The National Programme for IT has terminated the £90 million NHSmail contract with Electronic Data Systems to provide email and directory services to one million NHS staff.

Richard Granger, director-general of NHS IT, last week pulled the plug on the 10-year EDS contract for the NHSmail web-based email service.

A national programme spokesperson confirmed to E-Health Insider that the contract between EDS and the NHS Information Authority (NHSIA) was to end.
"The contractual relationship between the NHSIA and EDS as supplier for the NHS’s centrally managed e-mail and directory services is to end. Arrangements for continuity of service are being put in place."

No details were made available on why the contract had been ended or the arrangements being made for continuity of service.

According to a report in the FT the decision to cancel the NHSmail contract was taken Richard Granger, director-general of NHS IT, "after complaints about difficulties logging on to the system and other problems".

The decision looks certain to ring alarm bells among the suppliers recently awarded contracts for the National Programme for IT (NPfIT), providing the clearest demonstration of Granger’s willingness to invoke "step-in" rights, and terminate contracts with suppliers who are deemed not to be delivering.

According to the FT report EDS will now sue the National Programme for more than £10 million for terminating the contract without any compensation. EDS declined to answer any questions from EHI on termination of the NHSmail contract or whether it would sue.

The 10-year contract for the NHSmail service was awarded to EDS by the NHSIA in September 2002, shortly before Granger took up his post as director general.

EDS won the NHS deal in competition with BT Syntegra, which has since taken the £620m deal to provide the core NHS Care Record Service patient record for the new IT programme, which also contains an NHS directory, needed to authorise staff access to the patient record – apparantly a duplication of the NHSmail directory service.

In October 2003, E-Health Insider exclusively reported that six months on from its launch take-up of NHSmail remained limited, with only 25,074 NHS staff – approximately 2.3% of total – having activated a personal NHSmail account by 25 August, 2003.

However, at the time the NPfIT conveyed a far more sanguine view of the NHSmail service, and stated that NHSmail had yet to be formally launched.

This position, however, appeared to directly contradict an announcement by the Department of Health on 25 March 2003 about NHSmail’s ’live’ status, and heavy promotion of the availability of the service at the Healthcare Computing 2003 conference in the same month.

In October 2003 an NPfIT spokesperson told EHI: "The NHSmail service is currently in its development phase prior to being fully launched. A limited service went technically live in February 2003 to early adopters."

The spokesperson added that a full version of the service is due to be launched ’soon’ but declined to provide details. No subsequent ’full launch’ of the service has been announced by either the NHSIA or NPfIT, which took over responsibility for the NHSmail contract in July 2003.

According to the FT report EDS believes that the NHSIA has failed to promote use of NHSmail. The report further states that "senior executives in the IT programme say they were not prepared to promote a service with which they were not happy".

Cancellation of the e-mail contract is the latest blow to EDS in the NHS, where it has failed to win a series of major contracts in the past five months. Despite bidding a significantly lower price, EDS failed to win the electronic appointment booking contract in October 2003; was not selected as a local service provider in either the South or East of England; and in January failed to win the New National Network (N3) deal for the NHS.


NHSmail take-up minimal so far