Alberta government cancels $3 billion lab contract

Sarah HoffmanEDMONTON – Alberta’s NDP government has ordered Alberta Health Services to cancel the award of a $3 billion laboratory services contract to a private-sector firm from Alberta. The contract had been given last year under the previous government to Australian based Sonic Healthcare for the provision of a “super-lab” in the capital region.

Health Minister Sarah Hoffman (pictured) announced that her government will not go ahead with a proposed plan to expand private laboratory services and build a ‘mega-lab’ in Edmonton. “We’re not moving forward with any project,” Hoffman said.

AHS president and CEO Vickie Kaminski said the appeal panel found her organization had “breached its duty of fairness” in the request for proposal process in a “substantive” manner.

However, Kaminiski read a section of the decision which said AHS conducted the process with integrity, despite these problems.

“So while there was a breach of fairness, it wasn’t intentional,” she said. “They weren’t sure how deep the breach actually went and said they just could not find documentation of us mitigating against it.”

The government now plans to review how to deliver lab services in Alberta before making any decisions.

The Health Sciences Association of Alberta represents 1,100 DynaLife lab workers and another 500 who work in the public system. President Elisabeth Ballermann said she was pleased with Hoffman’s decision. She said her members have long wanted lab services delivered by the public system.

“I’m convinced that we can do high quality, world-class work in the public sector,” she said.

Ballermann was also concerned that under the contract, the new facility to house the Edmonton lab would be owned by a private company, not by Albertans. “We have long held the view that this is a critical piece of public infrastructure that we should, as Albertans, own and operate,” she said.

AHS will incur at least $30,000 in costs for the cancellation – $10,000 per proponent. The health authority will face additional costs contained in the letter of intent with Sonic. Kaminski wasn’t able to say what they were.

Hoffman said she did not see enough evidence that adding more private services would improve Albertans’ health. “I’m of the opinion that this would have been an experiment. And I’m not prepared to experiment with people’s health and well-being.”

Kaminski said the current lab is getting too small to deal with increased demand. She said the government will have to have a definitive plan in the next year of two.

Written by Editor

1 Comment responses

  1. Avatar
    August 21, 2015

    FINALLY someone understanding due diligence and fairness when awarding contracts. Wish someone would evaluate the contractor process in Education, it is a mess; not fair and wastes our time as they continuously repost similar positions or the same position. I have experience in the contracting process in government and would love the opportunity to complete a process review and streamline their services contracts.


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