Regina firm suing Calgary-based company over surgical contract

By Barb Pacholik, Leader-Post October 21, 2011

REGINA — Contending that it’s being cut out of a potential $10 million, a private surgical centre in Regina is suing after a Calgary-based company was awarded a long-term contract under a plan to expand day surgery services.

The suit launched by Omni Surgery Centre Ltd. against the Regina Qu’Appelle Health Region (RQHR) was filed Thursday in Regina Court of Queen’s Bench.

Health regions in Regina and Saskatoon announced in June that they had picked Surgical Centres Inc., which operates clinics in Alberta and B.C., under an initiative to use private companies to reduce surgical wait times. They are to provide such procedures as sinus operations, dental surgeries, and arthroscopic knee and shoulder repairs. At the time, a health region executive had said the Surgical Centre’s clinics could open as early as Oct. 1, but the company has since said January is more likely.

At the time of the announcement, Omni president Rob Mitchelson expressed surprise his company’s bid for the contract was rejected. Omni had been contracted last year to provide similar services in Regina.

“This is a complete disappointment and a complete lack of respect to Saskatchewan business and our surgical centre,” Mitchelson told the Leader-Post at that time.

The lawsuit contends Omni was “unduly prejudiced and unfairly treated in the proposal process, which damaged the integrity of the competition.”

A statement of claim, launching legal action, contains allegations not yet proven in court. A statement of defence has not yet been filed.

In its claim, Omni says it entered into a short-term contract with RQHR in July last year to provide services to reduce surgical wait times under a Ministry of Health initiative. The contract was to end in March this year but was later extended to Aug. 31 and then to Dec. 30.

In January, RQHR had issued a request for proposals, seeking applications to provide non-hospital, insured surgical services, running from Sept. 1 this year to Dec. 31, 2013, with an option to renew for two fiscal years.

Among the terms of the request was a provision stating that applicants must demonstrate, prior to entering the agreement, that they were licensed in Saskatchewan and that all necessary accreditations from the Saskatchewan College of Physicians and Surgeons had been obtained.

In its claim filed by lawyer James Garden, Omni contends Surgical Centres Inc. — “an Alberta corporation which had not previously been registered or in operation in the Province of Saskatchewan” — didn’t meet those requirements.

In addition, it alleges Surgical Centres wasn’t in a position to demonstrate it was financially responsible and able to provide surgical services at a cost equal to or less than what was offered in the publicly-delivered health care system — another of the requirements.

The suit also claims the service agreement eventually entered into with Surgical Centres differed in material aspects from the proposal initially submitted.

Omni maintains it stands to lose in excess of $10 million over the course of the proposed service agreement to December 2015 because of RQHR’s alleged “breach of contract … or breach of its legally enforceable obligation,” according to the claim.

However, the suit doesn’t specify an amount for damages and costs being sought if the suit is successful.

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