CSC writes off $200m from NHS IT contract

CSC, a key supplier to the troubled National Programme for IT, reported a loss of $204m relating to its NHS contracts.

CSC, one of the two key providers of the troubled National Programme for IT (NPfIT)electronic patient records systems, has written off $204m (£129m) relating to its NHS contracts, the company said in its third-quarter results.

CSC had braced shareholders in December for a write-off of the entire $1.5bn it has invested in work on the NPfIT after rescue negotiations with the NHS broke down. The supplier said the UK government had rejected draft agreements it and the NHS had prepared in the summer and which had been waiting for government approval.

A full update was expected in its third-quarter results, but the company said that as discussions continue with the client, guidance will not be provided at this time but will be communicated at a later date after discussions are completed.

Michael Laphen, CEO of CSC said: “Notwithstanding the NHS charge, discussions continue toward defining a programme scope and a market potential that builds upon our accomplishments to date.”

CSC has had a troubled history with its NHS deal. The Department of Health said 12 months ago that it was considering scrapping the contract, following a series of missed milestones.

But in May last year, MPs were told that it might cost more to scrap the contracts than to continue with them, potentially exposing the government to a damages claim for breach of contract.

After the NHS write-off, CSC reported third-quarter revenue of $3.76bn, down from $4bn in the same period last year. The supplier made a net loss of $1.39bn in the quarter, compared to a $243m profit for the same quarter the year before. 

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