Royal Berkshire NHS Foundation Trust has outsourced its entire IT function after admitting its decision to leave the National Programme for IT (NPfIT) had backfired because it couldn't handle the workload.
The trust has agreed a £45m, 10-year outsourcing deal with CSC, the supplier facing possible contract termination over its failure to supply electronic patient records systems under the National Programme.
The signing also coincided with the completion by Department of Health (DoH) and CSC of a Memorandum of Understanding that drew a line under NPfIT failures, but preserved a supply of central programme funds under revised terms. The agreement proposed giving individual trusts power to decide how they spent money allocated to CSC under NPfIT. This accorded with revised DoH strategy for health IT, according to CSC's statement of second quarter finances on 9 November.
Royal Berkshire was simultaneously struggling to implement Cerner Millennium, the electronic patient records system it elected to procure itself after controversially leaving NPfIT in 2008. The project missed its "go-live" in the summer and again this month, the latest in a long-line of setbacks.
The outsourcing contract makes CSC responsible for running Cerner, a competing product to the one it acquired with the purchase of iSoft in September and which it has failed to supply to contract for NPfIT regions in the north and east of England.
Royal Berkshire (RB) has also asked CSC to decommission software applications, of which the trust operates about 200, and replace them where possible with functions in Cerner Millennium. Software applications will otherwise be delivered as cloud services through one of two RB data centres now operated by CSC.
The move follows a joint pledge in September by the Department of Health and technology trade association Intellect to increase opportunities for small software suppliers who had been squeezed out by large companies - specifically BT and CSC - contracted under the National Programme for IT.
CSC refused to discuss the deal. A spokeswoman said: "This contract has not been publicly announced yet".
Elizabeth White, head of health informatics at RB, said: "This is a full IT service contract. [CSC] looks after all the desktops, the network, databases and a large number of systems. They have a data centre. This covers everything. The trust decides policy and the way forward. But we work in partnership with CSC."
RB may be one of the first hospitals in the UK to outsource its entire IT function. "I know that several trusts are considering it," said White.
The trust was committed to Millennium, she said. But its go live date would not now be until March 2012. CSC will support Millennium and is in talks with Cerner. The trust had however retained responsibility for the implementation.
The contract value was omitted when the award was recorded officially on 15 January. Records show the trust pleaded special circumstances to rush the procurement through without a full competition and awarded the contract on 17 December, a month after it issued an invitation to tender.
But trust board minutes recorded how after it awarded the contract detailed financial "implications" of the outsourcing proposal were unsettled. It failed to meet its own procurement schedule to sign a contract by 31 March. The board finally approved contract signing on 31 May, six months after completing its accelerated procurement procedure, and one week after Parliament's Public Accounts Committee heard evidence from CSC over NPfIT's failures.
On 26 July, the RB board approved a payment of £4.08m to CSC. On 28 July its audited 2012-14 business plan said, "Discussions around the exact price are still ongoing". The outsource provider had in June become responsible for "spend on IT infrastructure". But the trust allocated £4.4m to make its infrastructure "fit for purpose" for Cerner Millennium. It allocated £10m to the Millennium project for 2011-13. It placed with a solicitor money owed to the University of Pittsburgh Medical Center (UPMC), which it contracted 27 months ago to implement the software.
A procurement brief sent to suppliers on 5 November 2010 said the trust had been unable to cope with the ramifications of the decision to go its own way with electronic patient records (EPR).
"Current service arrangements and the current IT services organisation are simply not equipped, organised or capable of meeting the new requirements driven by EPR.
"The strategic decision to implement an EPR solution demands a significantly enhanced IT service model. The skills and capability required to support a solution at the very core of the hospital far exceeds the capability in place today," it said.
A spokeswoman for Royal Berkshire said the CSC contract was for seven years with three-years' additional extensions and a total possible value of £45m. She said the trust justified its use of an accelerated procurement procedure by the time and money it would save.
"In the current economic climate, a faster procurement process will benefit the trust by reducing internal resources required to understand the market offerings," she said in a written statement.
Roger Wallhouse, chairman of data migration specialist Stalis said a number of trusts had outsourced infrastructure but none that he knew had gone as far as to outsource applications as well. Large trusts that could afford an integrated system like Millennium would seek to maximise the return on their investment by decommissioning other applications, he said.