Is NPfIT "in crisis" because CSC misses deadline at Morecambe Bay?

      – The Department of Health says it is “disappointed” that it has been unable to sign a  memorandum of understanding with CSC. It’s because CSC has not gone live by 31 March 2010 with Lorenzo 1.9 at Morecambe Bay University Hospitals NHS Trust. The deadline of 31 March 2010 was set by NHS CIO Christine Connelly last year.

     –  CSC faces losing about £1bn of its £3bn worth of NPfIT local service provider contracts. The FT reports today that CSC faces dismissal from the part of its LSP contracts that require it to deliver systems to acute trusts.  The NHS CIO Christine Connelly has told CSC that, in relation to a successful go-live at Morecambe Bay, “we cannot wait forever”.
   
      – The Department of Health is withholding tens of millions of pounds from CSC because the money was predicated on the successful go-live of iSoft’s Lorenzo system by 31 March 2010 at Morecambe Bay. The Department had been willing to push back the go-live of Lorenzo at Morecambe Bay date to April – but it has become clear that any April deadline wouldn’t be met either.

      – The Department said last night it was expecting CSC to provide a plan on when it expects to go live at Morecambe Bay. “When we have evaluated it we will confirm a [new] date,” said the Department. 

     – Morecambe Bay is enthusiastic about installing Lorenzo. But its board isn’t willing to go live before directors have had adequate reassurance from senior clinicians that a go-live will not cause significant disruption. This slow and cautious approach may yet change as the political pressure builds on Morecambe Bay’s board to go live.

But it’s unlikely a go live will happen at Morecambe Bay before the general election. This blog reported on 23 March that the go-live at Morecambe Bay could be delayed by weeks, then months. If the delays become too protracted nobody will be surprised if CSC loses its status as the main IT supplier in three fifths of England. Trusts in the north of England, and in the Midlands, may then get the right to buy a choice of systems under the Department’s ASCC framework.

Officials in Whitehall told me last night that the ASCC procurement – for the south for the time being – demonstrates that there are working alternatives [to CSC’s exclusive offerings].

In April last year Christine Connelly said: “We will be working closely with the NHS and our current suppliers to improve the pace of delivery. If we don’t see significant progress by the end of November 2009, then we will move to a new plan for delivering informatics to healthcare.”

       – The Department says that although it is disappointed not to sign an MoU with CSC, it is “expecting our current review with CSC of delivery plans to achieve significant savings, while building on the gains already made for patients, clinicians and managers”.


                –  The Department has signed a memorandum of understanding withBT, the NPfIT local service provider in London and parts of the south ofEngland. The Department says the MoU offers a “new flexible framework”ofsystems to NHS Trusts.  “It provides NHS trusts with the flexibilitythey want formanaging their information priorities based on advice from clinicians,”says NHS Connecting for Health.

The deal saves the Department of Health £112m, or about 12% of the contract value – but means that BT need only deliver Cerner Millennium Care Records Service systems to about half the trusts in London.
 
The “new flexible framework” – details of which are not given – is not yet available toNHS trusts in CSC’s areas until CSC signs an MoU – which requires asuccessful go-live at Morecambe Bay.

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Departmentof Health statement:

“We made clear lastyear that it is important to improve the certainty of delivery of NHS ITin the acute sector while ensuring that any innovation matches thechanging needs of the local NHS. We want Trusts to be able to choose howNational Programme for IT products can work with local systems thatremain fit for purpose.

“This new flexible framework is the basis of our Memorandum ofUnderstanding with BT and will be the basis for an MOU we expect to signwith CSC once University Hospitals of Morecambe Bay NHS Trust goes livewith Lorenzo.

“While we are disappointed that we have not beenable to agree both MOUs, we are expecting our current review with CSC ofdelivery plans to achieve significant savings, while building on thegains already made for patients, clinicians and managers.”

The Guardian reports that the NPfIT is in crisis.

“Thegovernment’s struggling £12.7bn IT programme was in crisis tonightafter the department of health admitted it had failed to secure revisedterms on three troublesome contracts, each worth £1bn.

“Renegotiationtalks on the three contracts with US outsourcing groupComputer Sciences Corporation reached impasse after CSC failed tosuccessfully install its first Lorenzo patient administration system -managing patient bookings and referrals – at an acute hospital trust bytoday’s deadline.

“The missed deadline is expected to causeproblems for CSC, which has its financial year-end on Friday, and forAustralian software supplier iSoft, both of which have repeatedlyassured investors they were on track to meet the deadline – and toreceive cash payments as a consequence…

“Failure to securepayments from the Morecambe Bay project means CSC isnow likely to consider its position within the National Programme afterseven years’ work and hundreds of millions of pounds of expenditure. Itcould follow fellow contractor Fujitsu, which quit a similar £1bncontract to install systems across the south of England and the WestCountry three years ago. Since then the Japanese IT consultancy has beenlocked in legal battles with the department of health, claiming it isowed £700m…

“The Morecambe Bay deadline is believed to becritical to earningstargets at CSC, an $11bn group listed on the New York stock exchange. InFebrurary CSC told analysts this milestone was “probably the singleevent, if you can say that, in the [fourth] quarter” and that it would”bring with it revenue recognition”.

“Two weeks ago iSoftissued astatement to the Australian stock exchange saying it “expects thisachievement [meeting the Morecambe Bay deployment deadline] to trigger acash payment to the company”

Comment:

The NPfIT could besaid to be in a perpetual state of crisis. The failure of CSC to golive at Morecambe Bay is, in a sense, a success in that it shows thatthe trust is unwilling to surrender to political pressure to go livebefore it is ready.

That’s a triumph for those in the NHS whowant Morecambe Bay and other trusts to learn the lessons from failedgo-lives at Bartsand The London, the RoyalFree at Hampstead, MiltonKeynes, Westonand Nuffield.

Links:

CSC faces dismissal from part of its NPfIT contracts – IT Projects Blog

NHScomputer upgrade in crisis as supplier CSC misses critical deadline– The Guardian

iSoftsays it is “on track” at Morecambe Bay – E-Health Insider

Isthe NPfIT close to imploding? – IT Projects Blog

Congratulationsto Morecambe Bay – IT Projects Blog

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