interesting news

Here is an extract from some questions and answers to Christine Connelly (CIO NHS Helath UK) published today, I have extract relevant bits.

What I take from it is that there are negotiations still in place that may see the deployment of Lorenzo in only a few less sites. If not the company may get massive payments (provided there has been no breach of contract).

Here are teh two relevant questions and answers:

Bacon: In the case of CSC and its software contractor iSoft, it would also appear that the companies may secure guarantees of substantial payments even if in practice NHS Trusts choose alternative products, so that there are many fewer deployments than planned.

Connelly: As I believe is widely known, as part of the original contracts, volume commitments were made to CSC (and all other LSPs) to ensure best value for money was obtained. This is balanced by the contractual commitment that payment for product is only made when the product has been deployed and is working.


Thus if the supplier fails to deliver, the planned payments are reduced. If a Trust takes an alternate solution which could have been delivered by the incumbent LSP, then in those circumstances it is appropriate that the supplier is recompensed. This has not occurred in my time as Director General for Health IT.


Bacon: I understand that the DH is negotiating a Memorandum of Understanding with CSC that would see 187 NHS trusts assumed to take the Lorenzo system; only 35 fewer than specified in the original ?3 billion contract.


But would you not agree that there is good reason to think that many fewer Trusts will in practice agree to take the system?


In March, Trusts across the North, Midlands and East of England were advised that the version of Lorenzo offered for deployment would have greatly reduced functionality. A number of Trusts have already indicated that they are not committed to Lorenzo and reserve the right to make other arrangements.

I note that in October 2010, you stated that: ?those who don?t [take Lorenzo] can do what they want and they won?t get penalised, however if we do not get enough trusts in totality to meet the contract then the NHS as a whole will be penalised.?

Does this represent good value for money?

Connelly: The Memorandum of Understanding you mention has not been agreed (and therefore not signed at this stage), and I therefore cannot comment on your speculation as to the precise numbers. The volumes we have been discussing with CSC have been based on the advice from the local NHS via the SHAs last year. As I explained in my earlier response, before any revised contract were signed, we would review and confirm any volume commitments with the local NHS.