Blow to Viapath as Synlab announced preferred bidder for £2.25bn contract

Synlab has been selected as preferred bidder for a 15-year contract to provide pathology services to five major NHS trusts in London.

The German-owned company said it had received confirmation from procurement leads, Guy’s & St Thomas’ NHS Foundation Trust and King’s College Hospital NHS Foundation Trust, that it had been selected preferred strategic partner, but that a formal decision to award the contract would not be made until April.

The news will come as a blow to incumbent provider Viapath. The company, which is a joint venture between Serco, Guy’s and St Thomas’ and King’s College Hospital NHS Foundation Trusts, has operated the contract since 2009 and it accounts for a significant proportion of the company’s earnings.

In 2018, the latest year for which accounts are available, it reported revenue of £122m and a 31% rise in EBITDA to £7.1m, primarily as a result of higher volumes from the contract.

In a report accompanying the accounts, chairman David Bennett said participating in the tender would be a ‘major focus’ for the company during much of 2018 and 2019. Winning it, he added, would be ‘central to Viapath’s future’.

The existing contract is due to end in September, when it will be replaced by the South East London Pathology Procurement. Worth £2.25bn over 15 years with a five-year extension option, it includes provision of pathology services to both lead trusts and South London and Maudsley NHS Foundation Trust, Oxleas NHS Foundation Trust and Royal Brompton and Harefield NHS Foundation Trust, as well as GPs across South East London.

In a statement, Synlab said: ‘The Trusts are preparing a full business case that will require review and approval of the Trusts’ boards. Only at this point, and once certain key criteria have been met, can a contract be awarded.’