'A failure of due diligence': Alberta premier says Dynalife lab deal should have raised flags
Story by Lisa Johnson •1d
Alberta Premier Danielle Smith speaks at a news conference in McDougall Centre in Calgary on Aug. 14, 2023.© Provided by Edmonton Journal
Alberta Premier Danielle Smith says while she wasn’t responsible for a 25-year UCP deal to deliver medical lab services cut short after just over a year, it should have raised red flags from the start.
Appearing on her Saturday radio call-in show for the first time since the government announced it will take over lab services from Dynalife, Smith was asked if the province had failed to properly vet the agreement to expand the private lab testing company’s contracted services into Calgary and the southern region.
“There was a failure of due diligence somewhere and we have to figure out what went wrong in the contracting process,” said Smith.
Dynalife had already been providing lab services in northern and central Alberta, including Edmonton. Health Minister Adriana LaGrange announced Friday all Dynalife’s equipment, staff and facilities in the province will be nationalized and transferred to Alberta Precision Laboratories (APL), which is part of Alberta Health Services (AHS), by the end of this year.
“We had every reason to believe that Dynalife would be able to expand their services because they were already performing very well,” said Smith.
Public health care advocates have long argued private delivery can hurt public services, but Smith said the lesson to be learned is that having “a single source of any contract in government” is problematic, and that having only a single bid from Dynalife to do the work was an early warning sign.
“If you only have one bidder, that could be a sign that there’s something not quite economic about it,” she said.
“I didn’t make the decision,” she said, reiterating that the government was forced to take action Friday. It came after months of long wait times for things like blood tests, and a scramble by APL to cover new appointments.
“Dynalife has made the determination that they want to exit this market, and so we came to a mutual agreement that APL will take that over … for now,” said Smith.
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How much the contract reversal will cost taxpayers has yet to be disclosed.
A July 29, 2022, document available on the government’s public procurement website gives notice to all contracted providers that AHS and APL had entered into a 25-year agreement with Dynalife, beginning a transition on Dec. 5, 2022, but it does not disclose financial details.
Last year, the UCP promised the deal would save taxpayers between $18 million and $36 million.
“Why did (Dynalife) think they could make it work and be able to save money and then when it turned out, when they were actually operating it, those savings just disappeared?” asked Smith, who admitted sunk capital costs will come back to haunt taxpayers.
“We have to buy back some of the assets that we ended up transferring over to Dynalife. That’s going to cost money, and they’ve done some investments in capital and machinery. That’s going to cost money,” said Smith.
The move to expand private delivery is something the Opposition NDP has called a “reckless experiment in privatization” that illustrates the UCP’s incompetence on the health file.
On Friday, David Shepherd, the NDP’s health critic for primary and rural care, reiterated in a social media thread calls for a full accounting of the impact of the deal.
“We need answers,” he wrote.
“We’re already in the process of looking at AHS and seeing how problematic it’s been to concentrate everything into a single health super board and we’re working on decentralization,” said Smith.
lijohnson@postmedia.com
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