Fujitsu’s £896m NHS IT contract to be terminated

NHS Connecting for Health is to terminate the £896m contract with Fujitsu to upgrade NHS IT systems across the South of England after the IT services giant withdrew from contract re-set negotiations.

Negotiations to ‘reset’ the Fujitsu local service provider contract have been underway since July 2007 but broke down.

Senior NHS staff in the South of England were told of the news today, after last ditch attempts to broker a deal failed last Friday with a final unsuccessful effort made on Tuesday. By withdrawing from the contract re-negotiations Fujitsu placed itself in breach of the original CfH contract.

In a statement NHS CfH told E-health Insider: "Regrettably and despite best efforts by all parties, it has not been possible to reach an agreement on the core Fujitsu contract that is acceptable to all parties. The NHS will therefore end the contract early by issuing a termination notice."

In a statement to EHI Fujitsu said: ‘Fujitsu Services can confirm that we have now taken the decision to withdraw from the National Programme for IT (NPfIT) contract re-set negotiations with NHS Connecting for Health as we did not feel there was a prospect of an acceptable conclusion. The NHS has advised us that they intend to end the contract early by issuing a notice of termination.

The Fujitsu statement added: “For the moment our work on the contract reverts to the terms of the original programme. We will work closely with the NHS to provide a smooth transition to the new arrangements.’

CfH has begun a crash programme of working up contingency arrangements. The agency said it acknowledged the work Fujitsu had done and “commitment to smooth transition arrangements”, but stressed it had to “protect the interests of the taxpayer and preserve the basis of contracts which ensure payment on delivery.

Gordon Hextall, the chief operating officer and interim director of programme and systems delivery for CfH, said in a letter today to trust chief executives in the South: “There are no immediate implications for live sites and Fujitsu Services Ltd will continue to support these Trusts to current service levels in line with the contract. We are working co-operatively and constructively with Fujitsu Services and the NHS to review the overall arrangements for providing systems to the sites that have not yet gone live with Cerner Millennium.”

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