The Department of Health should consider terminating its contract with Telstra Health to operate two cancer screening registries, a parliamentary committee has concluded.
Telstra’s health arm in May 2016 was awarded a five-year, $220 million contract to establish and operate the National Cancer Screening Register (NCSR).
In the wake of the announcement there was controversy over having a for-profit entity operating the new service.
When the project was first announced in 2015, the then health minister Sussan Ley said that it would replace eight separate state and territory cervical screening registers and “an outdated, paper-based, bowel screening register which has created a fragmented system”.
Legislation to establish the register was only introduced and passed by parliament after the contract had been awarded.
A report by the Australian National Audit Office released in June 2017 found that the Department of Health had effectively managed an open tender process for the register. However the reported also concluded that the “effectiveness of the procurement has been reduced due to inadequate consideration of risk during planning and poor management of probity and conflicts of interest”.
“The objectives sought by the Government have not been achieved in the agreed timeframe and additional costs have been incurred as a result,” the ANAO found.
The ANAO said that “the full extent of the project’s complexity, risk and the potential consequences of project failure or delay were not communicated to the Government at the point in time the funds were allocated.”
The bowel cancer register was expected to go live in March 2017, and the cervical cancer register in May 2017.
An inquiry by the Joint Committee of Public Accounts and Audit heard that a revised implementation date of 1 December 2017 for the transition to a national cervical cancer screening register was partially achieved.
However, the committee said in a report on the ANAO’s audit of the NCSR contract, the Department of Health “was not able to nominate a start date for the bowel cancer register, advising the Committee that ‘there isn’t a target date for the bowel cancer screening’ and that it is ‘more likely later in calendar year 2019’.”
The committee has called on the department to report back to it on “whether, in the circumstances of such serious underperformance by Telstra Health, it may be in the Commonwealth’s interests to terminate the contract and pursue other options for either or both registers”, as well as penalties that the government may be able to seek from the company.