The DOH or the Department of Helath financial presentation to its toxic contracts with commotion NHS supplier CSC has diminish by £100m in just three months. The outsourcer determined that if the NHS were to eliminate its entire £2.9 bn contract with CSC it would cost the government a maximum of £329m in fees as of June 29, 2012. CSC stated that the NHS had eliminate the whole contract as of March 30 2012, the elimination fee would have been exceeded at £430m.
With the organizations directly locked into lengthy contract renegotiations due to be resolve by the end of August, the figures suggest a continued winding down of the contract between DOH and CSC. The exact date for signing the renegotiated inter in sympathy was due to on March 31, however the timetable has so far been twice extended. The Department of Health was clumsy to comment on the reduction in elimination fees because of the negotiation process underway.
Base on the CSC results, it lost $97m or £62 m in the NHS contract in the first quarter of the year. The comp0any saw total sales fall by 2% to $3.963bn. The CSC had to write off $1.5 bn after its continued failure to meet a 2007 deadline to deliver its Lorenzo patient records software to NHS trusts across two-thirds England.
The director at sourcing broker Burnt-Oak Partners, Robert Morgan stated that it is likely the termination fees will drop further as negotiations continue. He said that the two organization were locked into a tit-for-tat situations. HE also said that the termination fee will continue to reduce as they negotiate the terms and conditions, transfer liabilities and write off the books. The CSC’s main mission will be retain as much of the £329m as possible while at the same time getting out of obligations with the government.
Robert Morgan says that it was unlikely that CSC and the DOH would meet the latest agreement deadline at the end of the month. It was largely complex and controversial with a lot of vested interests involved. It is a war of attrition and they will probably keep extending the deadlines for some time. The CSC has frequently warned shareholders that there can be no assurance that an affiliation the NHS will be concluded by the August deadline or the terms of any such affiliation would be enthusiastic to CSC.