CSC wins £1.9bn contract for North-east and Eastern

Computer Sciences Corporation has been awarded a nine-year contract to take over responsibility for Accenture’s North-east and Eastern regions of the £12bn NHS National Programme for IT.

Accenture will continue only as the provider of Picture Archiving and Communications Systems (PACS) in the two regions. The consultancy firm will transfer all its other local service provider responsibilities to CSC over the next 100 days.

Accenture’s departure follows the replacement of ComMedica as the PACS provider in the North-west and West Midlands, and the substitution of clinical software supplier IDX for Cerner first in the South and currently pending in London.    

CSC’s new contract for the North-east and Eastern regions is valued at £1,965m if all options are exercised.  Accenture will retain £110m of the £173m paid to it by the NHS, earlier this year the company made loss provisions of £250m against its NHS contracts, blaming delays on its software sub-contractor iSoft.

As a result of the deal CSC will become the prime contractor – local service provider – responsible for delivering the Connecting for Health NHS IT upgrade to 60% of England. CSC already had a £973m contract to upgrade hospital IT systems in the North-west.

Accenture appears to have negotiated a departure from its core role as a local service provider without paying the huge liquidated damages that CfH director general Richard Granger had said he would invoke for anyone departing the programme. 

In March Granger told a conference in Paris that any supplier struggling to deliver wanted to step away they would have to pay dearly for the “disruption” caused. “If they would like to walk away, it’s starting at 50% of the total contract value.”

Accenture has also terminated with sub-contractor iSoft with the two parties agreeing that “no further payments will be made between the parties” and “any potential litigation between the two parties relating to the period between 2 April 2004 and today’s date will be annulled.”

CSC will continue to offer iSoft software into the its two new regions, though they will be treated differently. iSoft will be be the exclusive provider of core software in the North-east and exclusive provider of "interim solutions" in the East and East Midlands,  but will only provide future solutions in this region subject to a benchmarking review.

The original two contracts awarded to Accenture at the end of 2003 were worth £1.1billion for the North-east and £943m for the Eastern region. Since being awarded the contracts Accenture has delivered a total of 827 of the 1,023 implementations so far delivered by NPfIT, mainly in primary and community care.

In a separate statement iSoft announced that as a result of the change in LSP in the North-east its contract with Accenture will be terminated.

iSoft said that its application suite “forms the core of the CSC Alliance’s software solution already being implemented in the North West and West Midlands region.

The software supplier said that it will “retain exclusivity in providing core software solutions in the North-east region” and will retain “exclusivity for interim solutions in the East and East Midlands region”, and be the preferred supplier for future solutions in the region in the future, and be preferred supplier for future solutions "subject to a benchmarking review."

The switch in LSPs are officially described as being “driven by NHS Connecting for Health and its suppliers’ ongoing desire to ensure that delivery of new systems is as rapid as is practicable within existing costs.”

The switch in prime contracts is said to be covered by tripartite binding agreements which conclude all material matters of contention associated with the agreements and which require Accenture to manage the transfer of its responsibilities to CSC in an orderly manner over the next 100 days.

Accenture will transfer responsibility for delivery of its main obligations within the National Programme for IT to CSC in the two clusters by 8 January 2007.

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