Category Archives: legal disputes

NPfIT – criminal incompetence says The Times

By Tony Collins

In an editorial not everyone would have seen, The Times said the history of the NPfIT was “one of criminal incompetence and irresponsibility”.

The main leader in The Times on 23 September had the headline “Connecting to Nowhere”.

It said:

“The comically misnamed Connecting for Health will continue to honour its contracts with big companies and to swallow taxpayers’ money for some time to come: up to £11bn on current estimates. The figure demonstrates the truly egregious scale of the previous Government’s incompetence on this issue: this vast sum seems to have been committed irrevocably, even though the project has never achieved its objectives.

“The story is a dismal catalogue of naivity, ambition and spinelessness. NHS managers and officials …were [not] brave enough to question the direction of travel at crucial moments when IBM and Lockheed pulled out of the project early on. Whitehall was sold a grand vision by consultants, software and technology companies charging grandiose fees. It signed contracts that appear to have been impossible to break when the promised land did not appear. Yet no one seems responsible. No one has been sacked. Most of the officials involved have long moved on…

“There have been spectacular failures in the private sector too. But businesses, with tighter controls on spending, tend to halt things earlier if they are going wrong. Many prefer off-the-shelf systems such as SAP or Oracle, which are tried and tested. They know that it is cheaper to adapt their processes, not the software.

“This newspaper is in favour of serious investment in technology, which could play an important part in economic growth. The NHS debacle has done enormous damage to this country’s reputation for expertise in IT systems. The lessons for the future are clear. Governments must hire people who can make informed and responsible procurement decisions. Patients, in every way, are going to end up paying the price.”

A separate article in The Times 0f 23 September included comments by Campaign4Change whose spokesman said that if the Department of Health continues to spend money on NPfIT suppliers it will probably get poor value for money.

Comment:

Compare the remarks in The Times with those of David Nicholson, Chief Executive of the NHS and Senior Responsible Owner of the NPfIT who refused to agree to a request by 23 academics to have an independent review of the scheme. Nicholson could not contain his enthusiasm for the NPfIT when he told the Public Accounts Committee on 23 May 2011:

 “We spent about 20% of that resource [the £11.4bn projected total spend on the NPfIT] on the acute sector. The other 80% is providing services that literally mean life and death to patients today, and have done for the last period.

“So the Spine, and all those things, provides really, really important services for our patients. If you are going to talk about the totality of the [NPfIT] system … you have to accept that 80% of that programme has been delivered.”

It’s difficult to accept Nicholson’s figures. But even if we do, we’d have to say that the 20% that hasn’t been delivered was the main reason for the NPfIT: a national electronic health record which hasn’t materialised and isn’t likely to in the near future.

The contrasting comments of The Times and Nicholson’s are a reminder that the civil service hierarchy at the Department of Health operates in a world of its own, unanswerable to anyone, not even the Cabinet Office or Downing Street.

Can the Department of Health be trusted to oversee health informatics when it has such close relationships with major IT companies and consultants? While Katie Davis is in charge of health informatics there is at least an independent voice at the DH. But as an interim head of IT how long will she last? The DH has a history of not being keen on independent voices.

Nicholson: still positive after all these years.

NPfIT goes PfffT.

Beyond NPfIT.

Surge in tenders for non-NPfIT systems.

Investors’ writ against CSC on NHS contracts – more detail

By Tony Collins

The Guardian has published the 123-page writ against CSC by lawyers acting behalf of some of the supplier’s investors. The writ contains many allegations against CSC and named directors. The company’s response is that it is corporate policy not to discuss litigation.

The legal action appears to have been based, in part, on CSC’s poor share price, which is today near a five-year low, and the supplier’s repeated positive statements and assurances on the performance of its NHS IT contracts and its iSoft Lorenzo software

These are some of the claims made in the document:

– Lorenzo was originally designed by iSoft as a one-size-fits-all software for use in local medical practices. “However, the UK healthcare system is highly diverse, ranging from large university hospitals to small private medical practices to prison medical facilities. Thus, according to the Deputy Head of Testing for Lorenzo, Lorenzo was never the correct software for the job. Lorenzo therefore required significant development before it could be deployed throughout the UK’s healthcare system.”

– In September 2008, after years of delays in Lorenzo’s development [CSC] sent a Delivery Assurance Review Team to England to assess the development and testing of Lorenzo. In mid-September, the Testing Review Team met with the Deputy Head of Testing for Lorenzo, a CSC employee from December 2007 until April 2011. The Deputy Head of Testing told the Testing Review Team that the level of testing and test results for Lorenzo was “abysmal,” and that the various releases on which the project was based could not be delivered on time. Subsequently [a CSC employee] told the Deputy Head of Testing to “shut up,” which he took to mean that he should not further criticise the quality of the testing nor the testing results.

– The Deputy Head of Testing claimed that the Lorenzo software was rife with severe defects that were unacceptable under the NHS Contract. The Deputy Head of Testing said that the software defects were subject to the following ratings: Severity Level I: the defect cause important part of the Lorenzo system to fail. Severity Level II: similar to Severity I, but the defect has a workaround. Severity Level III: the defect is an important defect, but one that would not stop the system from functioning. Severity Level IV: defect is a minor defect and would not impact the Lorenzo system’s function, but would be a nuisance to a software user.

– According to the Deputy Head of Testing, throughout 2008 and 2009, the level of Severity I and II defects in every release of Lorenzo was “high and grossly beyond” what the NHS would accept. According to the Deputy Head of Testing, while CSC publicly reported that it had met certain delivery milestones and therefore could recognize revenue, CSC’s statements in this respect were misleading in view of the software defects detailed above.

