The NHS is facing a potential conflict with its biggest IT
supplier, after services firm Accenture last week announced a £260m
write-off on its £2bn, 10-year contracts to modernise the health
service.Coming on top of delays in the deployment of systems and
end-user frustration with the NHS national programme for IT
(NPfIT), this could prove a costly diversion for senior officials
of Connecting for Health as it tries to deliver systems to
hospitals.
Accenture, the prime contractor for the NPfIT in two of the five
NHS regions in England, predicted substantial losses on NHS work
for the next three years. It said, "Resolving this situation to
meet the interests of all parties in a timely fashion is a top
priority."
Accenture chief executive William Green said, "We have
established the guiding principles for success in our ongoing work
with the NHS and have devoted additional management resources at
the highest level to resolve the NHS matter as quickly as
possible."
But Richard Granger, director general of NHS IT, said other
prime contractors, BT, CSC and Fujitsu, have not reported similar
problems.
The contracts, which were struck in 2003, were structured so
that payment was made on the delivery of working systems.
"Under our published procurement strategy we invited prospective
suppliers to take completion risk and, where they chose to do so,
this was reflected in the price. We continue to look to our prime
contractors to fulfil their obligations to manage their delivery
obligations," said Connecting for Health.
Accenture said some of its future losses on the deal were down
to rescheduling of the NPfIT and delayed delivery of software from
sub-contractors. Other losses were down to changes within the NHS,
particularly the introduction of GP system choice, which was not
accounted for when Accenture signed the contracts.
In February, Gillian Braunold, GP clinical lead for Connecting
for Health, told Computer Weekly the organisation had been
discussing arrangements with its service providers for months to
deliver GP system choice.
Tola Sargeant, senior analyst at research firm Ovum, said, "When
Accenture signed the contract it worked out how much it could
expect from supplying GP systems. Now that is not the case."
Robert Morgan, director of outsourcing consultancy Morgan
Chambers, said that if Connecting for Health were to refuse to
negotiate with Accenture on the issue, the NHS could technically be
in breach of contract.
"Suppliers may argue that they costed everything on the
expectation of what the revenue would be. Now this is reduced, that
may be effectively a breach of contract. In private, lawyers from
both sides will be discussing this."
A spokesman for Connecting for Health said, "There is currently
no renegotiation going on with Accenture regarding their contracts
with the NHS."
However, Connecting for Health also said, "Once the details of
GP Systems of Choice have been concluded, a change request will be
raised on the local service providers' contracts to accommodate its
impact."
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