AHS awards private lab testing contract after months of lobbying by UCP donors

Yesterday, Alberta Health Services announced that they had chosen their “preferred proponent” to provide community laboratory services in Alberta.

Last December, AHS had issued a request for proposals for the lab services. Over 30% of community lab services were already being provided by private companies. This RFP would transfer the remaining publicly-funded services to the private sector.

It’s not clear how many firms submitted proposals, but AHS ultimately selected DynaLIFE, an Edmonton-based private company that had already been providing community lab services in the capital region, as well as in parts of northern and central Alberta, since April 2021.

DynaLIFE’s previous contract was for just 3 years, but the AHS board agreed to extend it to 2016, then again to 2017. According to the Edmonton Sun, however, the company has been providing clinical services for the province since 1995.

Their current contract was supposed to end next year, at which time their services would be taken over by Alberta Public Labs, a publicly-run service that was cancelled shortly after the UCP formed government.

Coincidentally, their new contract is supposed to take effect next year.

Not only were they already contracted by the government, but DynaLIFE may have been working on this outcome for several years.

According to the Alberta Lobbyist Registry, Nathan Mison of Mison Consulting in Edmonton submitted an initial return on 8 January 2017 to register as a lobbyist. Listed on the return as client was DynaLIFE, who had contracted with Mison in June 2015 for a 2.5-year agreement.

The initial return stated that during the 12 months prior to the date of the return, DynaLIFE had received at least $140 million in funding from Alberta Health.

Mison planned to meet with Alberta Health representatives, as well as communicate over email, phone calls, and written correspondence, for 3 purposes:

• Advocate on DynaLIFE’s behalf to “maintain the working relationship and completion of the 5-year agreement”.
• Create new opportunities for DynaLIFE, Alberta Health, and Alberta Health Services to “work together on new opportunities and partnerships.”
• Work with ministers and bureaucracy to inform them of who DynaLIFE are, the projects that they are undertaking, and their plans for growth.

Just 10 days later, Jason Pincock, DynaLIFE’s CEO, filed a semi-annual return to the registry. According to his return, DynaLIFE is a subsidiary of OMERS, a Toronto-based investment firm, through Borealis Infrastructure, another subsidiary.

Pincock’s return stated that the company had received $160 million from the provincial government in the previous 12 months.

As well, Pincock had this to say as the reason for meeting with Alberta Health, in his return:

Dynalife is currently providing the services on behalf of AHS. AHS is exploring the long term delivery of these services over the next decade and is engaging Dynalife as the incumbent provider and as a stakeholder in the proposed changes. This decision includes the option of acquiring Dynalife and integrating it into AHS operations or continuing a contractual model structure.

So that’s kind of interesting.

The NDP were at least considering buying out Pincock’s company, likely as part of rolling out Alberta Public Labs. According to a UCP news release in 2019, that would have cost $50 million.

Pincock next semi-annual return—in August—pretty much said the same thing.

The following December, Mison updated his registration to indicate that his contract with DynaLIFE had been terminated.

The next 4 semi-annual renewals pretty much all said the same thing. And in the renewals filed in the beginning of 2018 and the beginning of 2019, Pincock indicated both times that the company had received $160 million in government funding.

In June of 2019, the newly elected UCP government announced they were cancelling the Alberta Public Labs project. Four months later, the registry gets another initial return, but this time from Canadian Strategy Group, which DynaLIFE had hired to lobby on their behalf.

Listed on the initial return were 3 people:

• Hal Danchilla, partner
• Melissa Caouette, western practice lead

Hal Danchilla was a co-founder of CSG. He has over 6,000 filings (including notices of change) in the Alberta Lobbyist Registry, involving a wide range of clients he’s lobbied on behalf of. And that’s going back to only 2016.

Danchilla also has an extensive political donation history. Since 2004, he’s donated nearly $66,000 to the UCP and PC parties, including to election campaigns for Fred Horne. Interestingly, he donated nearly $1,000 to the NDP between 2015 and 2016, while they were in power.

He was also involved with the creation of the Alberta Can’t Wait political action committee, designed to unite the right in Alberta and ultimately create the UCP.

Melissa Caouette had served as special assistant to Jim Prentice, while he was premier of Alberta.

DynaLIFE’s contract was until the end of 2019, and according to this initial return, Danchilla and Caouette intended to “discuss Alberta Health proposed options and alternatives for laboratory service delivery, as it relates to structure, governance, performance, and ownership.”

At the end of 2019, CSG filed an update, which indicated that their contract with DynaLIFE had been extended to December 2020.

Even though he had hired CSG, Pincock kept filing semi-annual renewals, but never updated the reasons box, still talking about lobbying to engaging with AHS “as the incumbent provider and
as a stakeholder in the proposed changes”.

In August 2020, 4 months before AHS issued the abovementioned RFP, CSG filed a notice of change, this time adding 2 more people to their lobbyist list:

• Gail Kelly, senior consultant
• Michael Lohner, partner

Prior to joining CSG in 2013, Gail Kelly was director of field operations for the Alberta PC party for over 6 years.

In 2018, she donated nearly $600 to the United Conservative Party, including to 3 constituency associations: Edmonton–Glenora, Edmonton–Riverview, and St. Albert. She also donated over $1,000 to the Wildrose Party between 2012 and 2014, including to the Strathmore–Brooks constituency association.

Michael Lohner co-founded CSG in 2008 with Danchilla. Prior to that, he served as executive assistant to the minister between 1998 and 2001, under the environment, agriculture, and infrastructure portfolios.

In the 22 years since starting CSG (up to 2020), Lohner had donated nearly $33,000 to either the UCP or its predecessor, the PCs, including to well-known politicians such as Fred Horne, who at one point served as minister of health.

Also in that August 2020 notice of change, Caouette’s position was changed to vice president of business development and government
relations.

Three months later—and a month before the RFP—CSG updated their lobbyist list, removing Kelly and adding Holly Driscoll, another senior consultant.

Later that month, CSG sent another notice of change, which added Colleen Potter to the lobbyist list.

Prior to joining CSG, Potter had been a community and government relations consultant. She was the director of community relations for the Calgary-Centre federal constituency briefly in 2015, leading up to the federal election, as well as a constituency assistant for the Calgary–Foothills constituency between 2002 and 2004.

Less than 2 weeks after the RFP was published, CSG submitted another notice of change, this time removing Driscoll from the list of lobbyists. As well, their contract with DynaLIFE was extended until the end of 2021.

GSG was the same lobbying firm that K-Bro Linen Systems hired just before being awarded the contract to provide all the laundry services for Alberta Health Services.

Pincock filed one more semi-annual renewal, in February 2021, with no changes from previous renewals.

With DynaLIFE getting $160 million a year under their current project for just Edmonton and a few parts of northern Alberta, it’ll be interesting to see how much they’ll be getting for the entire province.

If they’re already getting $160 million a year for only about a third of the market, then they potentially could be getting 3 times that much for the entire market. That comes to $480 million, or nearly half a billion dollars.

According to yesterday’s media release from AHS, a third-party led the RFP process, which included a panel of medical/scientific experts, laboratory operations professionals, and financial analysts, who evaluated the accepted proposals.

And while the RFP process itself may have been facilitated by a third party, it’s hard to say what influence, if any, that CSG had on the process leading up to the selection of the third-party sourcing facilitator.

Oh, speaking of DynaLIFE and RFP’s, did you know that when AHS awarded a 15-year contract to an Australian provider in 2014, DynaLIFE, one of the companies that submitted an approval, actually filed an appeal on that decision?

They claimed the selection process was rigged.