– CSC said in November 12, 2008, when analysts asked about missed deadlines, that “Our confidence continues to build on the program. We are pleased with our progress.”

–  In financial statements CSC continued to assert that the NHS contract was profitable and the Company expected to recover its investment.

– Shortly before the Deputy Head of Testing retired from CSC in early April 2011, he sent an email directly to a CSC director, copying several other CSC executives, in which he said ‘You hope that you will succeed by August 2011. I do too but you won’t. The project is on a death-march where almost as many defects are being introduced as are being fixed.”

–  by 2006 CSC had determined that it had no believable plan for delivering on the NHS Contract and should not have booked revenue under the contract from that point forward.

– The significance of the NHS Contract to CSC “placed the project squarely in the spotlight of Wall Street analysts”.

–  CSC “continuously denied media reports critical of CSC’s performance of the contract”

CSC is expected to file its response to the allegations in due course.

CSC sued on losses over disastrous NHS contracts – Observer

CSC class action – document in full on Guardian’s website

CSC repays £170m to DH after non-signing of MoU

By Tony Collins

CSC reports today that it has repaid to the Department of Health £170m of a £200m advance it received earlier this year for NHS IT work that was due to be carried out under a memorandum of understanding.

The MoU was not signed as had been expected by 30 September 2011, so CSC has repaid the money.

But the Department of Health has entered into an “extended advance payment agreement” with CSC for £24m.

In a statement dated 3 October 2011 CSC has also disclosed that uncertainty continues over the future of its NPfIT contracts that are worth about £3bn.

It says that it is having a series of meetings with the NHS and Cabinet Office officials over the “next several weeks” and adds that: “there can be no assurance that the MOU [memorandum of understanding] will be approved nor, if it is approved, what final terms will be negotiated and included in the MOU”.

The statement relates to CSC’s negotiations with the Department of Health and the Cabinet Office’s Major Projects Authority over a draft memorandum of understanding that proposes cutting the cost to taxpayers of CSC’s contracts by about £800m but would cut back planned deployments of Lorenzo by nearly two thirds and could nearly double the cost of each remaining deployment. One Cabinet Office official has described the terms of the memorandum of understanding as unacceptable.

CSC says today that “progress is continuing in development and deployment projects under the contract in cooperation with the NHS, although progress has been constrained due to the uncertainty created by the government approval process”.

It adds:

“Humber NHS Foundation Trust has been confirmed as the early adopter for mental health functionality to replace Pennine Care Mental Health Trust, which withdrew as an early adopter in April 2011, and CSC and the NHS are preparing to formally document this replacement under the contract.

“On April 1, 2011, pursuant to the company’s Local Service Provider contract, the NHS made an advance payment to the company of £200m related to the forecasted charges expected by the company during fiscal year 2012.

“The amount of this advance payment contemplated the scope and deployment schedule expected under the MOU and the parties had anticipated that the MOU would be completed and contract amendment negotiations would be underway by September 30, 2011.

“… the advance payment agreement provided the NHS the option to require repayment of the advance payment if the parties were not progressing satisfactorily toward completion of the expected contract amendment by September 30, 2011.

“Because completion of the MOU has been subject to delays in government approvals and, as a result, contract amendment negotiations have not progressed, the NHS required the company to repay approximately £170m of the April 1, 2011 advance payment on September 30, 2011, and the company agreed and made the repayment as requested.

“Also on September 30, 2011, the NHS and the company entered into an extended advance payment agreement providing for an advance payment of approximately £24m to the company in respect of certain forecasted charges for the company’s fiscal year 2012.

“The extended advance payment agreement acknowledges that the company’s Local Service Provider contract, as varied by the parties in 2010, is subject to ongoing discussions between the parties with the intention of entering into a memorandum of understanding setting out the commercial principles for a further set of updated agreements.

“The company intends to discuss the extended advance payment structure and certain fiscal year 2012 deployment charges with the NHS in connection with the MOU negotiations.

“However, there can be no assurance that the parties will enter into the MOU or that the company’s forecasted charges under the contract for the remainder of fiscal year 2012 will not be materially adversely affected as a result of the delay in completing the MOU and the related contract amendment.”

Meanwhile some investors of CSC have taken legal action against the company.

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Investors sue CSC

By Tony Collins

The Observer reported yesterday that some CSC investors are suing the company, saying it was giving assurances about the “Lorenzo” software when it had been warned that the software project was on a “death march”.

According to the class action complaint, which was brought on behalf of a number of investors led by a major Canadian fund, the Ontario Teachers’ Pension Plan, CSC knew in May 2008, through reports and testing, that Lorenzo was “dysfunctional and undeliverable”.

The complaint cites one member of an internal CSC “delivery assurance review team” which visited the UK and India, where Lorenzo was developed, in early 2008.

He said the team were consistent in the message that CSC could not meet its deadline. “We could not deliver the solution set that we had contracted with the NHS.”

The review team member added that, at the time, “costs were building up on the balance sheet and the project was behind schedule”. The review team knew that the contract was a loser and CSC should have recognised a loss in 2008, according to The Observer, quoting the team member.

Lorenzo’s deputy head of testing told a second delivery review team that test results were “abysmal”. According to court filings, the test official was later told by his boss to “shut up”, which he took to mean he should no longer criticise testing.

