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March 2, 2016updated 05 Sep 2016 8:05am

Fujitsu, NHS IT contract dispute set to drag on for another two years

News: The dispute arose following the cancellation of a £700m ($977.69m) IT contract back in 2008.

By CBR Staff Writer

The dispute between Fujitsu and the UK government over the cancellation of a NHS IT contract could drag on for a further two years.

The NHS handed out a number of contracts in efforts to digitize records, but cancelled its contract with Fujitsu in 2008 citing poor performance.

According to media reports from 2014, a legal fight between the two parties ended with arbitrators siding with Fujitsu, with the Japanese technology group set to recieve millions in compensation.

Fujitsu, head of Europe, Middle East, India and Africa, Duncan Tait was quoted by Reuters as saying: "talks on a contract settlement continued."

"We are still in the arbitration process," he told in a briefing of journalists in London. "We would hope that would conclude within the next two years or so," he added.

PAC (Public Accounts Committee) which conducted an investigation into the incident revealed that as much as £31.5m was spent by the health department in legal costs, while trying to fight with Fujitsu.

The initial contract was part of a £11bn programme by the UK department of health to modernise its computer systems and to create a digital health record for every patient.

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Tory MP Richard Bacon, a member of the PAC, told officials who appeared before the committee last year: "The contracts were let [awarded] in an enormous hurry, in total secrecy, bound up with huge confidentiality clauses and it was only after they were all signed – quite rapidly after – that people became aware that the contracts would not deliver what was required."

A panel of lawmakers also criticized both the UK Department of Health and the deals for offering ‘poor value of money’ amid a badly planned digitalisaition effort.

Tait refused to provide any further details about negotiations, like the amount that Fujitsu expets from the UK government as compensation.

According the accounts from the company’s UK subsidiary, it is expecting a significant payout.

UK Parliamentarians have cited in their reports that Fujitsu is seeking as much as £700m as compensation.

 

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