EDS confirmed that the NHS had pulled the plug on the 10-year GBP90 million ($170m) deal. Rather than use a termination clause, which would have resulted in a compensation payout to EDS, it has simply cancelled the contract, infuriating EDS executives. In a statement, the Plano, Texas-based company said it would be seeking compensation and it was disappointed at the NHS’s decision to terminate the contract without seeking mediation.
EDS claimed that it had been fully committed to the program and cited praise from Sir John Pattison, the senior responsible owner at the NHS Information Authority, who said in March 2003 that it was one of the two best examples of IT implementation in the NHS.
The deal was announced in September 2002, just before Richard Granger took over as head of IT at the NHS. The service, NHSMail was launched in February 2003, in what was claimed to be the one of the largest corporate email system deals ever. However, relations soon began to sour, and in October 2003 it was reported that just six months after going live, take-up of the email service had reached only 25,000 of the NHS’s 1.2 million staff, or 2%. That figure is reported to have risen to just 65,000, or 5.4% now.
EDS, which used to be the UK government’s preferred IT services provider, has fallen from favor over the last year. In December it lost a $5bn contract with the UK Inland Revenue to rival Cap Gemini Ernst & Young.