Shortly before retiring in April this year, the deputy head of testing emailed CSC chief executive Michael Laphen saying: “The project is on a death march where almost as many defects are being introduced as are being fixed. Look at the defects reports.” Despite these internal concerns, CSC told investors that Lorenzo and CSC’s work for the NHS was on track.

Investors said they dismissed negative media reports on the basis of reassurances from CSC that the NHS work was on track, making significant progres in testing, and receiving positive feedback from the NHS. In response to press coverage, CSC is said to have told investors: “The press speculated wildly and inaccurately on the status of the NHS programme.”

CSC has made no statement.

Lorenzo is the main NPfIT product to be delivered and deployed to NHS trusts by CSC under contracts worth about £3bn. The Cabinet Office and the Department of Health are negotiating with CSC to continue or drop Whitehall’s commitments to CSC Lorenzo deployments.

CSC’s share price today stood at $26.85,  close to a five-year low.

Class action document – Guardian website

Simon Bowers’ article in The Observer

 

 

MP contacts Cabinet Office and No. 10 on future of NPfIT

By Tony Collins

A Conservative MP has sent detailed suggestions to the Cabinet Office and No.10 on what should happen with the NHS contracts, mainly CSC’s.

Richard Bacon, a member of the Public Accounts Committee, has proved to be an important influence in the Parliamentary debate over the future of the NPfIT. He has now sent to the Cabinet Office and Downing Street a recommendation that CSC’s NPfIT contracts should be cancelled and trusts left to buy systems of choice with a small amount of central subsidy.

His email reveals that NHS Connecting for Health, which is a part of the Department of Health that is responsible for delivering the NPfIT, is rehiring contractors and that the arbitration proceedings between the DH and Fujitsu over the supplier’s £700m legal claim are scheduled to continue until the end of next year. He also says that the DH failed to minute all meetings correctly, which could put the Department at a disadvantage in any legal action against CSC.

It’s possible that Bacon’s suggestions on CSC’s contracts will be considered by David Cameron who may be asked to intervene in any disagreement between the Cabinet Office’s Major Projects Authority and the Department of Health.

The DH’s position is clear. The Health Secretary  Andrew Lansley and the NHS’s Chief Executive Sir David Nicholson are on record as expressing support for continuing CSC’s NHS IT contracts, although in a revised form.

The Cabinet Office’s Major Projects Authority under David Pitchford appears not to share the DH’s equanimity over CSC’s contracts. The recommendations of the Major Projects Authority have now gone to Downing Street.

Into the melting pot will go Bacon’s email to Pitchford, copied to No. 10, which is as follows:

Subject: Dealing with NHS IT’s Local Service Providers

“… As discussed, here are some comments on a possible way forward in dealing with Local Service Providers within the National Programme for IT in the NHS.

The LSP contracts have failed to deliver.  Fujitsu has been terminated.   The CSC contract needs to be terminated.  The BT contract has been renegotiated by reducing its delivery requirement by over 50% in return for a reduction in price of less than 10% (though it’s probably not worth terminating this now).

This would leave half of London acute Trusts, all but 11 Trusts in the South, and all Trusts in the North, Midlands and East outside of the Programme.

The simple answer is to have systems of choice for Trusts with small amounts of central subsidy.  Trusts would select and procure whatever system they wanted.  The NHS would make a contribution of, say, £2 million for every acute Trust purchasing a system within, say, 4 years (total cost for 166 Trusts is £332 million).  In return, the Trusts would allow regular reviews of progress and lessons-learned.  This is what the NHS did with primary care over ten years ago and it resulted in virtually all GP Practices computerising over that period.

GETTING OUT OF THE CONTRACTS

All Local Service Providers clearly failed to do what they promised:

All acute Trusts were to have Patient Administration Systems in place by 2006.

All clinical systems were to have been completed at all Trusts by 2010.

Lorenzo was supposed to ship in 2004.

The interim systems were not supposed to happen at all.

The problem is that in a legal dispute over something this complex, lawyers will be able to claim mitigating circumstances of every type and the NHS is likely to end up paying severance, even when terminating for clear non-delivery.  Problems for the NHS include:

CONTRACTS:  The contracts and deliveries are very complex.  It is easy to drown in the detail –  i.e. we couldn’t deliver ‘x’ because of ‘y’.  One could be arguing for ever.

MANAGEMENT:  CfH managed badly.  Records of Correspondence are poor.  Many meetings were not minuted correctly.  Governance was unclear.

PEOPLE:  Lots of different NHS people and contractors worked on the programme and many have since left.  The NHS made CfH fire the majority of its contractors in April 2010.  CfH has been reduced to writing to ex-employees and contractors and asking them if they will come in for interview.

CHANGE:  The NHS has been in constant change with the introduction of major initiatives such as 18 week wait and the current restructuring.  The LSPs will claim ‘moving targets’.

In truth, the LSPs have been paid a lot and delivered little.  The factors above are convenient mitigation for them, but made no difference to whether or not they delivered.  iSoft (now CSC) is supposed to have delivered Lorenzo in every year for the last decade and even claimed to have done so in annual reports when it was a public company.  However, in 2006 a joint report by CSC and Accenture stated that there was “no believable plan” for delivery and in 2011 we still only have one large acute Trust using it.

The Fujitsu case is in arbitration and this is due to run until the end of 2012.  At the end of that period, the waters will have been so muddied that – although they didn’t deliver – it will be obvious that there were many “mitigating” circumstances and the final compromise will end up with the NHS paying half of what Fujitsu is demanding – say £300 million, plus enormous legal fees.

