Southern contract reset deadline up

The deadline set for completing the contract reset in the South of England has expired without agreement being reached.

At the beginning of the current reset process, July 31 2007, January was set as the deadline in a Memorandum of Understanding (MOU) between local service provider Fujitsu and the Southern Programme for IT (SPfIT).

However, it was confirmed today by Sarah Elmendorf, the head of SPfIT, that agreement had not been reached by the deadline.

In a 31 January letter seen by E-Health Insider Elmendorf says: “SPfIT Board members in the south of England met on Tuesday 29 January to review the most recent Fujitsu proposal. While some progress has been made on the broad product set, SPfIT Board members reviewed the overall submission and were unable to accept it. As a result, the Memorandum of Understanding that was signed between us and Fujitsu in July 2007 (that started the Contract Reset) will expire on 31 January.”

E-Health Insider understands negotiations have been carried out by a handful of individuals on either side. The biggest stumbling block is understood to be additional resources – to make far-reaching changes to the delivery approach and what is delivered.

While the passing of the MOU-set deadline does not act as an immediate trigger, the existing contract between Fujitsu and CfH remains in place, it highlights just how difficult and protracted the current negotiations have been.

Elemendorf’s letter says: “The extant formal position will therefore be that both parties will revert to the contract as it was prior to the MOU from that point onwards. Nevertheless urgent commercial negotiations are continuing and I hope to be able to report progress shortly.”

One source told EHI the real hard deadline for completion may now be the NHS’s financial year at the end of March – indicating resolution may remain some way off.

As long as negotiations continue, key uncertainties remain for trusts in the South of England, including when they can expect products to become available and what functionality they will provide.

Re-negotiation of the contract has now been underway for the past seven months. A January board paper from South Central SHA, the host body for SPfIT, says: “A process to reset the contract was agreed with the LSP in July. Negotiations with Fujitsu are currently ongoing.”

As EHI reported last week, the direction in the South appears to be towards best of breed applications in areas such as pharmacy, child health and maternity.

Best of breed is the path already taken in London, where BT is to get an extra £55m following its recent contract reset. With Fujitsu being asked for more far-reaching changes the company is understood to be asking for a considerably larger sum in return, thought to be a key sticking point in the current re-negotiations.

Jon Hoeksma