Response to Rt Hon Winston Peters

10 November 2021

Rt Hon Winston Peters
New Zealand First Leader By email: c/-

Tēnā koe Mr Peters


Thank you for your email correspondence of 9 and 10 September 2021, and your letter of 9 September 2021. You have raised concerns about the procurement of saliva testing services by the Ministry of Health (the Ministry). 

Your questions

You have asked me to investigate the Ministry’s decision to award a saliva testing services contract to the Asia Pacific Healthcare Group (APHG). You have expressed a concern that the procurement “represents a serious departure from the Government Procurement Rules”, and specifically:

  • that there was only one tenderer (Rako Science) which had the necessary saliva testing accreditation and a tested product and they were not awarded the contract; and
  • that the decision to award the contract to APHG is connected to the acquisition of APHG by the New Zealand Super Fund (and a Canadian pension fund) or the “recommendation for saliva testing was only to assist the NZ Super Fund's latest acquisition [that is, APHG]”.

You also have some particular questions about the timing of, or the policy basis for, the Ministry’s tender for saliva testing, including:

  • “Was the recommendation for saliva testing made only to assist the NZ Super Fund’s latest acquisition of 4 August 2020?”;
  • “Why did the Government delay the introduction of saliva testing, with all manner of dismissive statements, yet now favour APHG whose product is not yet being tested?”;
  • “Why have we heard for months dismissive statements about salvia testing from the government and yet the Sir Brian Roche / Heather Simpson report of 28 September 2020 (a year ago), stated saliva testing should be rolled out as soon as possible?”;
  • “Why has a validated and accredited saliva test achieved widespread use around the world yet being side-lined in New Zealand?”; and
  • “Why did the Government decide to support the NZ Super Fund and Canadian pension fund option at the expense of the health and wellbeing of all New Zealanders?”.

The focus of our work

As you will be aware, I have a range of functions that help Parliament and the public hold public organisations to account for their use of public money. Those include annual audits of public organisations, monitoring expenditure against parliamentary appropriations, and looking more closely at how public resources have been used and the effectiveness of spending by public organisations through performance audits and inquiries.

Our work can include examining whether a public organisation has followed an appropriate or agreed process in making a particular decision and whether it has adequate controls in place to ensure that it can account for the money it spends and deliver value for money. However, it is outside my mandate to express a view about the merits of a particular decision or the policy sitting behind that decision. For this reason, I am not able to consider the Ministry’s policy decisions regarding the use of saliva testing as part of the public health response, including:

  • a decision to explore and procure those services; and
  • the Ministry’s view about the preferred form of saliva testing or the accreditation required for that testing.

Your questions regarding its policy decisions and the advice it relied upon in making those decisions are best directed to the Ministry.

Work we have done

Prior to your correspondence, concerns had been raised with our Office regarding the Ministry’s procurement of saliva testing. We reviewed those concerns, met with the Ministry to discuss those concerns, and sought additional information regarding the procurement, which we reviewed. Based on that work, we have prepared a letter to the Director-General of Health which we have attached. We will publish the letter on our website.

In the letter, we comment on some aspects of the process. We saw that:

  • the Ministry did not have a procurement plan in place when it went to the market for saliva testing services, which we would have expected to see;
  • the planning for the procurement process was carried out at the same time as the procurement itself, which is not good practice; and
  • conflicts of interest were not well managed by the Ministry.

As you will see in the letter, we have made comments about how the Ministry can make improvements to its processes in future to enhance trust and confidence and minimise any perceptions of influence. We also make some comments about the purpose and benefits of procurement plans. We have also outlined some questions that the Ministry, and other public organisations, can ask themselves when carrying out a procurement process involving technical or specialist subject matters.

Your particular questions

In relation to your questions that we can comment about, we note the following.


As we outline in the Background section to our letter to the Director-General, the Request for Proposal issued by the Ministry required the successful supplier/s to have the capability to have tests processed by a laboratory with Independent Accreditation New Zealand (IANZ) accreditation to ISO 15189 for Covid-19 polymerase chain reaction testing (specifically using saliva as the sample). It was also a pre-condition in the RFP that the supplier would either already have this accreditation or be reasonably able to achieve this by mid-April 2021.

The Ministry told us that it ensured that APHG had the necessary IANZ accreditation before it entered into the contract.

NZ Super Fund

We reviewed a significant amount of information about the process, including internal documentation relating to the procurement panel’s decision-making, and debriefing documentation for unsuccessful tenderers. Through that work, we did not identify any information that substantiated your concerns regarding any connection to the acquisition of APHG by the NZ Super Fund, or that there was any influence by the NZ Super Fund in the decision made by the Ministry.

General comment

I expect that the Ministry, like any public organisation, will have proper controls in place for the delivery of the services it has contracted for. The Ministry’s activities will continue to be monitored by my Office as part of our ongoing work. On this basis, and based on the work we have done, I do not intend to carry out further inquiry work on this matter.

Thank you again for writing to us. Because of the level of public interest in this matter, we will publish this letter on our website.

Nāku noa, nā

Signature - JR

John Ryan
Controller and Auditor-General