2 November 2006<%=replace((Recordset1.Fields.Item("NewsStory").Value),VbCrLf,"
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Auckland District Health Board
Regional Health Boards of Auckland seek urgent discussions with DML to mitigate risk

The Regional Health Boards of Auckland (ARDHBs) say DML's actions are not only putting its own staff at risk but raise serious doubts about the company's ability to deliver on the community laboratory contract up until 30 June 2007. The ARDHBs have written to DML seeking urgent discussions to mitigate this risk.

The three Auckland regional DHBs (Auckland District Health, Counties-Manukau District Health Board and Waitemata District Health Board) have awarded the community laboratory contract to Labtests Auckland Ltd.

Lead CEO for the ARDHB Community Laboratory Project, Garry Smith, says DML continues to resist working with the DHBs on transition planning.

In addition, less than three weeks before a scheduled High Court hearing (20 November), DML has again gone to the High Court with an amended Statement of Claim which has resulted in a new hearing date of 12 February 2007. DML is challenging the community laboratory contract decision process in the courts through a judicial review.

"No matter what the outcome of the court case, the sensible and ethical thing for DML to do would be to participate in the ongoing transition planning process to ensure that their own staff can be given certainty of future employment and the public of Auckland are not adversely affected by either legal action or DML's commercial strategies.

"Transition planning helps ensure that a smooth handover can be effected and by not participating DML is putting at serious risk its own ability to deliver on the contract.

Mr Smith says the delay in the court action also puts DML staff into limbo.

"DML staff who may have been waiting for the outcome of the court case may well feel a heightened level of insecurity and that's really unfortunate," he says.

Garry Smith says the ARDHBs are confident in the decision process which was signed off by Audit New Zealand.

"DML filing an amended statement of claim with the court less than three weeks out from the original hearing date of 20 November will not distract us from our focus on providing an ongoing service for Aucklanders and planning for the new contract which takes effect on 1 July 2007, " says Mr Smith.

Mr Smith says Labtests Auckland is performing well against its implementation plan to date and is ahead in many areas. The company has leased premises for its laboratory in Mt Wellington and expects it to be operational in May 2007, well ahead of the commencement of the contract on 1 July 2007. Contracts for the main laboratory equipment and IT system have been let. Labtests also reports that it is receiving a steady flow of enquiries about job opportunities, including a number from overseas.

Ends.

Background:
DML is wholly owned by Australian company Sonic, while the new provider, Labtests Auckland Ltd, has Australia's Healthscope as its majority shareholder but includes local ownership. Both Sonic and Healthscope are listed on the Australian Stock Exchange and are competitors in Australia.

The contract is about spending tax payers' money wisely, and for this particular contract, also ensuring that the Auckland region will continue to receive quality, timely laboratory services.

Because a company has held a contract for a number of years doesn't mean it should simply keep being re-appointed without the process being contestable. A tender process makes sure that a service with key deliverables is being provided at the right price. In addition, not tendering for such a large commercial contract would be a breach of the Audit Office guidelines.

The quality and service requirements was the same for either a new or the existing provider.

The new contract will deliver back into healthcare $120million in savings against current spend over the life of the eight year contract.. 

Ends

Fleur King
External Communications Manager
Auckland District Health Board

Phone: 09 630 9952
Fax: 09 630 9789
Mobile: 021 804 122