MySejahtera Scandal Not Unique, France’s Covid-19 App Under Prosecutor Probe

Like MySejahtera, TousAntiCovid was developed free (pro bono); French financial prosecutors are investigating directly awarded operation contracts for the Covid app, estimated to cost the French govt €3.7mil (RM17mil) with tax, excluding promotion costs.

KUALA LUMPUR, April 8 – The MySejahtera controversy surrounding the Covid-19 app – which was initially developed for the government for free, but has now been directly awarded to a private company – is not unique to Malaysia.

In France, the country’s StopCovid app – which has since been renamed “TousAntiCovid” (Everyone Against Covid) – is the subject of a preliminary investigation by France’s National Financial Prosecutor’s Office (PNF) for the criminal offence of “favouritism”, reported France’s national newspaper Le Monde jointly with newswire AFP in May last year.

The “favouritism” probe by PNF – which specialises in prosecuting corruption, bribery, and offences against public finances, among others – was opened September 2020, after a French anti-corruption organisation filed a complaint in June 2020 for the alleged award of contracts related to the Covid-19 app without open tender. Favouritism is defined under the French Criminal Code as the crime of granting an unfair advantage in public procurement contracts.

Details of the legally grey procurement of Malaysia’s MySejahtera and France’s TousAntiCovid mobile Covid-19 applications are remarkably similar. 

Like MySejahtera that was developed by Entomo Malaysia Sdn Bhd (formerly KPISoft Malaysia Sdn Bhd) for free for the Malaysian government in a one-year corporate social responsibility (CSR) initiative ending March 31, 2021, TousAntiCovid (known as StopCovid then) was developed pro bono without charge for the French government.

TousAntiCovid was created by the StopCovid project team, comprising nine public and private organisations “acting on a pro bono basis”, to provide French health authorities a digital contact tracing tool to help manage the Covid-19 pandemic, according to an April 26, 2020 press release by the StopCovid project team.

France’s StopCovid government project was conducted under State supervision – similar to MySejahtera that was developed under the government’s purview, though specific jurisdiction is unclear with the involvement of several agencies prior to Health Minister Khairy Jamaluddin’s appointment besides the Ministry of Health (MOH), such as the National Security Council (NSC), the National Cyber Security Agency (NACSA), and the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU). 

MySejahtera has been primarily used by Malaysia’ MOH for contact tracing through mandated check-ins at public premises, though it was used later to also host digital Covid-19 vaccination certificates – similar to TousAntiCovid (albeit with a bluetooth function for contract tracing, rather than QR code scans). However, use of the TousAntiCovid app has never been made mandatory in France.

MySejahtera was created by Entomo Malaysia using its proprietary KPISoft software, according an October 6, 2020 MySejahtera licence agreement between Entomo Malaysia and MySJ Sdn Bhd, the company that is currently negotiating with the government over the app. On the other hand, according to the StopCovid project team, TousAntiCovid was developed with an open source licence for the sake of transparency.

French media outlet L’Obs revealed in June 2020 that the maintenance and hosting of TousAntiCovid (or StopCovid) provided by the company Outscale – a subsidiary of French software corporation Dassault Systèmes, one of the StopCovid project team members – were billed for an estimated operating cost of between €200,000 and €300,000 a month.

Then-French Secretary of State for Digital Cédric O reportedly confirmed on June 23, 2020 that the TousAntiCovid app costs the government between €160,000 and €200,000 a month, comprising computer hosting (€40,000), maintenance and development of the app (€40,000 to €80,000), user support (€50,000), and deployment costs (€30,000).

Anti-corruption organisation Anticor said in a March 22, 2021 statement, after filing a complaint with the Court of Justice of the Republic on the alleged direct award, that the pricing for operation and maintenance of TousAntiCovid of up to €200,000 monthly went “well beyond the regulatory thresholds allowing an exemption from the call for tenders procedure.”

Anticor pointed out that calls for open tender are required for government supply and service contracts exceeding €139,000, excluding tax, based on public procurement rules. 

Anticor, citing a StopCovid financial statement, also said the TousAntiCovid contract actually ran higher at €6.5 million (about RM30 million), including tax, with additional new expenditure items — comprising licences (€69,676, including tax/ year), user support (€720,000, including tax/ year), deployment management (€432,000, including tax/ year), hosting (€576,000, including tax/ year), as well as a communication campaign for the app (€2,793,000, including tax/ year). These pricings, said the anti-graft group, exceeded industry practice.

Excluding communication costs, TousAntiCovid reportedly costs €3.7 million (roughly RM17 million) with tax.

In contrast, Entomo Malaysia told the Malaysian government in its MySejahtera public-private partnership proposal in November or December 2020 that it costs about RM138.9 million annually to operate the app, including software as a service (SaaS) that costs RM120 million a year.

MySejahtera is about eight times more expensive to run, based on the app developer’s estimates, than TousAntiCovid (excluding promotion costs and including tax) that serves France’s 67.8-million population, double the size of Malaysia’s 32.4 million population. TousAntiCovid reportedly has about 50 million users, while MySejahtera has 38 million.

Anticor maintained that each of the items of expenditure for TousAntiCovid – whether for communication or operation of the app – should have been called for tender or a competitive procurement procedure.

“The absence of a call for tenders in cases where it is mandatory, is likely to constitute the criminal offence of favouritism. Anticor considers that for public contracts involving such large amounts, competitive bidding was mandatory to guarantee transparency, on the one hand in the awarding of contracts and on the other hand, in the use of public money.”

Here in Malaysia, the government’s direct award of the MySejahtera contract to MySJ is not currently under a criminal or corruption probe, although Parliament’s Public Accounts Committee (PAC) is set to launch on April 14 its investigation on the procurement and development of the Covid-19 app.

The government says it has not yet paid a sen to the MySejahtera app developer, Entomo Malaysia, even after the end of the company’s CSR initiative more than a year ago. In its October 2020 licence agreement, Entomo Malaysia transferred its intellectual property (IP) rights over MySejahtera to MySJ and granted the company a software licence for RM338.6 million in an agreement until end 2025.

At the Dewan Negara last week, Khairy justified the government’s direct negotiations with MySJ, saying that because more modules were needed for the MySejahtera app, MOH decided to continue with the “existing operator” rather than to look for a new one.

According to the PAC’s Covid-19 vaccine procurement report tabled in the Dewan Rakyat last March 24, committee chairman Wong Kah Woh questioned the direct negotiation MySejahtera award to MySJ, noting that Entomo Malaysia – via its initial CSR project for the app – had bypassed government procurement protocols that require open tender for contracts above RM200,000 or RM400,000, unless approved by the finance minister.

Unlike France’s TousAntiCovid controversy, which appears to focus specifically on the alleged breach of public procurement rules, the MySejahtera scandal is far more complex with issues — besides procurement — involving the app’s ownership and data security, due to the lack of a contract between the government and the app developer when MySejahtera was created in a CSR project. 

Even national security concerns have been cited by Opposition Leader Anwar Ibrahim and other Pakatan Harapan MPs, after CodeBlue reported that Entomo Malaysia is fully owned by Singaporean company Entomo Pte Ltd, listed on Companies Commission of Malaysia (SSM) records as “foreign”.

Khairy has yet to disclose what exactly is being negotiated by MOH with MySJ – whether it is to buy over the entire app and its IP or to purchase the MySejahtera SaaS – although he told a press conference last March 28 that the deal under negotiation is “much, much lower” than RM300 million. 

This is the fifth part of CodeBlue’s investigative series on MySejahtera:

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