The same scenario will apply to CSC if the NHS tries to terminate them.  CSC’s defence is very well organised.  Morally, the NHS is completely in the right – i.e. there has not been “delivery” – but no matter how clear cut the moral case, it will not be so clear cut legally speaking; the contracts won’t really help the NHS “win” convincingly because it is so complex.  We shouldn’t spend more than a year and a lot more taxpayers’ money fannying around with this.  It will just end up with arbitration followed by some sort of 50 per cent deal plus £100 million to the lawyers. The only way of avoiding this is getting the right people in a room and applying a big stick.  In my view, the only way to terminate is to use the line from the PAC report  i.e. :

You haven’t delivered.  We know that this is so complex and badly documented that we could end up paying you for that non-delivery.  We want to can the arbitration, and save the legal fees and settle.  We are prepared to pay something.  But be aware that the outcome of this settlement and how you behave will have a direct impact on all other business you do now or in the future with the UK government.

The Cabinet Office’s emphasis on a Whole-of-Relationship-with-the-Crown approach to suppliers is vital here.

Avoid being over a barrel by including as part of the settlement a two or three year contract to CSC for the ongoing maintenance of the interim systems already installed (at Acute Trusts and also the others), so that the NHS does not end up in the position that the South ended up in when Fujitsu was terminated (i.e. paying hundreds of millions to maintain a handful of systems). This will give Trusts the time to make and implement alternative plans.

You could take the same approach in order to can the Fujitsu arbitration.”

Will CSC’s £3bn NHS IT contracts be cancelled?

Will CSC’s £3bn NHS IT contract be cancelled?

By Tony Collins

Several people have asked us whether the Cabinet Office’s Major Projects Authority will cancel  CSC’s NPfIT contract or whether draft memorandum of understanding between the Department of Health and the supplier will be finalised and signed.

The position is that a deal with CSC has not yet been agreed – and it’s not clear when it will be. Recommendations from the Cabinet Office’s Major Projects Authority have gone to David Cameron, according to yesterday’s Observer.

We’ve also been asked whether the The Major Projects Authority has any authority over CSC’s NPfIT contracts.

In January Downing Street  gave the Cabinet Office a mandate to “intervene” in projects that are poor value for money, have hit delays or are failing. If there’s a dispute between the Major Projects Authority and a department, the Cabinet Office can ask David Cameron for a decision.  So if the Major Projects Authority wants to cancel the CSC NPfIT contract it can – up to a point.

If the DH doesn’t agree, and it probably wouldn’t, it would be up to Cameron, who would probably back the Cabinet Office’s decision. It would then be the DH that dealt with the consequences.

The Major Projects Authority is under a clear-thinking Australian David Pitchford who is understands what goes wrong with big IT projects and why. He reports to Ian Watmore who also has a good understanding.

These are some of the reasons Pitchford gives for failing government IT-based projects:

1.Political pressure
2. No business case
3. No agreed budget
4. 80% of projects launched before 1,2 & 3 have been resolved
5. Sole solution approach
6. No timescale
7. No defined benefits

Most of these apply to the NPfIT.

One view about what should happen is that at least the part of the CSC contract that relates to acute hospitals should be cancelled, and the NHS should be under no further contractual obligation to buy from CSC – that was always an artificial device. CSC should be under no further obligation to deliver to the NHS.

CSC’s obligation has been a means of Whitehall, through CSC, maintaining some control over trusts and justifying a large central team. End that obligation and you don’t need a large central team. Last week’s Public Accounts Committee report on the NPfIT detailed care records systems said that NHS CfH has 1,300 people.

Whatever happens CSC will maintain a strong  presence in the NHS, at least through its purchase of iSoft. Many trusts with iSoft systems are likely to replace them with iSoft – CSC – products. Patient administration systems are huge investments and changing them can be risky.

EC procurement rules mean that trusts will need to go open tender when their existing contracts expire but some will find ways of awarding new contracts to existing suppliers, if that’s their wish.

So CSC’s future in the NHS is assured, whatever happens with its NPfIT contracts.

Fujitsu denies Whitehall claim over NHS IT work

By Tony Collins

The Department of Health has suggested in a memo to MPs that Fujitsu, after having its NPfIT contract terminated, sought to improve its financial position by doubling service charges and threatening to turn off systems if it was not paid.

Fujitsu has denied the accusations, describing them as “wholly untrue”. It says that “as a trusted supplier of services to many Government departments Fujitsu would never countenance adopting such a position”.

The Department of Health’s claim was in the context of its legal action with Fujitsu after the supplier’s NPfIT contract was terminated in 2008.

In a memo published today in a report of the Public Accounts Committee on the NPfIT detailed care records systems, the DH responds to a question by MP Richard Bacon on what the maximum costs would be if contracts with the two remaining local service providers CSC and BT were to be cancelled.

The DH sets out some of the possible costs including those associated with providing ongoing services after the contract is terminated. Says the DH memo:

“It is likely that suppliers will seek to increase these ongoing costs in an attempt to improve their financial position (Fujitsu, for example, doubled the service charges claiming they would turn the systems off unless we paid).”

But the DH provides no evidence of its claim, and the Committee in its report today casts doubt on the credibility of some DH statements related to the NPfIT.

In a statement Fujitsu said:

“If the suggestion is that that Fujitsu threatened to  turn off its systems unless the Department of Health agreed to a doubling of charges that is wholly untrue. As a trusted supplier of services to many Government departments Fujitsu would never countenance adopting such a position.

“After Fujitsu’s contract terminated Fujitsu continued to provide significant services ( Care Records and PACS / RIS) to a large number of Trusts whilst a replacement temporary contract was negotiated.

