The list of untendered contracts awarded by eHealth Ontario continues to grow, with information received by CBC News revealing yet another contract that was never open to competitive bids.

EHealth Ontario CEO Sarah Kramer has defended previous sole-sourced contracts as necessary due to urgency. (CNW Group/eHealth Ontario)

Sources say eHealth CEO Sarah Kramer signed a contract worth more than $600,000 to headhunting firm Egon Zehnder International to recruit high-ranking employees for the agency.

The letter of agreement is dated Feb. 5, but sources say a verbal deal with Kramer was reached in November, the same month Kramer took office.

The eHealth CEO has defended nearly $5 million in sole-sourced contracts doled out in the agency's early months as justified due to the urgency of getting the ball rolling on Ontario's electronic health record system, set for release in 2015.

But sources say the agency had access to two headhunting "vendors-of-record" at the time, raising questions about why it didn't continue using those companies. Either one could have done the job under existing rules on contract tenders.

Egon Zehnder International was given the job of recruiting vice-presidents to replace some of the nine who were fired during the first four months, plus filling several newly created positions of senior vice-president.

Since eHealth arose from the ashes of the embattled Smart Systems for Health Agency last September, the new level of senior VP has been added to the organizational structure. Two individuals recently hired to senior vice-president posts are earning more than $700,000 a year, putting them among some of the highest paid civil servants in Ontario.

3 consultants exit

CBC News has also learned that three high-priced consultants have left eHealth since the controversy broke last Wednesday. They were given notice last Friday that their services were no longer needed, eHealth spokeswoman Deanna Allen said.

The consultants were:

• An executive assistant from Courtyard Group who was earning about $1,700 a day;
• Donna Kline, a consultant who earned about $192,000 in a five-month period and was working as senior vice-president of communications.
• Chris Dingman, whose company Strategy Works Inc., received a $162,000 untendered contract from the agency to "provide leadership for organizational change."

This latest information comes on the heels of news revealed by CBC News of personal connections between top eHealth officials and executives at two companies awarded more than $3.3 million in untendered contracts.

When applying for the eHealth CEO post, Kramer's resume listed an Accenture Inc. executive, whose wife was a childhood friend, as a personal reference.

Several consultants have left the provincial agency, eHealth Ontario, since it become embroiled in questions over spending and employment practices. (CBC)

Accenture was awarded three sole-sourced contracts worth $1.3 million, two when Kramer was not yet hired but advising the board of directors and the third a couple months after she took office on Nov. 3, 2008.

Also in question are ties between the board of directors chairman Dr. Alan Hudson and a consulting firm that was granted about $2 million in untendered contracts.

Sources describe Hudson as an old colleague and mentor to Courtyard Group's founding partner Michael Guerriere. Courtyard received contracts from Cancer Care Ontario when Hudson was head of that agency.

Courtyard was awarded a $915,000 untendered contract in October 2008, when the board, with Hudson at its helm, apparently held the agency's purse strings. Courtyard later got $1 million in contracts under Kramer.

Fire Hudson and Kramer, opposition says

Questions about eHealth dominated question period at Queen's Park on Thursday, the final day before the House rises for the summer, with calls for both Kramer and Hudson to be turfed.

"Some things have taken place there that we simply cannot condone," Premier Dalton McGuinty acknowledged, but he rejected calls to fire the two.

"I think the fair thing to do in the circumstance is to allow the auditor general to do his work," he added, referring to the review of spending practices currently underway.

Interim Progressive Conservative Leader Bob Runciman responded: "By not taking action, the minister has condoned this offensive abuse of taxpayer dollars."

Health Minister David Caplan stressed that Hudson has made "tremendously valuable contributions" to the province's health care sector.

The health minister also reiterated that he has asked Ontario's auditor general to expedite his review of eHealth Ontario that was originally due for December. It may be released as early as August or September.

The provincial agency has also appointed an outside professional services company, PricewaterhouseCoopers, to probe its employment and spending practices. It's the same consulting firm that reviewed eHealth earlier this year and approved its spending practices.

When the firm concludes its work, it will report its findings to eHealth's finance and audit committee, whose members include Kramer and Hudson.

EHealth Ontario was created last fall out of a merger between the Ministry of Health's electronic health program and the SSHA, an agency criticized for spending more than $600 million over its six-year lifespan and producing little to show for it.

In recent years, SSHA was blasted for its high percentage of spending on consultants, lack of strategic plan and poor reputation in the health-care community.

The agency had begun cleaning up and moving away from its dependence on consultants, but McGuinty's Liberal government quietly folded the agency into newly created eHealth Ontario last September.

With the formation of a new agency, the release date of fully electronic patient health records was pushed back three years to 2015 and the government allotted a three-year, $2 billion budget to eHealth.

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