BT negotiates extra NHS money for fewer trust go-lives

The National Audit Office has discovered that BT negotiated an extra £4m from the Department of Health when an NHS trust withdrew from deploying the Cerner Millennium system.

The Department of Health agreed to pay BT £546m to take over NPfIT work from Fujitsu when its contract was terminated in May 2008. The £546m deal required BT to help install the Cerner Millennium system at four acute trusts, and support the sites until October 2015.

But one of the four trusts later withdrew from taking the BT-supplied Cerner system under the National Programme for IT. This left BT having to deliver and support three trusts only.

Now the National Audit Office has learned that the Department of Health agreed to pay BT an extra £4m after the trust's withdrawal. In return for the money BT promised to provide extra Cerner functionality.   

Many in the NHS will be will be surprised that BT managed to secure more NHS money, given that they already regarded the payment of £546m as unjustified and excessive. Conservative MP Richard Bacon, who had asked the NAO to inquire into the payments to BT, believes that about £400m of the £546m has not been properly explained.

This is what the NAO told Bacon:

"The final price the Department agreed with BT for work at the eight live sites, 25 RiO deployments and four new Cerner Millennium deployments was £546 million. A breakdown of this price can be found at Appendix 1

"In the period since BT was contracted to undertake this work, however, the number of former Fujitsu sites at which BT will maintain services has reduced from eight to seven after one trust withdrew from the Programme. 

"The number of new Cerner Millennium deployments has also reduced from four to three due to one site withdrawing from the Programme.

"The memorandum I have agreed to prepare for the Committee [of Public Accounts] will include more detailed consideration of the Department’s decision to award the contract for the South to BT and the basis upon which the costs of the contract were determined and agreed. 

"This will include an exploration of the additional functionality which the Department secured which drove a change in the cost of the new Cerner Millennium deployments from £65 million for four to £69 million for three. 

"It will also consider the cost implications of subsequent changes to the scope of the work to be undertaken by BT under the contract…"

A breakdown of the £546m - now £549m - is included in a separate blog post

Copyright © 2010 IDG Communications, Inc.

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