In this report, the Auditor-General for New South Wales, Margaret Crawford, examined whether HealthShare NSW, a part of NSW Health, has the required contract management capability to effectively manage goods and services contracts valued over $250,000.
The report found that HealthShare has a procurement framework that should support effective contract management, but it is not applying it consistently. In particular, the audit found that HealthShare was not applying key contract management elements to over 80 per cent of the high-value contracts it manages. The audit also found that HealthShare’s contract management practices were limited by inadequate performance monitoring.
'Effective contract management is essential to ensure the contracts HealthShare enters into are delivering as expected and ensuring value for money,' said the Auditor-General. 'Without this, the value for money or savings HealthShare achieves when it negotiates these contracts is at risk of being eroded over the life of the contract.'
The report recommends that NSW Health develop a performance improvement plan to ensure HealthShare is fully compliant with procurement policies and that NSW Health meets its obligations under the Government's Accreditation Program for Goods and Services Procurement.
HealthShare is a NSW Health entity responsible for providing shared services, including procurement, to support the delivery of patient care within the NSW health system. In 2018, HealthShare procured high value goods and services contracts with an annual estimated total spend of around $1.8 billion, with most of the contracts of long duration.