“The temporary contract was required to cover the period up to transfer of the services to alternative suppliers. Fujitsu supported this activity for six weeks after termination at its own risk, without a contract and any security of payment.

“Had Fujitsu not done so this the risks to the NHS would have been significant. Far from taking advantage, Fujitsu acted very responsibly and properly in safeguarding the ongoing provision of services to end users.

“Fujitsu’s charges for continuing to provide services were based upon the charging principles set out in it original contract. This was confirmed by the Department’s own audit.”

DH puts case against cancelling NPfIT contracts

BT slammed over NHS value for money claim.

DH puts case against cancelling NPfIT contracts

By Tony Collins

The Department of Health has put a detailed case to MPs for not cancelling £4bn worth of NPfIT contracts with local service providers CSC and BT.

Among the points the DH makes is that “the NHS cannot continue without replacing the systems now covered by these contracts” – which refers to the NPfIT contracts with BT and CSC.

The DH also says that CSC and BT “have been clear that they are not willing simply to talk away”. Legal advice to the DH is of a “significant” risk that BT and CSC may, if their contracts are ended, work with Fujitsu in a unified legal action against the Department. Fujitsu and the DH are in a protracted legal dispute after the Department terminated Fujitsu’s NPfIT contract in 2008.

The Department’s memo to the Public Accounts Committee is published today in the PAC’s report entitled “The  National Programme for IT in the NHS: an update on the delivery of detailed care records systems”.

The report is highly critical of all the main parties to the NPfIT including:

– CSC which the report says has delivered only 10 of 166 of its ‘Lorenzo’ systems in the North, Midland and East. The PAC report calls on the Government to give “serious consideration to whether CSC has proved itself fit to tender for other Government work”.

– BT, the other main supplier to the NPfIT, which has “proved unable to deliver against its original contract”, says the report.

– Sir David Nicholson, the Chief Executive of the NHS who is senior responsible owner of the NPfIT, who is criticised by name. It’s rare for the committee’s MPs to personalise their criticism. It says there has been “weak programme management”  and adds: “We are concerned that, given his significant other responsibilities, David Nicholson has not fully discharged his responsibilities as the Senior Responsible Owner for this project. This has resulted in poor accountability for project performance…”

– The Department of Health and NHS Connecting for Health which cannot be trusted to give reliable or complete information on the NPfIT, even to government auditors.  The report says: “Basic information provided by the Department to the National Audit Office was late, inconsistent and contradictory… This occurred despite the fact that Connecting for Health, the NHS organisation responsible for managing the Programme nationally, has 1,300 staff and has spent £820m on central programme management.”

– The Department of Health over its poor ability to re-negotiate contracts with BT and CSC. The report says that the Department ended up “clearly overpaying BT to implement systems …BT is paid £9m to implement [RiO] systems at each NHS site, even though the same systems have been purchased for under £2m by NHS organisations outside the Programme.”  This “casts the Department’s negotiating capability in a very poor light”. The report adds: “We are worried that the Department will fare no better in its current negotiations with CSC …”

– The Department of Health for leaving NHS trusts in a mist of uncertainties. Trusts with NPfIT systems will not know the costs of supporting them after the BT and CSC contracts expire in 2014/15. It’s also uncertain how individual trusts will manage CSC and BT NPfIT contracts when the supplier agreements are held by the Secretary of State for Health.

– The Department of Health for leaving CSC in a controlling position to supply trusts with upgraded interim iSoft systems that were not part of the original contract. Says the PAC report: “It is important that CSC, particularly given its proposed purchase of iSoft, does not acquire an effective monopoly in the provision of care records systems in the North, Eastern and Midland clusters.

“This could result in the Lorenzo system effectively being dropped as the system of choice and many Trusts being left with little choice but to continue with out-dated interim systems that could be very expensive to maintain and to upgrade, or to accept a system of CSC’s choice.

“CSC should not be given minimum quantity guarantees or a licence to sell a product other than that procured and selected by the Programme within the Local Service Provider contract.”

But in its memo to the Committee the Department is unrepentant. Indeed the self-justifying detail and tone of the DH memos, which include selective, apparently corroborating quotations from a KPMG consultancy report that the Department has never published, suggest that, while the NPfIT has changed, the zeal with which DH officials defend the scheme, whatever its problems, has changed little since the programme was announced in 2002.

The DH’s case for not cancelling the contracts with CSC and BT was prompted by a written question from Richard Bacon, a Conservative MP and long-standing member of the Public Accounts Committee who has taken a close interest in the NPfIT.

Bacon asked:

What are the maximum payments to which NPFIT would be exposed for contract cancellation of the detailed care records systems, for each of the LSP providers [CSC and BT]?

The DH said that if the contracts were cancelled for convenience the maximum payments could be [DH italics] in excess of the currently anticipated costs to complete the BT and CSC contracts. If the DH were to cancel contracts for acute hospitals only, the maximum payments may reduce by 50%, said the DH.

The DH adds:

“These costs do not include the deployment or operational costs of any new systems that the NHS would need to procure. The NHS cannot continue without replacing the systems now covered by these contracts.”

Cancellation costs 

Cancellation costs could involve, said the DH:

– Contractual costs: The minimum amount the supplier is allowed to receive under the contract.

– Damages This would include covering some of the suppliers’ unrecovered costs to date and pre-accrued claims at the point of termination

– The costs of providing the ongoing services after termination. It is likely that suppliers will seek to increase these ongoing costs in an attempt to improve their financial position. The Department claims that Fujitsu increased its service charges and claimed it would turn systems off if outstanding sums were not paid.

