labtest

Negotiation of Auckland Laboratories contracts

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Summary

Lead negotiator and commercial adviser for the Northern DHBs in the renegotiation of a $1bn contract over 10 years for the complex Diagnostic Medlab and Labtests contracts. Also led the implementation team. Subsequent to this, Cranleigh carried out a strategic review of laboratories and in 2012/2013 finalised the negotiations with the vendors.

Background to the Role

The DHBs in Auckland had decided to move from two private laboratory providers to one. This seven-year $700m contract was keenly contested by the two incumbent laboratories.

The Business Need

The contract was awarded to a new entrant. The new entrant unfortunately failed on some significant aspects of the contract. Cranleigh was brought in to rebuild service delivery and renegotiate the contracts.

The Cranleigh Solution

In conjunction with the DHBs, Cranleigh negotiated a new set of contracts with both the new and old providers. Services were restored at appropriate quality levels and with long term cost savings.

Cranleigh then developed a long term strategic plan and subsequently renegotiated new contracts with those providers. The outcome of these efforts was a single provider for laboratory services that enabled the DHBs to achieve significant efficiencies.