HSE facing huge EU fines over tender delays
The taxpayer could face huge EU fines because of the failure of the Health Service Executive (HSE) to issue new tenders for agencies to provide doctors and nurses across the country.
In March 2011, a small number of recruitment agencies were awarded exclusive contracts providing locum doctors and nurses to hospitals within specific HSE regions throughout the country. These contracts were not to exceed a period of 48 months.
But three years after the contracts were due to end, they are still in operation - effectively blocking new agency suppliers from entering this lucrative market supplying staff to the health service.
Under the original plan, whichever firm won the contract in each HSE region and for each speciality became the sole supplier for the profession within that area.
So while Firm A might have the sole contract for supplying locum doctors in the south, Firm B might have the contract for supplying nurses in the same region.
Documents released under Freedom of Information Act show that while these contracts were due to expire by March 2013, the HSE continues to use the original winning agencies on an exclusive basis.
The absence of a proper tender or procurement process may leave the HSE open to accusations of unfair and illegal state aid and facing fines from Europe.
When the issues was raised with the HSE last week it said that it was "currently at an advanced stage of preparation for a new tender".
It added that the process was "delayed due to significant reorganisation of the health service".
However, it was unable to give a time frame for a new tendering process.
In March 2011, a company named Global Medics won the contract to supply locum doctors in the HSE South region, while another company, Locum Express, won the sole right to supply locum doctors to the HSE's Dublin Mid-Leinster area, Dublin North-East and HSE West.
These contracts designate the winning company as the sole provider of locum doctors within the region.
However, it appears that these companies also provided staff into regions which were not part of their original successful tender.
This was done by means of a 'backfill' system, whereby a company who had lost out on a tender for a particular area could supply doctors to that area in the event of the first firm being unable to supply a suitable doctor.
One of the firms awarded a contract back in 2011 has doubled its performance in recent years.
According to its published accounts, Global Medics' turnover increased in two years (2013 and 2014) from €19.6m to €41.6m.
Its gross profit also increased from €3.6m to €6.3m during the same two-year period.
The accounts noted that the €22m increase in turnover was achieved wholly from its business in Ireland.
Global Medics was acquired by a UK company, the Impellam Group, in 2015 for £37m (€48m).
Terence Cosgrave is the editor of 'Irish Medical News' which is being re-launched this month @irishmednews