– Costs of replacing systems, plus support and development of live services.

– Legal and professional fees for terminating, transferring work and investigating the facts around termination.

But the DH makes no mention that the Department would have a strong negotiating position if contracts were terminated because any dispute could cause the Cabinet Office to lose confidence in that supplier, which may affect the ability of the company to win further government work.

Would any major supplier want to fall out with government as a whole, rather than just one department?

Coalition changes mean that government considers itself as a single customer when reviewing the reputation and credibility of individual suppliers.

MPs don’t trust the DH’s information

Many of the points made by the DH in 15 pages of memos appear to have been largely discounted by the committee, partly because MPs did not trust what the Department said.

Comment

The Department of Health has a history of quoting selectively from consultancy and legal reports to support the argument it is making.  This is what tabloids do at times. Indeed the DH  never publishes the consultancy and legal reports it quotes from, so should we trust its arguments that point to keeping the NPfIT contracts with CSC and BT?

There may be good arguments for cancelling the contracts that have not, and are unlikely to be, mentioned by the DH.

Some benefits of cancelling NPfIT contracts

Cancelling could end the uncertainties for trusts that would otherwise be pressured to take NPfIT systems. It could also end the uncertainties for trusts that have yet to buy NPfIT systems and may face punishing costs to keep them running, and in step  with changes within the NHS, after the contracts with BT and CSC expire in 2014-2015.

If Campaign4Change were advising the coalition we would suggest it commission a genuinely independent review of the pros and cons of cancelling the NPfIT contracts.  The review  should not be commissioned by the DH or Connecting for Health because their lawyers and consultants will tend to tell the department what they think it  wants to hear.

One of the messages that comes loud and clear from today’s report of the Public Accounts Committee is that the DH cannot be trusted to make the right decisions on behalf of taxpayers and the NHS. The DH cannot even be trusted to tell the truth to judge from the PAC report.

The Cabinet Office needs to take control of major DH IT spending. Perhaps the sooner the better.

Public Accounts Committee report on NPfIT detailed care records systems.

NHS must consider scrapping NPfIT – MPs.

Chinook crash – the 16-year campaign to right an injustice

By Tony Collins

Chinook ZD576

The day after the fatal crash of Chinook ZD576 on the Mull of Kintyre an RAF Board of Inquiry convened.

There was little to go on: what could be retrieved from the fire at the crash site, and records of recent trouble with the aircraft type, including difficulties with the Chinook Mk2’s software-controlled “Fadec” system.

There had been so much trouble with the Fadec, in fact, that test pilots had ceased flying the Mk2 the previous day. But operational flights continued.

The crash of ZD576 left no survivors: all 29 on board were killed. There was no cockpit voice recorder. No flight data recorder. Particularly for John Cook, the father of one of the pilots, the absence of black boxes compounded his grief.

While a Concorde pilot for British Airways, John Cook led successful negotiations with the Air Accidents Investigation Branch for the installation of cockpit voice recorders on large passenger aircraft.

He recognised the importance of flight data and cockpit voice recorders to investigators and the families of dead pilots because they could show how an aircraft was performing in the moments before it crashed. A cockpit voice recorder could record audible warnings, pilots expressing concern about a possible malfunction and any unusual noises.

Without black boxes it would be easy to blame dead pilots for a major, fatal accident.

Said John Cook in 1999: “I fought to have the recorders installed and then I lost a son in an aircraft which didn’t have one.”

The campaign begins

In crashes of civil airliners the data from the black boxes often gives the best clues as to the likely cause or causes. Even when the black box data is fully recovered the likely causes of an accident can elude investigators.

So how could anyone know what happened in the moments before the crash of ZD576? In 1995, nearly a year after the accident, the RAF Board of Inquiry produced its findings.

The campaign to restore the reputations of the two pilots of ZD576, Flight Lieutenants Jonathan Tapper and Rick Cook, began.

MoD  and RAF attack their own software experts

In some ways the investigation into the crash was exhaustive. In other ways it was limited. It reflected the mindset of the RAF at the time, which was that Chinooks were needed desperately, and, if possible, in greater numbers. The last thing the RAF hierarchy needed was credibility being given to the internal concerns about the helicopter’s Fadec system, in which software controlled fuel to the Chinook’s two jet engines.

Days after the crash on the Mull of Kintyre in June 1994, a senior RAF officer expressed his frustration at the internal concerns over the Fadec.

In a signed, draft memo, the RAF officer attacked the MoD’s own software experts at Boscombe Down. He said their “ongoing stance towards the Mk2 contrasts sharply with the considerable efforts being made by the front line to bring the aircraft into service and maintain a capability”.

Boscombe Down’s attitude, he said, “does nothing to engender aircrew confidence in the aircraft”.

It was beginning to look as if the RAF would not tolerate an investigation that concentrated too much on the integrity of the helicopter and its software. But, to its credit, the RAF brought in the civil Air Accidents Investigation Branch.

The AAIB did not have a free hand, however. The limits of its investigation were agreed with the RAF. The AAIB could not simply require all relevant documents. It was up to the MoD and RAF what documents it showed the AAIB.

And the MoD supplied the bare minimum.

Documents not shown to investigators

Many potentially-relevant documents were to emerge years later, long after the RAF Board of Inquiry had been disbanded. The documents came to light, in part, because of leaks by well-intentioned insiders who were concerned that possible flaws in the airworthiness of the Mk2 were being overlooked.

