NHS IT legal bill hits £2.6m in fight with Fujitsu

The government has spent over £2.6 million on legal costs to tackle an ongoing dispute with Fujitsu, after the supplier left the NHS National Programme for IT thirteen months ago.

The figure was revealed in a parliamentary answer, written by new health minister Mike O’ Brien.

Asked by the Conservatives how much how much had been spent on the “NHS IT dispute” with Fujitsu, he said: “As at 11 June 2009, payments for accountancy, and legal and associated professional services in connection with the dispute resolution process totalled some £2,613,000.”

The Department of Health and Fujitsu declined to comment on the latest developments, for legal reasons.

A source close to the programme told Computerworld UK that the parties were aiming to settle any fees for termination out of court, to avoid further protracting an already expensive process. But it not known how successful this process has been so far.

It is understood that Fujitsu may be looking for a "sizeable" termination fee, the source said, having spent large amounts of money rolling out the systems in the south of England. Fujitsu is thought to have received a small fraction of what it has spent, because the government pays on system delivery, and Fujitsu still had many NHS trusts to roll out systems to.

The contract was ended in May last year, after the NHS and Fujitsu had held protracted talks that failed to result in an agreement. They disputed the costs and work involved in delivering locally-tailored patient administration systems to hospital trusts.

At the time, the NHS said it chose to terminate the agreement. Fujitsu said trusts unfairly "withheld payment" until it delivered hundreds of changes beyond what it claimed was the agreed scope.

Work continues on the £12.7 billion programme, with BT and CSC the only contractors. The latter has a £3 billion contract.

The value of BT’s deal was dramatically increased earlier this month by half a billion pounds, to £1.57 billion, after it took over some of Fujitsu's work. But analysts have speculated that its reported threats to quit the programme meant it had the NHS "over a barrel" in contract negotiations.

Copyright © 2009 IDG Communications, Inc.

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