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CSC and NHS miss deadline.

Department of Health

London: CSC warned investors this week that so far it has failed to come to an agreement with the UK's National Health Service over its patient administration system, Lorenzo.

In a statement on Wednesday it confirmed that it has been in discussions with the NHS "on the way forward to redefining the contractual relationship between CSC and the NHS."

As we reported last month CSC and the NHS had entered into a non-binding letter of intent as a result of these talks, setting out a reduction in the scope and volume of the NHS' planned deployment of Lorenzo. The letter said the agreement was to be finalised before the end of that month, but with no agreement by the end of March, any deal is in effect on hold until at least the beginning of June.

CSC said this week, "The parties intended to conclude a binding interim agreement by March 31, 2012. Progress continues; however, discussions on the interim agreement have not yet concluded and are still ongoing at this time. The previously disclosed Lorenzo-related standstill agreement remains in effect through June 1, 2012.

"There can be no assurance that CSC and the NHS will enter into the interim agreement."

In a conference call to investors yesterday CSC's president of global healthcare, Guy Hains, argued that talks with the NHS were going well, and that the delay "reflects the complexity of change" under negotiation.

Hains added that major changes to the structure of the NHS, arising from the Health and Social Care Act, were complicating matters.

Last month CSC said it hoped to salvage up to $1 billion of its compromised electronic health records work with the UK's Department of Health.

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