Back in 1994, the AAIB’s chief investigator Tony Cable knew there had been problems with the Fadec, none of which the RAF hierarchy regarded as serious. Among the many things Cable wasn’t told was that the Superintendent of Engineering Systems at the MoD, Boscombe Down had, nine months before the crash, found flaws in the Fadec that he said in an internal memo were “positively dangerous”.

And Cable didn’t know at the time of his investigation that the MoD was suing the Fadec suppliers because of faults in the system’s software that were exposed by a ground test of a Chinook at Wilmington in the US, Boeing’s “Center of Excellence”.

When the Fadec was working properly, which was most of the time, it made the job of Chinook pilots easier: they could fly the helicopter without controlling power to the engines. When the Fadec systems were not working properly they were apt to leave no trace of a fault, and could endanger the lives of all on board, said Squadron Leader Robert Burke who, at the time of the crash, was one of the most experienced Chinook Mk2 unit test pilots.

A near-catastrophe that left no trace

Four years after the crash of ZD576, Bric Lewis, the pilot of a US Chinook, exclaimed involuntarily “Oh God” into the microphone of his headset. His words were transmitted to all on board. His Chinook was falling out of the sky … upside down.

The displays in the cockpit showed no warning lights… no evidence of any technical malfunction. Then, as inexplicably as the Chinook had turned over, it flipped back again, into a normal, wheels-down position. After it landed safely no serious fault was found.

Bric Lewis and his crew lived to provide evidence that their Chinook had turned over. If they had died in the incident, would they have been blamed on the basis that no serious malfunction capable of causing the crash had been found?

An extraordinary campaign

That the campaign to clear the names of Cook and Tapper has succeeded is extraordinary, and yet it’s not in the least extraordinary. It has been a campaign characterised by its intensity, perseverance, and the status and number of those involved.

It has been a campaign that pivoted on the tenacity of the families of the two pilots and their pro bono advisers. Some of the campaigners cannot be named.

MoD spin

The campaign has also been marked by the determination of the MoD and RAF hierarchy not to attach any credibility or relevance to newly-disclosed information.

In the words of then independent MP Martin Bell in 2001: “The MoD is being anything but straightforward… clearly civil servants are trying to spin the facts to suit the air marshals’ agenda.”

With a manipulative use of language, and an evasive but self-confident way of answering of difficult questions – sophistry exemplified – the MoD was a decisive influence on defence ministers of the last administration.

Every defence minister in the last government was persuaded that there could be only one cause of the accident, and that was pilot error. Tony Blair wrote in his own hand that the pilots were to blame.

So how did one of most grievous military miscarriages of justice in the last 100 years come to be corrected? It was thanks, in part, to the injustice’s enduring visibility in Parliament and in the media, such that David Cameron, when in opposition, promised, if elected, to launch a formal review of the decision to blame the pilots.

And only a prime minister or his defence secretary could, in effect, take the steps necessary to overturn the judgement of a properly-constituted RAF Board of Inquiry. In ordering the Philip review, Cameron proved as good his word.

Liam Fox, too, unlike defence secretaries in the last government, has shown by his actions that he is not prepared to be putty in the hands of his civil servants and RAF air marshals. All credit also to Nick Clegg for his support of the Philip review.

Did the RAF try to dissuade Cameron from holding a review?

It’s unclear whether the RAF tried to discourage Cameron from setting up a review. What is not in doubt is that, in January 2010, a few months before the general election, four former chiefs of the air staff, and a former RAF Chief Engineer, wrote to the Daily Telegraph saying they would wish to brief ministers if there were to be “yet another” review of the RAF’s decision to blame the pilots for the crash of Chinook ZD576.

In their letter, Sir Michael Graydon, Sir Richard Johns, Sir Peter Squire, Sir Glenn Torpy, and Sir Michael Alcock said the finding of gross negligence against the pilots of ZD576 was “inescapable”.

“We understand that in the event of a Conservative administration coming to power it will revisit the Mull of Kintyre Chinook accident and consider the negligence finding,” said the letter of the five knights. “Each one of us has reviewed separately the findings of the Board of Inquiry and reached the same conclusion, namely that basic airmanship failings caused this tragic accident.

“If yet another review is to take place then we would welcome an opportunity to brief ministers and discuss in necessary detail why this finding remains inescapable. In particular, it will be explained precisely why it cannot be overturned by recourse to a hypothesis for which there is no evidence and which is revealed as wholly implausible when tested against the known facts.”

Sir Michael Graydon
Chief of the Air Staff 1992-1997
Sir Richard Johns
Chief of the Air Staff 1997-2000
Sir Peter Squire
Chief of the Air Staff 2000-2003
Sir Glenn Torpy
Chief of the Air Staff 2006-2009
Sir Michael Alcock
Chief Engineer (RAF) 1994-1999
London W1

It is likely that the Philip review came under pressure from the MoD and the RAF not to question the finding of gross negligence. The fact remains, though, that nobody knows the cause of the crash. It could have been pilot error. It could have been a chain of events that had little or nothing to do with pilot error. Indeed the AAIB investigation of equipment recovered from the wreckage revealed several anomalies that were never explained.

That said Tony Cable noted that there was little evidence to be gleaned from the investigation. Cable told a House of Lords select committee on 7 November 2001: “Throughout this investigation the evidence was remarkably thin, from my point of view, I must say”.

What could have caused the crash?

There were many potential causes of the loss of ZD576. What can be said with certainty is that we don’t know why it happened, or the events that preceded it.

