BT contract reset worth additional £55m funding

22 Jan 2008

Health minister Ben Bradshaw has revealed that BT’s contract reset last summer was worth £55m additional funding, to reflect new requirements and additional functionality.

Responding to a query by shadow health secretary, Stephen O’Brien, over why the ‘reset’ was necessary and what the costs of this were, Bradshaw said that costs and resets were for ‘enhancements’ and not changes to terms and conditions.

EHI exclusively revealed BT’s desire to switch to the best-of-breed approach in April when the LSP confirmed they would deploy a different version of the Cerner Millennium software to that deployed in the South of England.

The contract reset was confirmed by BT to EHI last November.

In a written answer to the Commons, Bradshaw said: “In the course of the reset of the BT contract for London, new requirements and additional services were identified by the NHS, for which a separate business case and funding of £55 million—£41.8 million capital and £13.2 million revenue—over the lifetime of the contract was subsequently approved.”

The health minister added: “This does not represent an increase in the original cost of the contract for the original specification, but reflects new requirements for additional functionality.”

BT was unable to confirm the extra funding set out by the minister, but told EHI: “As you know, BT completed the London contract reset with Connecting for Health in summer 2007. It's normal practice when managing contracts of this scale to review requirements with the customer on a regular basis. This helps to ensure that we meet their needs as priorities and requirements can shift over time.”

In explaining the need for contract resets, Bradshaw stressed that suppliers could not change the contractual arrangements they agreed to in 2005.

“There has been no renegotiation of primary supplier contracts let by national health service Connecting for Health under the national programme for information technology, and no changes to their terms and conditions. There have, however, been ‘resets’ of the contracts.

“Reset is a normal, repeatable, process, for contracts with a long lifetime to ensure that their ongoing delivery reflects progress to date, current priorities, and deployment plans for the future, and that they continue to support the evolving needs of the NHS. However, reset allows for the option of agreeing enhancements to existing services or functionality that does not effect a change in contract scope or risk allocation,” he wrote.

Fujitsu and CSC said their contract resets were still ‘ongoing’ along with ‘commercial negotiations’.

A CfH spokesperson told EHI: “Until we have reached agreement with our suppliers, we are unable to comment further on contract reset negotiations that are still underway since these will not yet have the necessary approval through either the NHS or the supplier’s governance processes and could compromise sensitive commercial positions.”

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Hansard reference

Joe Fernandez

Reader's Comments

Yuk

22 Jan 08 02:48

Incredible - to a mere mortal

Rip Off

22 Jan 08 09:27

In other words whenever new functionality is required the taxpayer pays through the nose for it unlike other suppliers who have to do it for nothing to remain competitive.

The real rip off...

22 Jan 08 21:52

In the end the taxpayer pays either way - because the suppliers have to re-coup their investment in the licence cost. However, with the current model the price is much higher because of the multiple layers of un-necessary admin and obfuscation between end users and healthcare system experts - namely NPfIT, the XPfITs and the LSPs - all of which need to justify their reason for existence.

Enhancements!!!!

22 Jan 08 23:28

An extra £55m for enhancements! Now that is just for BT. How much more are we going to have to pay for "enhancements" to Fujitsu and CSCA at their contract "Resets"?

What enhancements? The OBS they said they could deliver is very comprehensive.Who is leading these negotiations?

Isn't it about time that we saw these contracts and what is actually being purchased on our behalf locally?

Fine to tell us we have to implement products we can't even see sight of yet, but not okay to let us see these contracts. I am sure they are not vapour ware as some of the software appears to be.

Very disenchanted.

(post edited by EHI)

Another view

23 Jan 08 07:39

When patients ask for new enhanced services, the NHS always asks for more funding - witness the current furore around patients wanting extended access to primary care services.

It seems a bit odd that the NHS doesnt seem to think that its suppliers are allowed to do the same.....

The Real World

23 Jan 08 09:35

Most of the comments here just highlight the astounding lack of commercial understanding within the NHS, god help us in the new world of Practice Based Commissioning.

Re: Another View

23 Jan 08 22:58

So you think there is some comparison to local Trusts asking for increased funding for changes in service delivery or patient choice on top of their annual baseline funding, with suppliers asking for millions for enhancements of systems which at the outset of the contracts,were supposed to be so clinically advanced in funtionality (the OBS) that these changes should have been in all probability anticipated and met?

Now that does take the biscuit!

Re: The Real World

23 Jan 08 23:17

So we in the NHS have "astounding lack of commercial understanding"?

Oh dear - have we touched a raw nerve?

Actually, I would say that the vast majority of us at local level have extensive commercial knowledge and experience, as we have been procuring and implementing IT systems for many years.

The Difference ....

We would have delivered by now, ensure value-added contracts and penalised heavily for non-delivery.

Seems to me that in over 4 years, we have PAS implementations taking longer than ever before to deliver and we have little or no clinical IT systems to speak of. Enhancement lists that are longer than previously, many of which are simply poor functionality in the systems being delivered. The standard of service delivery falls short of what was expected from such large IT companies.

So what do we do?

Reset the contracts and reward you by giving you more money, when you haven't met the terms and conditions for delivery in the original contracts!

Now that makes perfect commercial sense!!

Irrational Behaviour

23 Apr 08 12:32

Risk perception and management is an area where the enterprise 'Consulting, Training, and Research in Risk Communication', has formulated 'Risk = Hazard + Outrage' to encapsulate its effect. A high outrage component can jeopardise any attempt to explain a hazard (e.g. of Agent Orange), and a negligible hazard can be offset by high outrage.

I'm not saying the risk from MRSA is negligible, but the risk from the keyboards probably is if combined with a good handwashing regime. Never mind the fact that these keyboards have a flashing light, are they cost effective. 10% reduction indeed, measure that!