09 August 2006<%=replace((Recordset1.Fields.Item("NewsStory").Value),VbCrLf,"
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<% NewsURL = Recordset1.Fields.Item("URL").Value if NewsURL <> "" OR NewsURL <> "http://www.adhb.govt.nz" Then response.write "Click here for more information. ("&NewsURL&")" end if %>Auckland District Health Board
Court action after failed bid to win contract

The three regional DHBs in Auckland say they are disappointed that DML has chosen to take court action rather than accept a decision that they did not win the community laboratory tender for the region.

Spokesperson for the Waitemata, Auckland and Counties-Manukau District Health Boards, Garry Smith (CEO ADHB) says the decision to award the community laboratory contract to Labtests Auckland Ltd was not made lightly.

"The tender process was audited from start to finish by a representative from Audit New Zealand who issued a certificate of compliance which upholds the process and probity."

"DML's contract was coming to an end. There was a tender process which is only right and proper for large commercial contracts and DML did not measure up against Labtests Auckland in a very thorough tender process."

"DML is a commercial company that is now trying to resuscitate a contract it failed to win.  The millions of dollars we can save with the new provider can be applied to other areas of health," he says.

"The $120million savings over the life of the new $560million eight year contract is the equivalent of 90 hip operations, every month, every year for the eight years of the contract, or 470 additional heart bypass operations every year."

"The DHBs will make the decision as to where the millions of dollars in savings will be used."

Mr Smith says he's not surprised at the number of Aucklanders who have signed the petition given the level of misinformation that has been circulating.

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Backgrounder - Misleading Information Circulated to the Public:

• Patients may not receive the same level of service. The tender contained the same level of service specifications for all tenderers. The tenderers had to satisfy the DHBs that they would deliver on those service specifications before price was even considered.

• Tests may be sent out of the country on an ongoing basis. All tests will be done locally.

• Patients have been told that there may be delays in processing laboratory tests. Labtests have committed to a timely turn-around, including urgent tests completed within hours, and to binding KPIs on their service.

• Patient history will be lost. Patient information is not owned by a provider but held on behalf of the patient. Legally it must be made available to other health providers.

• A new company will not be able to set up a new service by 1 July next year. The majority shareholder of Labtests Auckland, Healthscope, is committing multi-millions and significant human resources to ensure continuity of service. Healthscope is the third largest provider of pathology services in Australia and has been operating for more than 20 years. It is experienced in setting up "green field" laboratories at a distance. Sonic (100% owner of DML) is also an Australian company.

• There was a lack of consultation. Clearly no public body can determine the outcome of a commercial tender via a vote from stakeholders. What is required is prior consultation on both the strategy and the tender criteria and a robust, transparent process.
  
  Throughout 2005 all laboratories in Auckland were involved in a regional laboratory services project. This culminated in late 2005 with ARDHBs informing other stakeholders, including PHOs and the various Royal Colleges, of the ARDHBs intent to tender the community laboratory contract via a Discussion Paper on the central themes for the Request for Proposal.
  
  Feedback from the consultation process was incorporated into the RFP. The finalised RFP documentation was issued on 8 February 2006 to the 11 parties who registered their interest as potential providers. The full RFP documentation, selection criteria, the Discussion Paper and a draft contract were made available on the web. In addition, public notices were placed in newspapers.
  
  As is customary for large commercial tenders, the actual tender process was conducted on a confidential basis with the respondents. The final decision made by the Boards of the three DHBs was based strictly on the published criteria and in strict conformity with the stated process.

• Collection Centres will close. While this is actually accurate, it would have occurred whether DML or Labtests Auckland was selected as the provider. Auckland is currently over-serviced with collection centres compared to national and international benchmarks.

• As a member of the ADHB Board, Dr Tony Bierre had an advantage in the tender process. Dr Bierre went beyond the statutory requirements in standing down from all board business six months prior to the community laboratory RFP and was not privy to any information or participated in any discussion or decisions regarding the tender.

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