CombineNet Caught Up in UK Corruption Probe

Earlier this morning, The Sunday Times (London Times) published a story that that suggests a CombineNet joint-venture was actively involved in a bribery scandal that has already resulted in arrests on the "suspicion of conspiracy to commit fraud and misconduct in a public office" of three UK men. According to the article, the suspects have been arrested "following a complaint against Americium Developments, an Edinburgh-based IT firm. London's Imperial College Healthcare NHS Trust hired Americium to organise a tender for a new internet-based system that would cut its procurement costs. However, the trust, formerly Hammersmith Hospital NHS Trust, terminated the relationship following allegations that Americium was also receiving money from CombineMed, a US health firm trying to sell it such a procurement system."

What was CombineMed's -- and potentially by extension, CombineNet's involvement -- involvement?

"It is alleged Americium helped CombineMed write the tender specification to increase its chances of success and that Americium was represented on the vetting committee for awarding the contract," according to the story. Apparently, a number of CombineMed employees raised concerns about "the legality of the arrangements in a memo to their employers in October 2007. It claimed Americium was being paid a retainer by UPMC of up to $50,000 (£34,200) a month to promote CombineMed and could earn up to $2m if it was successful." But CombineMed did their own investigation and concluded "the whistleblowers' concerns 'lacked merit'." At least some of the employees involved -- who also had active ties with CombineNet -- who raised concerns were subsequently dismissed from CombineMed.

Did CombineNet play an active role in the corruption scandal? According to at least one source I have spoken with, CombineNet CEO Tony Bonidy was "fully aware of the situation" and "encouraged the CombineMed team to move forward" with the contract arrangements with CombineMed, Americium and NHS. If it turns out to be true that "UPMC and Americium orchestrated CombineMed's ability to dominate all aspects of what was supposed to be an unquestionably fair, closely regulated selection process," as some close to the situation that I have interviewed suggest, I suspect that CombineNet, a Pittsburgh-based sourcing provider with ties to UPMC through its CombineMed joint venture, has the potential to increasingly get wrapped up in the overall scandal as well. I will continue to follow this story as it develops today.

Jason Busch

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