NHS Scotland awards £110m network contract to Capita

NHS Scotland has announced the contract for the Scottish Wide Area Network (SWAN) has been awarded to a partnership of Capita and Updata.

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NHS Scotland has announced the contract for the Scottish Wide Area Network (SWAN) has been awarded to a partnership of Capita and Updata.

The award of the seven-year, £110 million contract has been delayed after losing bidder BT took NHS Scotland to court claiming that the procurement process had breached regulations.

While the court ruled to lift the suspension that was preventing NHS Scotland from awarding the contract to the preferred bidder, BT is now suing the health body for up to £20 million in damages.

NHS National Services Scotland (NSS) chief executive Ian Crichton said: “Following extensive dialogue over the last year, I am pleased to announce the award of the SWAN contract to Capita. This was the strongest bid and offers excellent value for money for the public purse.”

SWAN aims to establish a single shared network and common ICT infrastructure across Scotland to enable public sector organisations in the region to share information more easily, and to cut networking costs.

The initial SWAN partners are NHS Scotland’s 22 health boards, Education Scotland, a consortium of five local authorities called Pathfinder North and another partnership of two councils known as Pathfinder South. According to Capita, a further 11 organisations plan to join the network in 2014, following final discussions.

More than 4,600 sites will be connected to the network, including schools, hospitals, GP surgeries, pharmacists and local council offices. The value of the contract could rise to £325 million over nine years, as more public bodies take up the framework.

“The Scottish Wide Area Network is a major step forward in Scottish public sector infrastructure which will create major savings and deliver an excellent service. SWAN is a good deal for the Scottish taxpayer and anyone who uses public services, whether in schools, councils, hospitals or elsewhere,” Crichton added.

Paul Pindar, Capita CEO, said: “This is an important contract win for Capita, placing us at the heart of public service delivery in Scotland and providing us with a platform to offer additional services and build our business here.” Tola Sargeant, analyst at TechMarketView, noted that the SWAN is the first “big deal” that Capita has won in networking since it acquired Synetrix and its broadband and infrastructure services capability in December 2009.

“A deal on this scale in this space has been a long time coming for Capita and it will be delighted to have proven that it can compete and win against pure networked IT players like BT and Cable & Wireless/Virgin Media Business. It goes without saying that it’s also a huge win for SME Updata, which is making a name for itself in the PSN market,” she said.

“Of course, failure to secure SWAN is a particular blow to BT, which currently provides networking services to NHS Scotland (as well as the NHS in England) via its N3 contract, which was worth £530 million over seven years when first signed in 2004.”

Meanwhile, with its new legal action, BT maintains that the tender process did not ensure that the contract was awarded on the basis of the most economically advantageous bid, in accordance with regulations.

NSS maintains that the process was “fair, robust and thorough”, and said that cheapest was not necessarily best.

"The best product for any given job is not necessarily the cheapest. Price was just one element in deciding the best bid. The other factors we scored were technical standards, performance and commercial and legal aspects. Each element was approximately 33 percent of the total score available," it said.

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