Watchdog says €30.5m spent on ventilators for Covid-19 ‘still being pursued or unrecoverable’

The HSE ordered almost 3,500 ventilators, more than 10 times the estimated number clinically required at the start of the Covid-19 pandemic, a report from the State’s spending watchdog says.

The Comptroller & Auditor General’s report on the purchasing of ventilators concluded that the HSE did not receive value for expenditure totalling €30.5 million on the medical devices bought in the early days of the pandemic.

The HSE is currently pursuing refunds of €22.3 million paid in advance for orders that were cancelled or where the ventilators received were deemed “not fit for purpose”, the report said.

A further €8.1 million in spending is considered “unrecoverable” with most of this, some €6.8 million, spent on ventilators that the HSE ultimately did not need and which have since been donated to health authorities in India.

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In total, the HSE made advanced payments to new suppliers of 2,198 ventilators totalling €81 million, of which some €50.5 million was later refunded.

The watchdog report refers to the period in early 2020 when ventilators were identified as a critical medical device to treat patients severely affected by Covid-19 infection and the HSE’s frantic efforts to acquire more ventilators in expectation of a surge in demand for critical care.

The spending decisions were made by the HSE in a four-week period in March and April 2020.

In March 2020, when the first Covid-19 death in the State was recorded, the HSE identified 533 ventilators available for use. By late March 2020, HSE clinical staff estimated as part of its “surge capacity planning” that an additional 326 ventilators would be required.

However, in response to a proposal from the HSE, the Department of Health on March 21st, 2020 sanctioned the purchase of 1,900 ventilators at an estimated cost of €73.5 million, an implied average cost of €38,700 per ventilator.

The comptroller was “unable to find a business case prepared by the HSE” to support the requirement for 1,900 ventilators.

“Instead, the quantity for which sanction was requested appears to have been based on the orders that the HSE had already placed with potential suppliers and orders that were at an advanced stage of negotiation,” the report said.

“Between March 3rd, 2020 and April 14th, 2020, it can be identified that the HSE placed orders for almost 3,500 ventilators at a total cost of €129 million – nearly twice the number approved by the department and over 10 times the estimated number clinically required.”

Performance tests were carried out for the HSE on 100 ventilators that came from new suppliers and 41 failed. None of the 467 ventilators from new suppliers were ultimately used.

The watchdog said the HSE approached established suppliers at first in its search for more ventilators but due to concerns about their capacity to meet demand, the HSE began investigating other suppliers with the assistance of IDA Ireland.

Direct approaches were also received by the HSE from a variety of sources with offers of assistance.

Most of the new potential suppliers were not involved in manufacturing ventilators and had “little or no experience” in supplying the devices but offered connections to manufacturers.

“No due diligence checks were carried out for four of the 10 new potential suppliers to whom the HSE made advance payments,” the comptroller said.

Sinn Féin TD Brian Stanley, chairman of the Public Accounts Committee, told RTÉ that he accepted that the spending occurred at a “time of crisis” but the HSE dealt with suppliers that “had no experience in the supply of ventilators and [were] basically middlemen and middlewomen”.

There did not seem to be “any serious check” conducted on the credibility of suppliers, he said.

The watchdog recommended that practical guidance should be developed for public bodies on the use of advance payments, including setting out circumstances where they can be made and providing a methodology in determining when an advance payment is appropriate in a contract.