HSE still pursuing ventilator suppliers for refunds of more than €22m through Chinese legal system

The HSE is using the Chinese legal system to pursue companies who supplied it with ventilators during the Covid-19 pandemic for refunds of more than €22 million.

Around 3,500 ventilators – more than 10 times the estimated number clinically required at the time – were ordered by the HSE amid an international scramble to secure the machines at the start of the pandemic. The authority deliberately over-ordered in an attempt to get 1,900 ventilators for use in the health service.

A Comptroller & Auditor General (C&AG ) report concluded the HSE did not receive value for €30.5 million it spent on the ventilators. Bernard Gloster, the HSE chief executive, and Stephen Mulvaney, its chief financial officer, were questioned about the purchases during a meeting of the Dáil’s Public Accounts Committee (PAC) on Thursday.

Mr Mulvaney defended the HSE’s actions at the time, saying: “We chose to put patient risk in advance of financial and procurement risk ... We could just as easily be sitting here having an inquiry about why we didn’t have enough ventilators.”

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About 100 ventilators delivered from China did not meet the required standards and have been in storage at a cost €75,000 over the last three years.

Mr Mulvaney said the HSE initially sought refunds of €50.5 million and that €30 million has been recovered, with associated legal fees amounting to some €500,000.

“There’s €22 million being pursued. We’re not saying we’ll get it all. We will continue to pursue it for as long as it makes sense to do so and it does make sense to do so,” he said.

Earlier, the C&AG Seamus McCarthy told the committee that “good procurement practices can assist in achieving value for money even in emergency situations”. He said that at the beginning of March 2020 the HSE believed more ventilators were urgently needed to deal with an expected surge in demand for critical care later that month.

The HSE procured 581 additional ventilators – which met EU regulatory standards – from established suppliers at a cost of €20.5 million.

Over a four-week period, spanning March and April 2020, the HSE placed orders for almost 3,500 ventilators at an agreed cost of €129 million. This was almost twice the number it had been sanctioned to purchase.

The C&AG’s review found no due diligence checks had been completed on four of the new suppliers and that the extent of the checks carried out with another six varied. No benefit or value has been received by the HSE for expenditure totalling €30.5 million, with some €8.1 million deemed unrecoverable and some €22.3 million still to be pursued.

Mr McCarthy said he previously drew attention to write-offs on personal protective equipment (PPE) stocks and hand gels, totalling more than €483 million, due to unsuitability, obsolescence or price fluctuations.

He acknowledged that procurement in an emergency situation is “challenging and is unlikely to result in optimum value for money outcomes”. However, he added: “It’s important to learn the lessons of experience and to improve processes where we can so that better outcomes can be achieved in the use of public resources in similar future circumstances.”

Mr Gloster said early 2020 was a period of “enormous uncertainty” given there was no vaccine to protect against a “deadly” virus.

“There was a serious excess in demand in the global healthcare products market with what were then characterised as ‘eBay style bidding wars’ and normal purchasing and sourcing practices did not apply,” he said.

Mr Mulvaney said the only way to get ventilators then was to pay in advance and over order because “we were being gazumped continually”.

The committee heard that 365 of the ventilators purchased were donated to India, where they are being used.