Strategic Tender - Medical Services

Ashwath Sekar
Senior Consultant
Heavy Industry
Cost Reduction
February 5, 2024
cost reduction
IT fund established
admin fees

Client Problem

The client was a national production drilling company and had a contract in place for the provision of medical services for pre-employment medicals and on-going injury management services. The client had a strong relationship with the incumbent and the contract had not been competitively tendered in many years.

Caliba Solution

Caliba was engaged to review the medical services contract which included a review of their medical services requirements, current contract, spend data analysis, and a specifications review. Numerous client stakeholder sessions were held to validate the client’s requirements, current performance of the incumbent and identified cost reductions opportunities.

Key stakeholders in the business had a long-standing relationship with the incumbent who had been the medical service provider for the past 5-years. The long-standing relationship with the incumbent increased the resistance to change to a new service provider, with the business advising to negotiate with the incumbent instead of going to market.

Caliba recommended to release a tender for the services to test the incumbent’s level of service and rates. The tender resulted in a change of provider resulting in a cost reduction of 29% and an improved level of services and IT platform. Caliba also assisted the client with the establishment of a contract management guide to ensure the contract was managed effectively.

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