One of the lessons is that “evidence” from aircraft manufacturers and their subcontractors should be treated with the same scepticism as speculation about the actions of the pilots. After the crash of ZD576, the main attention of the RAF and the MoD was on the possible actions of the pilots, not on the possible behaviour of the aircraft.

Nobody in the RAF hierarchy questioned the fact that most of the allegations against the pilots were made on the basis of manufacturers’ “evidence”. If that evidence is set aside as lacking impartiality, and indeed the AAIB does not confirm the accuracy of that evidence, there is no basis even for speculation about the actions of the pilots.

One of the things the campaign for justice has shown is that the RAF hierarchy took a circumscribed investigation of equipment found in the wreckage as the basis for a case against the pilots.

Black boxes found in the debris of civil airliners are sometimes transported under armed guard to independent investigators. Manufacturers are not always allowed to look at their equipment until it has been studied independently. Yet in the case of ZD576 manufacturers’ evidence has been taken as the whole truth. An Mod lawyer at the ZD576 Fatal Accident Inquiry in Scotland in 1996 sought to persuade the Sheriff that the manufacturer’s evidence was “hard fact”.

To my knowledge there has never been an investigation by the National Transportation Safety Board, the US equivalent of the AAIB, in which uncorroborated, unchecked evidence from aircraft manufacturers been taken as hard fact.

Today, the lack of understanding at the top of the RAF over how much information is needed after crashes of civil airliners to establish the likely chain of events may help to explain why air marshals still blame the pilots of ZD576.

In their eyes, the lack of evidence of serious technical malfunction appears to mean that the pilots were in control of the aircraft. Such a simplistic assumption would not be made in a full civil aircraft crash investigation.

Justice has now prevailed thanks to the Cameron government, supported by Sir Menzies “Ming” Campbell, Martin O’Neill, and numerous other parliamentarians including Lord ChalfontJames ArbuthnotDavid Davis and Frank Field . There are too many other campaigners to name, though I make exceptions with Hooman Bassirian, Karl Schneider and Mike Simons who, at Computer Weekly, were willing to shape and publish innumerable stories in support of the Chinook campaign. David Harrison, a freelance producer  at Channel 4  News, which has covered developments since the day of the crash, first alerted me to the flaws in the Chinook Mk2’s Fadec.  Most of the documents relevant to the crash came to me from the Tapper family.

Air marshals will never accept that the pilots were not to blame. But that’s a hallmark of institutional disasters: once a decision is taken on the main cause that decision will be supported and stuck to whatever the facts. Thank goodness the Philip review, when it came to its investigation, had an open mind.

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The campaign for justice for the pilots of Chinook ZD576 – Brian Dixon’s website

PPrune – hundreds of online pages of thoughtful discussion on the crash.

RAF Justice – how the RAF covered up problems with the Chinook Mk2’s Fadec.

Chinook ZD576 – report by Michael Powers QC.

Macdonald report on the crash of ZD576 – by three fellows of the Royal Aeronautical Society.

Flawed Chinook software updated after crash of ZD576.

The Chinook Fadec in-depth – by Malcolm Perks, another of the campaigners

FireControl – should PA Consulting share some responsibility for what happened?

By Tony Collins

The defence and aerospace supplier EADS is widely regarded as the main supplier of the FireControl project which was cancelled in December 2010, with wasted costs of at least £469m.

But did the project have too many consultants, some of whom were  accountability-free? The question is raised by report published today on FireControl by the National Audit Office.

Says the report:

 “The implementation of FiReControl was heavily reliant on consultants and interim staff, who contributed around half the Department’s [for Communities and Local Government] project team at a cost of £68.6m, over three-quarters of the total spend on the national team supporting the project.

“PA Consulting was contracted to provide consultancy services at a cost of £42m to the end of March 2011. Its staff held key positions throughout the project, including the Project Manager, one of only two senior members of the team who remained on the project throughout its duration.

“Despite the Department’s reliance on consultants, there was no framework to assess their performance until the end of 2008, when the National Audit Office recommended that the Department’s contracts with consultants should include mechanisms to enable regular objective monitoring of performance, such as performance indicators and key milestones.

“Without such mechanisms, the Department was unable to determine whether or not the services provided offered value for money.

“A review of the FiReControl project by the Office of Government Commerce in 2008 similarly found that some consultants in key management roles did not have a level of authority matching their responsibilities, which led to decisions being referred to others.

“Other consultants were found to hold a disproportionate (and accountability-free) amount of authority. In response, the Department reviewed its use of consultants and interims within FiReControl and reduced the number employed, leading to a fall of 24% in consultancy costs between 2008-09 and 2009-10, and a further fall of 26 per cent in the following year.”

The failure of the FireControl project – and many other central government IT-based programmes dating back decades – shows the need for independent challenge as projects progress or otherwise.

Gateway reviews are independent reports on the state of a project but they appear to be ignored if they’re too critical, as in the cases of FireControl and the Rural Payments Agency’s Single Payment Scheme; and the Gateway review reports are secret – even today – so there is no outside pressure on departments to act on them.

What’s to be welcomed is the intervention of the Cabinet Office in major projects. FireControl systems could have been delivered. They could have worked. But there were too many missed deadlines and continuing uncertainties, as the NAO points out in today’s report.

The Cabinet Office’s major Projects Review Group, as it was then, said the FireControl contract should be ended – and it was a few months later, amicably, in December 2010.

All credit to the NAO for naming PA Consulting, as well as the main supplier EADS.

NAO report on FireControl.

What FireControl and NPfIT have in common.

FireControl disaster blasted by unions