The Manitoba government did not follow proper procedures when it signed a multimillion-dollar contract with the STARS air ambulance service, and it's paid way more than other provinces, a report by the provincial auditor general has found.

The report by Auditor General Carol Bellringer, released on Wednesday, looked into why the Shock Trauma Air Rescue Service was brought to the province without the contract being tendered.

When Manitoba Health signed a 10-year services purchase agreement (SPA) with STARS in 2011, no one else was given a chance to submit bids.

As well, details of the untendered contract were not made public, as required by law, the audit report stated.

"We concluded that the procurement of the helicopter ambulance program was not in compliance with provincial tendering principles, policies and legislation; and that [Manitoba] Health conducts some oversight of the SPA, but not in all key areas," Bellringer stated in a news release.

Her audit found that the total contract costs $159 million over 10 years, which covers all costs including the construction of a helipad.

Criteria not met

Bellringer says there are several instances when it's acceptable for a government contract to not be tendered or put out for competitive bids:

  • When there is a single source, meaning there is only one supplier.
  • When there is a sole source, meaning only one supplier can do it.
  • In cases where it's urgent or an emergency.

But in the case of the STARS contract, none of those criteria was met, the report found.

Bellringer said it's important to put out a tender to ensure potential players are not missed.

"At the end of the day you might have landed exactly where you did, but there's no way to know unless you've put the tender out," she told reporters.

Carol Bellringer

Manitoba Auditor General Carol Bellringer's report, released on Wednesday, raised concerns about the provincial government's contract with STARS and the patient care provided by the air ambulance service. (CBC)

She added that the STARS contract is not an isolated case: elsewhere in the report, auditors found problems with several other contracts in other government departments.

"If you want to keep your eye on the bottom line and you want to keep those dollars under control, you got to do it," she said.

"So am I panicking about it? No. Am I concerned? Absolutely. Do I think it's an isolated incident, and there aren't others happening? No, I don't, because of the report that we did on the waiving of competitive bids."

The report found that a Manitoba Health feasibility study found that an air ambulance service would save 35 to 50 lives a year.

Finance Minister Jennifer Howard said that was the government's main focus, but she admitted that there was some wrongdoing.

"I take her point that that was the policy, and we'll have to pay closer attention to following that policy with untendered contracts," Howard said.

But Progressive Conservative health critic Myrna Driedger accused the NDP government of rushing through the STARS contract to score political points before the 2011 general election.

"You have a government that was so in a hurry to get that red helicopter here before an election, and use it as an election prop, that they did not do their due diligence," she said.

Paying up to 618% more per mission

During negotiations with STARS, Manitoba Health was aware that it would likely be paying 231 to 618 per cent more per mission than what other provinces pay for similar services.

Bellringer said despite what she called "significant variances," Manitoba Health did not do enough to determine if it would get value for its money and instead "relied on STARS as the main source to define program delivery needs."

"They should have done more," she said.

"Despite those differences, they really did not assess whether or not they would be obtaining value for money. Those variances are extreme, and most certainly it would warrant a much more detailed analysis."

But STARS spokesman Colin Fast says comparing costs between provinces is like comparing apples and oranges.

"We do know that as we continue to be dispatched more here in Manitoba and fly more missions that that per-mission cost is going to come down considerably," he told CBC News.

Patient care, operational concerns raised

Founded in Alberta in 1985, STARS operates a helicopter air ambulance service in Manitoba, Alberta and Saskatchewan.

STARS has had a rough track record in this province, as it's the only service of its kind to have been temporarily suspended because of safety concerns.

The air ambulance service's flights were grounded in December following a number of critical incidents, including one in which a young patient — two-year-old Morgan Moar Campbell — suffered brain damage.

The Manitoba government allowed STARS to resume flights earlier this month.

On Wednesday, Bellringer said Manitoba Health lacks a comprehensive quality assurance process over the patient care that STARS provides.

Her audit found that two associate medical directors with the province sent letters in April 2013, flagging six missions with which they had concerns regarding medical management.

The officials recommended that STARS flights be grounded in May 2013, following the mission involving Morgan Moar Campbell.

"The number of concerning cases that I am hearing about is growing daily," one letter stated in part.

"I recommend grounding the STARS vendor pending a complete review of all above cited cases. I believe there is enough evidence of serious patient concerns and infractions to justify such an action."

As a result of the letter, a meeting took place and a compromise was reached, allowing STARS to continue flying but requiring a doctor to be present on all inter-facility flights.

The audit also highlighted concerns about STARS operations, stating that flight manifests were incomplete or late, and there were four occasions in which STARS ignored directions to stand down.

As well, the audit team was told of four instances in which a STARS referral emergency physician could not be reached to consult on a patient-care issue, according to the report.

The responsibility for helicopter landing zones was not clear, according to the audit, which noted that a STARS aircraft has landed where it was not authorized to land.

The report also said performance reporting was inadequate, and the monitoring of STARS' financial matters was weak.

Read the audit report on STARS

Read the section from Auditor General Carol Bellringer's annual report that discusses the STARS air ambulance service: