12 March 2004
The health service and EDS are to take their differences to mediation after it emerged that the IT outsourcing company was seeking compensation for the cancellation of its e-mail contract.
The NHS National Programme for Information Technology (NPfIT), signalling a get-tough approach with contractors, confirmed this week that it had terminated the £90m contract for its centrally managed e-mail and directory service.
This follows concerns over 'unacceptable delivery delays, issues in the functionality of the services and service capacity'. It said take-up of the EDS service had been low and was not delivering the anticipated value.
EDS is said to be seeking £10m compensation, though the company would neither confirm nor deny that figure when contacted by Public Finance. However, it hit back at the NHS claims, saying that in March 2003 Sir John Pattison – the NHS Information Authority's 'senior responsible owner' – praised the EDS scheme as one of the two best examples of IT implementation in the NHS.
The company insisted the problems could have been addressed through the contract's dispute resolution procedure and confirmed it would pursue its contractual right to seek redress.
'EDS will be seeking compensation for the termination of the contract and will endeavour to do all it can to minimise any impact on the 62,000 NHS staff who currently use the service. EDS very much hopes that it can agree a way to ensure continuity of service with the NPfIT, although responsibility for ensuring continuity of services rests with the terminating authority,' a statement added.
An NPfIT spokesman insisted that allegations in the press that it had attempted to undermine the EDS system were untrue. 'The NPfIT and the NHS Information Authority deny that the NHS or any individual has sought to portray unfairly the service as failing or that the NHS has failed to promote the service without good cause,' he said.
'The NHS is committed to providing a cost-effective and high-quality e-mail and directory service to its users. The NHS came to the view after due and proper consideration that EDS has failed in its delivery of such a service, and it was for this reason that the NHS took the decision to terminate EDS's contract in accordance with its contractual provisions.'
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