Victoria’s troubled HealthSMART project is under further scrutiny after the share-price of a major contractor plummeted. The $323m project, which is designed to manage the Victorian health system’s IT needs, is over 18 months late, or as a government spokesman reluctantly admitted to The Sunday Age in March, “depending on what is meant by target dates, there has been slippage across the program”.

Now there is more trouble brewing, with The Australian reporting that the company iSoft, which has a $22.5m contract to supply patient management software has lost 75% of its market value this year.

iSoft’s woes stem from its contracts with Britain’s National Health Service. In January its shares fell sharply after it revealed to the market that “…it is now clear that delivery of iSOFT application solutions to NHS Trusts will occur, in general, later than previously expected by the company. “ This followed the November publication by The Sunday Times of a leaked email which showed that massive delays are expected across the 6 billion pound ‘Connecting For Health’ project.

These problems were known at the time iSoft was granted the $22.5m contract for HealthSMART.

This not the first time that questions have been asked about HealthSMART. In August 2004, the DHS admitted that the tender process had been compromised after internal briefing documents were leaked to a potential bidder. This followed the revealation in July by Australian Financial Review that the diasppointed tenderer IBA had

“…. raised concerns over the probity of the patient and client management tender and lawyers acting for the software maker ….[had] sent two letters to HealthSmart’s probity auditor querying the involvement of one Human Services executive in the project.The executive, IBA has claimed, was formerly employed by TrakHealth, had personal relationships with a senior iSoft executive and a consultant to the company, and attended social functions as a guest of iSoft during the tender process.

The government has been extremely secretive about the whole HealthSMART project. When The Sunday Age asked in March for details about 7 different contracts they were given the run-around. As Jason Dowling commented:

THE State Government’s spin doctors were in overdrive when The Sunday Age questioned them about contracts for a new health IT system. After waiting a week for a reply, this is how seven different questions on how many consultants were employed under seven different contracts were answered: “HealthSMART engagements are based on a capped cost of deliverables and are not for particular individuals - organisations are engaged that have clearly demonstrated they can fulfil the tasks required. Whether one resource is allocated to ensure delivery of this service or 10 resources, it is the decision of the organisation providing the services. The terms and conditions of the engagement clearly state the expected deliverables.” The answer was repeated for seven separate questions. People are now “resources” in the world of spin and the public has no right to know how many people are being employed under taxpayer-funded $1000-a-day contracts.

In September Dowling reported that a company controlled by a former DHS contractor had won a closed tender worth $425,000 a year. The contract, worth $849,107, was granted to the company Arbiter with the work to be split between two people, Norma Fredrickson and Anthony Bibby. Bibby later left the company - and was promptly employed by the DHS to project manage HealthSMART. The government claimed that the price paid to Arbiter would drop but was unwilling to say by how much. Fredrickson had earlier received other contracts as part of HealthSMART, but again the government was unwilling to say how much they were worth. At that time Bronwyn Pike’s spin-doctor Ben Hart was indignant at suggestions that HealthSMART was running late. “It is on track both in terms of timelines and the budget — there is no basis for allegations that it is behind schedule,” he told The Sunday Age. Except that it wasn’t on time.

Given Labor’s track-record, would anyone like to bet that it’s on buidget?