A Manitoba family whose toddler was brain-damaged after a STARS flight is angry to hear the provincial government mishandled the contract with the air ambulance service, according to the family's lawyer.

Morgan Moar Campbell was two years old when he was deprived of oxygen during an air ambulance transfer from Brandon, Man., to Winnipeg in May 2013.

The boy experienced severe brain damage. His family is in the process of suing STARS.

"Their life is in turmoil. It's upside-down. They're dealing with their child every day, wondering what's around the corner," Robert Tapper, the family's lawyer, told CBC News.

"It is as awful a thing that can happen to young parents as could ever happen."

The Manitoba government's contract with STARS came under fire on Wednesday by provincial Auditor General Carol Bellringer, who said the province did not follow proper tendering procedures when it signed the $159-million, 10-year service agreement in 2011.

Not only did the province not allow anyone else to submit bids, but details of the untendered contract with STARS were not made public, as required by law, according to her report.

The audit also found that Manitoba Health was aware that it would likely be paying 231 to 618 per cent more for each STARS mission than what other provinces pay for similar services.

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

Tapper said Morgan's family is upset and angry to hear the audit's details about the province's contract with STARS.

"It's very hard, and there's a lot more to this than the public knows," he said Wednesday.

The family's case is moving ahead, Tapper said.