Jul 12, 2004 1:19 PM, from staff and wire reports

Novation, the supply company of VHA Inc and the University HealthSystem Consortium (UHC), has expanded its food portfolio and signed a new foodservice distribution agreement with US Foodservice, a subsidiary of Royal Ahold. This agreement provides an estimated annual savings of $12 million for VHA and UHC members. It does not include added fuel charges, saving members about $1 million.

The expanded portfolio doubles the number of contracts Novation offers healthcare organizations. Product agreements cover frozen goods, refrigerated goods, disposables, and dry goods. These agreements are expected to generate an annual average of $293 million in sales for the suppliers. The distribution agreement is expected to generate more than $533 million in annual purchases through the distributor.