BT has NHS ‘over a barrel’ - Ovum

BT under-bid on the NHS National Programme for IT in order to win a contract, and as one of only two suppliers on the programme has the NHS “over a barrel”, according to a damning analysis by Ovum of government procurement.

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BT under-bid on the NHS National Programme for IT (NPfIT) in order to win a contract, and as one of only two suppliers on the programme has the NHS “over a barrel”, according to a damning analysis by Ovum of government procurement.

ComputerworldUK.com was first to report this week that BT had been awarded more than a 50 percent jump in its patient records contract, an extra £546 million, taking its deal to £1.57 billion.

BT's work on the programme is covered only by a non-binding Memorandum of Understanding, rather a full contract. It is one of two suppliers on the £12.7 billion programme, serving London and some southern trusts, while CSC serves the north and east of England.

Tola Sergeant, senior analyst at Ovum, said BT has the NHS “over a barrel”.

“As one of just two remaining LSPs, BT’s very public threat to walk away from the contract carried real weight,” she said. If BT had quit the programme, after booking £1.6 billion writedowns – reportedly attributable to the NHS work and a Reuters contract – the project “would have faced a very bleak future”.

She said BT had under-priced its original contract bid, adding that “at the time rival IBM’s bid for the London contract was rumoured to have been £1.4 billion”, over £400 million higher.