The National Programme for IT (NPfIT) in the NHS has confirmed that deadlines have slipped for the award of the initial Local Service Provider (LSP) contracts, meaning that the first major contract award deadline set by the programme will be missed.

Contracts for the first two LSPs – London and the North East – were due to have been announced by the end of October. E-Health Insider has been told that the dates for best and final offer for phase one LSP contracts have now slipped from 7 October to 24 October, while contract award has slipped from 31 October to 21 November. It is not yet clear whether phase two LSP contract award dates have also slipped.

Sources indicate that the delays to the LSP contracts, though partly attributable to ongoing negotiations about risk transfer and contractual terms and conditions, also relate to major recent changes in the systems being specified. These changes are said to stem from the development of a much more constructive dialogue and debate between the national programme and short-listed suppliers.

One senior industry figure told E-Health Insider: “The programme has changed radically in the past few weeks and months. Its becoming far more of a dialogue than it was.” The source added: “It’s getting a lot more real and businesslike. It’s not slapping each other against the wall and seeing who lasts the longest.”

The source was sanguine about any short delay in reaching first best and final offer and following this the final contract award, stressing that the procurement process had moved at warp speed over the past year in comparison to past NHS IT procurements.

Another anonymous supplier pointed out that although the first two LSP contracts were delayed, they would provide the template for the remaining three LSP contracts that would follow.

One further industry source added: “Everyone has spent the last 4 months saying just how complex the negotiations are, so it’s surprising that anyone thinks a few weeks slippage is a big deal given the complexity being sorted.”

However reasonable the delay though, it does fly in the face of the deadlines repeatedly set out by NHS IT Director General, Richard Granger, who has been adamant that the first two LSP contracts would be signed by the end of October and all contracts signed by the end of the calendar year.

Whether all contracts will be signed by the end of the year is now questionable. From being utterly emphatic that they will be signed by tear end, the latest statement from the NPfIT is for the first time aspirational: “We continue to advance our procurement process as rapidly as good practice allows and plan to be in a position to award our contracts throughout the remainder of 2003.”

The statement stressed the complexity of the negotiations underway and the need to allow sufficient time: "We are allocating the time which we judge to be necessary for these negotiations, particularly in the light of the mix and number of suppliers who are involved in the competition.”