Confusion as EDS dropped from NHS IT bidding

The NHS' £2.3bn IT programme is clouded in confusion with the government claiming it has dropped EDS from the shortlist for one of the contracts.

EDS is now no longer in the running for the £150m electronic appointment booking system, leaving just Fujitsu and SchlumbergerSema to fight for the contract. But the company is still competing for the national integrated care record system and the local service provider bidding.

A spokesman for the National Programme for IT (NPfIT) in the NHS said: "EDS was deselected. It was a normal part of the procurement process."

The news follows the withdrawal earlier this month of US supplier Lockheed Martin from the contract to develop a national 'data spine' that will support a single electronic patient record system. Speculation at the time suggested that Lockheed was unhappy with the tough targets and performance penalty levels being set by the government.

The NPfIT, which is handling the bidding process under the leadership of Richard Granger, claims there is no crisis but will not give reasons why two major suppliers have left the race for one of the government's largest ever IT programmes in the space of a fortnight.

That, coupled with strict confidentiality clauses imposed on bidding companies, has led to an atmosphere of secrecy that is fuelling rumours about the programme. But the NPfIT spokesman said confidentiality is necessary to protect the integrity of the bidding process.

EDS declined to comment, citing the above-mentioned confidentiality clauses. Yet the NPfIT spokesman said he did not know why EDS was not commenting.

Anthony Miller, analyst at Ovum Holway, said it is only natural for Granger to push for the best deal for government and taxpayers but that could lead to suppliers being squeezed too hard in tough economic times.

"It is no good for suppliers to take a loss or significant pain over this. Maybe three or four years ago they would have bitten the bullet but they can't afford to do that now," he said.

He also hit out at the climate of secrecy fuelling the rumours and called on Granger to issue a public statement on the withdrawals and the reasons for them.

"It doesn't look good from outside and it gnaws away at the credibility of the project. Whether there is fire or not the smoke is getting thicker. Granger is the only one who can pour oil on the troubled waters as he has tied the vendors to secrecy," said Miller.