The Federal Ministry of Health also needs medium-term support from external consultants in the procurement of protective equipment. As the ministry said in response to a capital inquiry, Minister Jens Spahn (CDU) wants to rewrite the order for the period after November. So far, the Ministry has been supported by the testing and consulting company EY in the purchase of several hundred million protective masks. Spahn had awarded the contract to EY with a volume of almost 10 million euros in spring. This is why proceedings are currently underway at the Federal Cartel Office.
A Spahn spokesman pointed out that EY’s mandate is limited to November. “For the administration of the purchase and procurement of personal protective equipment for the German health system, the Federal Ministry of Health needs external support even after November 2020”, he said. EY’s competitors can now also apply for the follow-up order. However, it is unclear whether other consulting firms are interested in the contract, given the history and the public attention. In the past few weeks, the mismanagement of the mask purchase had turned into a political mortgage for Spahn.
At the height of the Corona crisis, the Ministry of Health ordered more than 200 million FFP2 masks and 60 million simpler surgical masks in a so-called open house process. For this, surcharges went to more than 700 suppliers, who were guaranteed a purchase price of 4.50 euros per FFP2 mask. During the processing of the orders, however, there were massive problems – among other things because the delivered masks had quality defects in some cases.
In addition, it also became apparent that the guaranteed price was far too high from today’s perspective: FFP2 masks can now be obtained in China for less than 50 cents. In many cases the ministry refused to pay for the goods delivered. Some suppliers already suspect that the ministry only specifies the quality defects in some cases because it does not want to fulfill the contracts that are disadvantageous for the federal government. More and more suppliers are now defending themselves with lawsuits.
Budget funds are running out
The federal government has ordered a total of more than two billion masks via various procurement channels since the beginning of the Corona crisis. According to information from Personal-Financial.com, Spahn now has problems paying for the masks ordered within the budget provided. Spahn’s Ministry has therefore already agreed a payment term for the coming year with individual major suppliers.
In addition to the chaotic processing of orders, the way in which the order was placed with EY was recently criticized. In the meantime, the auditing and consulting company, which is currently heavily criticized for its role in the accounting scandal at the insolvent payment processor Wirecard, was involved in the mandate with more than 100 consultants and lawyers. In the Wirecard case, an investigation is currently underway against EY at the APAS review center responsible for auditors. Nevertheless, the federal government considers government contracts to be possible in principle.
Even the support from the external consultants could not prevent the dispute over unpaid bills from escalating recently: There are now more than 50 lawsuits against the Ministry of Health at the Bonn Regional Court. In the meantime, proceedings are also pending at the Federal Cartel Office because of the direct award of the contract to EY. Now the follow-up order is to be put out to tender.
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