DH loses Fujitsu dispute

The Department of Health has reportedly lost its long-standing court battle with Fujitsu over the company’s departure from the National Programme for IT.

A legal dispute between the DH and the company has been ongoing since 2008, when Fujitsu’s £896m contract for the South of England was terminated.

The company was supposed to install Cerner Millennium at trusts across the South, but left the programme with just nine ‘live sites’ in place. 

At one of its inquiries into NPfIT last year, the Commons’ health select committee was told that it was seeking £700m. At the same hearing, it was reported that the legal costs in the case had reached £31.5m.

The case has not been heard in public, but the Daily Telegraph has reported that the DH has now lost the dispute.

The BBC has said there are still legal arguments over how much of the £700m that Fujitsu is seeking the government will have to pay. 

Fujitsu told EHI in a statement that it will not confirm or deny the reports by the Daily Telegraph. “Fujitsu has been a strategic partner to the UK Government implementing critical IT for the last 40 years.

“We are committed to working closely with the UK public sector for the next 40 years and beyond. However, we do not comment on our government contracts,” said a Fujitsu spokesperson.

The government echoed Fujitsu’s response. A government spokesperson said: "Fujitsu is an important supplier of IT services to the government. The government does not comment on contractual disputes with suppliers.”

Speaking to the BBC, Conservative MP Richard Bacon said it was doubtful that the company would receive a £700m settlement as it only completed parts of its agreed contract, but that the government could not cover up the size of the final settlement.

"We never learn from our mistakes because there is learning curve, but when things go wrong with IT the response is to keep it quiet, he told the BBC.

"I don't know how the government can honestly keep this number quiet. It simply cannot do it. It is not possible or sensible to keep it quiet when you are spending this much money.”

In 2007, contract negotiations between what was then NHS Connecting for Health and Fujitsu began, but after several attempts to ‘reset’ the company’s local service provider contract, the company withdrew from the re-negotiations.

At the time, CfH told EHI that despite their best efforts, “it has not been possible to reach an agreement on the core Fujitsu contract that is acceptable to all parties.”

The sites where Fujitsu was due to deliver Millennium were eventually taken over by BT, delivering the same system to London trusts, which put them on the London version of the system.

A £69m contract for BT to deliver Cerner Millennium to three new, or ‘greenfield’ sites: North Bristol NHS Trust, Royal United Hospital Bath NHS Trust, and Oxford University Hospitals NHS Trust, was agreed last April as part of the National Programme for IT in the NHS.

In the other big NPfIT cluster, the North, Midlands and East of England, the DH was locked in a long dispute with CSC after the government told the company it would not sign a re-negotiated version of its £3 billion local service provider contract for the area, after CSC did not deliver against its targets.

The DH eventually reached a revised agreement with CSC in September last year after a long contract negotiation, which removed its right as an exclusive provider of IT systems to the NME.

Read EHI editor Jon Hoeksma's opinion of the end of the DH/Fujitsu dispute in this week's Insight, 'The husky that came back to bite'.