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Story URL: http://comment.silicon.com/0,39024711,10005818,00.htm

NHS bidder blow is no crisis
Lockheed withdrawal down to its own resource issues…

By silicon.com

Published: Monday 01 September 2003

The NHS's £2.3bn IT modernisation programme was dealt a blow today with the news that one of the major contractors bidding for the electronic patient record part of the contract has pulled out.

Lockheed Martin officially declared the end of the summer silly season with its announcement and at first glance it looked like yet another government IT contract had run into problems even before it had got under way. Added to this were the additional rumours that the reason was demanding performance targets and penalties and that IBM and Accenture were also considering pulling out.

But that may be a little harsh on the government and it seems the story is not quite what it appears.

silicon.com has spoken to several sources close to the project today and it would appear that a combination of factors, all specific to Lockheed Martin, rather than the NHS, programme are responsible.

Lockheed does not have the resources of the top service providers like IBM, EDS and CSC and so bidding for the NHS programme at the same time as it is bidding for the £4bn MoD outsourcing contract would probably have stretched it too thin. With its background in defence, the MoD contract is the obvious choice for the one Lockheed should go for.

IBM and Accenture have also both denied the allegations they will pull out and it isn't hard to see where those rumours might have come from.

Although there are some concerns about the pace of the ambitious NHS project and the stringent confidentiality clauses for service providers there is a lot of respect for the NHS IT czar Richard Grainger and the general consensus from many of those involved is that if anyone can make it work it is him.

No doubt more facts will emerge over the coming weeks and months as the bidding process continues but, for now at least, the Lockheed withdrawal isn't the NHS crisis we've been led to believe.