Dept bids to stop software shutdown

THE NORTHERN Cape Department of Health is in the process of obtaining an interdict to prevent Mindmatter (Pty) Ltd from shutting down its software systems that capture electronic patient records.

The system also keeps track of medicine stock levels at pharmacies.

The department has requested that the interdict remain in effect until December 31, or until new software is implemented.

Northern Cape High Court Judge Bulelwa Pakati on Friday postponed the matter until December 12.

Mindmatter indicated that as from October 9 it had displayed messages on all computers at stateowned health facilities that the system would be automatically shut down due to non-payment by the department.

Mindmatter stated that the Department of Health was in arrears for the payment of licence fees to the value of R605 347.06 per month, while it owed the company R30 million for service fees.

A service level agreement was entered into in 2010, where the contract was extended on a yearly basis up until December 2016.

The contract would have come to an end in September this year. Negotiations were entered into to try and extend the contract until the end of the year.

According to Mindmatter, there is no valid agreement and the department is in arrears of payment for at least 15 years.

The managing director of Mindmatter, Ambrose Jacob van Eeden, indicated in court papers that the company was willing to provide services as it realised that the department was not able to function or provide health care services without their records system. He, however, pointed out that they were not able to sustain the business as the department was not paying their operating costs.

“The monthly upkeep of the business is approximately R800 000 per month, which over a period of several months would create serious financial distress. The department has a long history of delinquent debt and I have no doubt that this will continue.”

Van Eeden questioned what contingency measures would be put in place on New Year’s Eve if the new software system was not implemented in time.

“It is unclear … whether it has even sourced a new system, let alone commenced the arduous process of integrating the new system with the data stored on the system.”

Van Eeden also urged the department to disclose the identity of the new service provider, the amount of the tender, whether tender processes were followed and what provisions were in place to ensure the smooth integration of data onto the new system.

He pointed out that no licence fees had been paid for 155 workstations at hospitals, clinics and depots in the Province.

“In addition, software has, without the company’s knowledge, been installed in 208 additional workstations without any licence fees being paid. These unauthorised licences must be regularised and brought in line with the licence fees and must be reflected on the software licence agreement.”

Van Eeden indicated that the outstanding licence fees amounted to over R1.1 million while the historic underpayment amounted to R72 million.

“Several letters were addressed to the department, their attorneys and national government, notifying them of legal proceedings that would be instituted. The failure of the department to timeously and consistently affect payment of the licence and service fees will result in substantial legal proceedings being instituted against the department for the recovery of the arrears, at great cost to the company.”

Van Eeden stated that a dispute arose in September when he attempted to negotiate an extension of the contract with the HOD for Health, Steven Jonkers.

“Jonkers informed me expressly that the department did not want the system any longer and that a new system was being sourced, or had already been sourced to replace it. I was taken aback as this was the very first indication that the department intended sourcing a new system that obviously would require significant time to hand over.”

Oblivious

Van Eeden indicated that Jonkers appeared to be oblivious to the R30 million that was owed to his company or the implications of turning off the system.

“No agreement was reached regarding the three-month extension of the contract. There was simply no way that a new system could be installed and be operational in three months.”

He said he received confirmation in October that the department had agreed to extend the contract for another three months up until December 31. Jonkers on October 9 retracted the offer to extend the contract and terminated the contract without disclosing any details of the “so-called new system”.

Van Eeden pointed out that due to a lack of engagement from the side of the department, the provision of software would automatically expire on September 30.

Legal letters stated that they did not agree to the extension of the contract, whereby Mindmatter had no obligation to the department and it would cease to provide services. The company had warned Jonkers that this would result in a collapse of the department’s health information system.

Van Eeden added that they gave notice through their attorneys on October 9 that their patient records would be automatically shut down on October 19.

“It is neither fair nor reasonable to expect the company to retain a full complement of staff on a temporary basis for a period of three months, nor is it commercially feasible to continue operations where the client is more than R30 million in arrears.”

He indicated that on October 19 the department, through lawyer’s letters, had urgently notified him that the agreement had not been unilaterally extended. Van Eeden stated that in terms of a court order, Mindmatter was compelled to provide the department with services, free of charge, without any recourse.

“The company has in good faith provided software and services to the department for years. The department has displayed flagrant disregard for the contractual arrangement ... and had time and time again failed to comply with its contractual duties.”

Various letters of demand were sent to the department, where, according to a lawyer’s letter dated 2014, software was installed at sites throughout the Province without any compensation to Mindmatter.

Their attorney, Andrew Ginsberg, pointed out that the system did not affect the ability of doctors and nurses to treat terminally ill patients in need of emergency medical care.

The letter stated overdue licence fees and the unauthorised installation of software in 2000 amounted to R52 million, while R31.2 million was payable for the installation of workstations, along with an initial once-off installation fee of R50 000 per site and a monthly licence fee of R5 000 per work station.

The legal representative for the Department of Health, Div Pretorious from Haarhoffs Attorneys, pointed out that the software system was crucial for the successful operation of the department’s hospitals and clinics and that the wellbeing of patients could be placed at risk in “life and death” situations.

Jonkers, in court documents, had indicated that a decision was taken “a while back” that a new system should be implemented by the department.

“If the software system being provided by Mindmatter in terms of the existing contract is shut down before a new system is in place, that will have disastrous results regarding the provision of medical services at Kimberley Hospital. The people who will suffer the most are the poorest of the poor who cannot afford private medical services.”

He stated that a verbal agreement was made to extend the contract with Mindmatter, whereby the company was now reneging on the agreement. “It now contends that the extension of the contract was without any force and effect. This is simply not true.”

Jonkers added that the company had made various demands that amounted to “extortion”.

“On October 19 Mindmatter started shutting down its system, meaning that if an interdict is not granted on an urgent basis, the residents of the Northern Cape will suffer irreparable harm.”