MCN Direct Newswire

Vol. 3 No. 1, 5 January 2004

This issue is sponsored by:

Cedar Software and Onyx Software

This issue news

1. Accenture and CSC secure key NHS contracts
2. IBM dropped from $7bn MoD shortlist
3. Home Office plans to offer ID card contract
4. Atos Origin faces tough six months
5. PA strengthens international board
6. Further information - feedback/forward to a colleague/unsubscribe

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1. ACCENTURE AND CSC SECURE KEY NHS CONTRACTS

Accenture and CSC have won the contracts to deliver care records systems to two out of the five UK regions created under the NHS' multi-billion dollar National Programme for IT (NPfIT).

Accenture's $1.67 billion, 10-year win in the Eastern region - working with Siemens, Microsoft, iSoft and Avanade - follows its success in the North East, where it secured a $1.9 billion deal against competition from a Cerner-led consortium (MCN Direct 2-47).

CSC's $1.74 billion, 10-year contract covers the North West and West Midlands region, with CSC leading a consortium including Hedra, iSoft and IT lifecycle management specialist SCC.

CSC beat teams led by IBM, BT and Fujitsu to the contract, leaving IBM without a slice of the NHS pie despite early indications that it expected to secure a significant tranche of the business.

Commenting on the project awards, director general of NHS IT Richard Granger said: "We are very pleased that contracts have been awarded in line with the schedule we committed to in January 2003. This is due to the calibre and commitment of the National Programme team and the efforts and co-operation of all bidders, enabling us to achieve best value for patients, the NHS and taxpayers."

The largest and most valuable local service provider contract, covering the Southern region, is due to be awarded this month after further negotiation that Granger claims will allow the NPfIT to achieve "an optimum balance between cost, risk, services and commitment for the systems and services specified".

Still in the running for this contract are consortia led by Fujitsu, PlexusCare - comprising EDS and LogicaCMG - and SchlumbergerSema.

Looking forward, Granger declared: "Our focus now moves to the challenge of ensuring the timely delivery of high-quality services, which we will approach in a similar vein, with attention to clear plans, clear milestones and effective partnership working."

2. IBM DROPPED FROM $7BN MOD SHORTLIST

IBM has been cut out of the competition for a $7 billion Ministry of Defence contract that will create a single integrated IT infrastructure for MoD locations worldwide.

This blow to IBM - and its consortium partners BAE Systems, Computacenter, Steria, NTL and Echelon - follows its failure to win the $1.1 billion National Health Service electronic patient care records contract, or any of the four local service provider contracts so far awarded under the NHS' National Programme for IT (MCN Direct 2-47 and above).

Surviving IBM on the MoD shortlist are three consortia: Atlas comprising EDS, Fujitsu, Cogent, General Dynamics and LogicaCMG; Radii comprising CSC, BT, Cap Gemini Ernst & Young and Thales UK; and a consortia led by Lockheed Martin which includes Deloitte's consulting arm, Hewlett-Packard, Qinetiq, SAIC and Unisys.

The three remaining bidders for the 10-year Defence Information Infrastructure or Future contract will start negotiating with the MoD this month, before presenting 'best and final' offers. A preferred bidder is due to be announced this autumn, ahead of a contract award in the first quarter of 2005 and go-live of all systems by 2008.

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3. HOME OFFICE PLANS TO OFFER ID CARD CONTRACT

The Home Office is expected to tender a multi-million dollar contract to build and run a national identity card register - putting IT services firms such as Cap Gemini, EDS and SchlumbergerSema in contention for another controversial Government programme.

The Government's identity card scheme will be set out in a draft bill this year and is likely to include building a database that supports ID cards containing biometric details such as iris scans or fingerprints. This part of the project is expected to cost over $300 million, with the total cost of the scheme running to more than $5 billion when the Government starts to issue ID cards in 2007.

While the lobby against ID cards is vociferous, the Government says it must match moves made in the US and European Union to include biometric information on travel documents, visas and residence permits if it is to increase national security and challenge illegal immigration.

Passports containing biometric information are expected to be issued from 2005, following a six-month trial starting this month. SchlumbergerSema has been selected by the UK Passport Service to carry out the trial, which will include 10,000 individuals carrying personalised smartcards with both printed and electronic information.

MORI will enrol individuals for the trial and survey its results, with SchlumbergerSema leading a technology consortium of NEC (providing its automated fingerprint identification system), Identix (offering fingerprint capture and facial matching technology) and Iridian Technologies (supplying iris recognition technology).

4. ATOS ORIGIN FACES TOUGH SIX MONTHS

Atos Origin has issued a trading update for 2003, confirming that its revenues will be marginally lower than in 2002 but promising an operating margin in excess of 8%.

The IT services company has based the update on trading through October and November, and forecasts another six months of tough market conditions across Europe despite some stabilisation in the region.

Atos Origin will make its full-year financial report on 10 March and says the results will include a $283 million charge against the value of goodwill associated with Atos KPMG Consulting. The charge is about one-third of the price paid by Atos Origin for the KPMG Consulting businesses in the UK and the Netherlands, but the company maintains the acquisition remains justified in meeting its strategic intent of driving top-line growth in the medium to long term.

In relation to its acquisition of SchlumbergerSema, Atos Origin said a prospectus will be issued to shareholders on or around 15 January, ahead of a meeting to approve the acquisition on 22 January. The deal is expected to close at the end of the month.

5. PA STRENGTHENS INTERNATIONAL BOARD

PA Consulting has promoted IT consulting group head Michael O'Higgins and life sciences business boss Nick Hughes to its international board.

O'Higgins joined PA in 1997 and has 25 years' international experience of consulting on public policy strategy, information systems and change delivery. His UK clients have included most government departments as well as the Passport Service and the Office of the e-Envoy.

Hughes joined PA in 1987 and leads its life sciences business covering pharmaceuticals, biosciences, medical devices and healthcare provision organisations.

Commenting on the appointments, PA CEO and executive chairman Jon Moynihan said: "Looking ahead to 2004, PA will be facing a number of new issues and the board looks forward to having the wisdom and capabilities of Michael and Nick to add to our discussions."

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