Alberta Health Services says the choice to award an Australian company the contract to run lab services in central and northern Alberta was based on cost, quality and the desire to send fewer tests for processing outside the province.

“We do send a number of tests outside of Alberta and we’d like to get those tests being done back in Alberta,” AHS CEO and president Vickie Kaminiski said on Friday. 

For example, Kaminski said genetic testing currently needs to be sent out of the province. She said AHS also wants to do new types of testing that aren’t being offered. 

The news of the contract was announced through a news release sent by the Australia's Sonic Healthcare last night. The $3 billion contract is expected to last 15 years.

Sonic was selected by AHS to provide services that will replace hospital labs operated by AHS and Covenant Health, and private labs operated by DynaLife.

Kaminiski said a number of proponents submitted bids. Sonic was picked as a “preferred provider” after being evaluated by 108 people, including front-line staff.

Contract negotiations between AHS and Sonic will now start, a process expected to take about four months. 

DynaLife Chief Executive Officer Jason Pincock said in a news release he was disappointed with the government's decision. 

"We have had a long-standing, positive relationship with the people we serve and we are very proud of our track record in delivering high quality lab services to Albertans," Pincock said. 

About 2,000 people work for labs in the Edmonton area, with the majority represented by the Health Sciences Association of Alberta.

Kaminski said ways to incorporate existing lab staff will be part of negotiations with Sonic.

The contract with DynaLife is set to expire in 2016. Kaminiski said proponents who weren’t successful have a period of time to appeal the AHS decision.

Pincock said the company needs more information. 

"AHS's decision raises many questions," he said. "It is important to fully understand the decision and its implications to our company and to our patients as DynaLife considers all its options."