CSC And NHS In Fresh Lorenzo Deadlock
SEC filing casts doubt on future of ‘unworkable’ Lorenzo records system
The NHS and Computer Sciences Corporation (CSC) appear to be no closer to an agreement regarding the future of the “unworkable” Lorenzo electronic database system.
CSC was heavily criticised by the government for its role in the failed £12.7 billion National Programme for IT (NPfIT), which was scrapped in September and which included the Lorenzo project. But CSC still expected to be paid £2 billion for its services, even though it had continually failed to meet project deadlines.
The two parties signed a non-binding letter of intent in March that appeared to have prevented the threat of legal action, but a filing to the US Securites and Exchange Commission (SEC) seems to have sown fresh seeds of doubt, suggesting that an agreement is not certain.
‘No assurances’
“As previously disclosed, on 2 March 2012, CSC and the UK National Health Service (the “NHS”) entered into a non-binding letter of intent (the ‘letter of intent’) pursuant to which the parties agreed to a set of high-level principles regarding contract scope modifications and value reductions and expressed their mutual intention to enter into a binding interim agreement (the ‘interim agreement’) reflecting such principles,” read the filing. “The letter of intent also included a Lorenzo-related standstill agreement, which expired on 1 June 2012.”
“On 31 May 2012, CSC and the NHS extended the Lorenzo-related standstill agreement to 31 August 2012,” it continued. “There can be no assurance that CSC and NHS will enter into the interim agreement or any amendment to the existing agreement or, if the parties do not enter into the interim agreement or an amendment by 31 August 2012, that the Lorenzo-related standstill arrangement will be extended.”
“Likewise, there can be no assurance that if the interim agreement or any amendment are negotiated and entered into, that such documents as finally negotiated will be on terms favourable to CSC or as provided in the letter of intent. “
The £900 million compromise supposedly reached in March promised to save the government £1 billion and allowed CSC to continue to pitch for work. More than 1,100 CSC employees have lost their jobs since the botched project, including 640 working on Lorenzo itself.
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