompetent Ministry of Health and by the people who are happy to take advice from the incompetent Ministry of Health, because similar arrangements often get worked into procurement contracts in health. But there is a fundamental difference between a contractual deal where part of the bargain is that the government can compel supply at a fixed price in a surge, and just imposing that without any contract. If it's worked into the contracting, it works into the price. People take the deal or they don't. 

So we've wound up with botched procurement on covid testing, no real capacity to deploy at scale, massive public health cost, and consequent threats enacted through legislation to just steal all of the testing capacity from the provider who can deploy at scale. 

I do not understand how New Zealand maintains a clean record on corruption indices. Is everywhere else really that much worse? Or is it that passing legislation allowing this kind of expropriation doesn't count as corruption because it's all in the open and legitimized by Parliament?

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