The Tasmanian government has come under scrutiny after awarding $61 million worth of external labour hire contracts without a formal tender process, as part of its significant Bluegum health system digital transformation program, ABC News reported today. The contracts, numbering 742 in total, were reportedly issued to 65 different companies.
According to ABC News, the individual value of each of these contracts did not exceed $99,999. This figure is significant as it falls below the state’s threshold that mandates a formal tender procedure, allowing for direct awards. At the time of the report, approximately $50.6 million of the total $61 million under these agreements had already been spent.
Among the companies engaged, 22 firms reportedly secured at least 10 agreements each. Ignite Project Services Pty Ltd was identified by the ABC as receiving the largest share, with 86 contracts amounting to $6.96 million.
The practice has drawn criticism from Independent Legislative Council member Bec Thomas, who, as reported by the ABC, has called for explanations from the Department of Health. Ms Thomas questioned not only the compliance of individual contracts with procurement thresholds but also whether authorities had adequately assessed the overall volume of spending and the appropriateness of this approach for Tasmanian taxpayers.
Further concerns were raised by Auditor-General Martin Thompson. The ABC reported that Mr Thompson expressed apprehension about the procurement methods, finding that the department had breached Treasurer’s Instructions on 80 occasions. The Auditor-General also identified instances where contracts were only formalised after the successful company had already commenced work.
In response to questions from Ms Thomas, the government stated that the Health, Treasury, and Finance departments have since agreed upon revised procurement procedures for engaging personnel under the Bluegum project. These updated procedures now include a structured quotation process for projects valued up to $250,000, with open tenders required for more expensive undertakings. Oversight for these processes is now conducted by a dedicated procurement review committee, the government advised.
The Bluegum Health Transformation program itself is a substantial $476 million initiative aimed at delivering a statewide Electronic Medical Record (EMR) and broader system-wide changes to enhance healthcare across Tasmania. The Department of Health describes it as an evolution of an existing digital health transformation program, designed to create a more connected, person-centred, sustainable, and efficient health system for all Tasmanians.
For more details on this story, readers are encouraged to refer to the original report by ABC News (Tasmania).