$1bn Health Tender Loss Prompts Call for Government Procurement Rules Review

Auckland charity Visionwest Community Trust is urging a rethink of government procurement rules after missing out on work under a $1bn national home healthcare tender, saying the decision could weaken the wider support network available to vulnerable older people.

The issue, which has also been covered by The Post, follows Health New Zealand’s procurement of Home and Community Support Services under a five-year contracting process.

Visionwest understands a group of commercial providers has secured the work while several established charitable organisations have not been selected. Health New Zealand carried out an internal audit review of the procurement and concluded the process was fair, reasonable and transparent.

For Visionwest, however, the concern extends beyond the result of a single tender. The charity says the outcome exposes a broader policy question about whether government procurement rules give enough weight to the social value generated when public funding is delivered through not-for-profit organisations.

Charity Says Wider Community Value Should Count

Visionwest supports around 7,000 older and disabled people across Auckland, Bay of Plenty, Waikato and Rotorua Lakes District and employs more than 650 people providing care in clients’ homes.

Director of partnerships Brook Turner says the loss of the contract could affect established relationships between support workers and clients, while also reducing the organisation’s ability to maintain the wider services that sit around its home healthcare work.

“While bidding between for-profit and Non-profit organizations is an important consideration, the current approach also risks overlooking what happens to any surplus generated from delivering those services. In the case of charitable organisations, those funds are reinvested into additional community support rather than distributed as profit.”

Turner says public-sector purchasing decisions already take wider economic and social considerations into account in other areas. He points to procurement settings designed to support the use of New Zealand wool as evidence that contracting policy can look beyond the immediate price and delivery of a product or service.

“If government procurement can recognise the wider economic and social value of using New Zealand wool, it should also recognise the value of contracting New Zealand charities that reinvest their funding directly into local communities,” he says.

“This is not simply a question of who can deliver a specified number of home-care hours. It is about what happens to that funding after the core service has been delivered and the wider support available when a vulnerable person’s needs go beyond the terms of a contract.

“A commercial provider delivers the service it has been contracted to provide. A community charity such as Visionwest can also connect that person with housing, food support, financial mentoring, counselling and other assistance that may prevent them from falling through the gaps.”

Government Procurement Rules Could Give Greater Weight to Public Value

Visionwest wants tender assessments to more clearly recognise factors such as reinvestment in local communities, established community relationships and access to services outside the immediate scope of a government contract.

The charity is not arguing that not-for-profit status should guarantee a provider government work. Instead, Turner says the additional contribution made by community organisations should form part of the assessment when agencies compare potential suppliers.

“We are not saying private providers should be prevented from winning government work. We are saying a New Zealand charity that has spent decades building trusted relationships and an integrated community support network should not be assessed as though it is interchangeable with a conventional commercial operator.

“Charities have been established specifically to support people who have nowhere else to turn. That purpose and the additional value it creates need to be recognised in the procurement process.”

The New Zealand Government Procurement Rules provide the overarching framework used by government agencies when purchasing goods and services. Visionwest’s position is that the application of government procurement rules should more explicitly account for the broader value created by organisations that reinvest surpluses into community services.

Home Care Relationships at Risk of Disruption

One of Visionwest’s main concerns is the effect a provider change could have on older people who have built long-term relationships with individual support workers.

The charity says more than a quarter of the people it supports could be affected by the contracting decision, with the strongest impact expected across Waitaematā.

“The potential impact goes well beyond changing the name of the organisation providing someone’s home care,” he says.

“Many of these clients are older people who have developed trusted relationships with the same support workers over months or years. Those workers may help them get dressed, prepare meals, take medication safely or simply provide one of the few regular human connections they have.

“Disrupting these relationships can affect a person’s health, confidence, independence and safety.”

Unlike a standalone home support service, Visionwest’s clients can also be referred into other parts of the organisation for assistance with housing, homelessness, food, financial mentoring, family support and counselling.

The charity says revenue from government-funded contracts helps maintain the people, systems and community infrastructure needed to provide this broader network of assistance.

“Visionwest is not owned by shareholders and no dividends leave the organisation. The funding is reinvested into improving services and supporting the communities in which our clients live,” he says.

“Removing a major service from a charity does not affect just one operational division. It changes the organisation’s overall capacity to respond when vulnerable people have complex needs that do not fit neatly within a single government contract.

“The people most likely to feel that loss are those who have already fallen through the gaps and have nowhere else to turn.”

Visionwest Raises Questions Over Waitaematā Tender Option

The charity has also raised concerns about how it interpreted the tender process for Waitaematā.

Visionwest says it did not lodge a standalone proposal for the subregion because it understood Government Electronic Tenders Service guidance required the final submission to remain consistent with its original region-wide registration of interest.

After eight intended subcontractors became unavailable, Visionwest instead headed a consortium involving nine community organisations. It says it subsequently became aware that proposals covering individual subregions had been accepted from other bidders.

“Had we understood that a Waitematā-only proposal remained available, we would have submitted independently. We acted in good faith and structured our proposal around the procurement guidance provided, but the consequence is that our standalone capability in a community we have served since 1991 was never assessed,” he says.

Visionwest has operated in the community since 1991 and says the experience strengthens its case for examining whether government procurement rules and tender guidance adequately recognise established local capability as well as broader social outcomes.

About Visionwest Community Trust

Visionwest Community Trust is a New Zealand charitable organisation delivering community healthcare, social housing, homelessness support, food assistance, financial mentoring, counselling and family services.

The organisation supports approximately 7,000 older and disabled people to live independently in their homes across the North Island and manages around 1,000 social housing tenancies.

Communicating Complex Health and Community Issues

Government contracting decisions can have consequences that extend beyond the service specified in a tender, particularly where charities provide several forms of support within the same community. Explaining those effects clearly requires organisations to separate concerns about policy and procurement settings from claims about the integrity of a particular tender process. Media relations can help bring that distinction into focus while showing how changes may affect clients, employees and connected services. Impact PR works across health and community sectors on media relations, reputation and public communication, including health and medical PR where complex funding, policy and service issues need to be communicated accurately and credibly.