NHS Supply Chain Technology Contract – And The Winner Is …

We’ve written a lot over the past year or two about the new National Health Service “Future Operating Model” (FOM), the central procurement and supply chain structure that will lead on 11 common spend categories across the NHS.  The providers to run the towers were announced a while back, and now the contract for the technology within the new structure has been awarded, a little behind schedule.

And the lucky winner is … DXC Technology. DXC was created by the merger in April 2017 between CSC, which has a track record in the NHS, not all of it good (going back to the NPfIT fiasco of the early noughties) and the Enterprise Services division of Hewlett Packard.  DXC provides the “Lorenzo” patient care system to many hospitals, but it has a mixed reputation, it is fair to say.

We are told that the firm provides some of the technology used currently by DHL in the NHS Supply Chain operation, so our expert says “this is as close to an incumbent win as you could get in this situation”.  But not doubt Supply Chain Co-ordination Limited (SSCL, or what used to be known as the ICC – intelligent client co-ordinator), the body that is responsible for pulling the whole new system together, will want to see improvements from DXC.

That’s because this is an important contract – it should underpin the FOM and provide technology transformation to support the brave new world of NHS procurement.  The Department of Health and Social Care said: “The supporting technology and IT Infrastructure service is an enabling function that will form part of the infrastructure to support the NHS to generate savings of £2.4bn over seven years through the new Supply Chain operation.”

It is thought that the contract is worth some £250 million over the six years of the contract. The  Department also said that services “will include; the management, support and maintenance of the internal IT systems infrastructure, hardware and software applications across the business as well undertaking a significant programme of IT modernisation and transformation to support the evolution and growth of the service.”

While this is not a huge contract by the standards of government procurement across the board, it has that strategic importance as it is essential for the wider FOM to work well. The 11 category towers across a wide range of products will rely on technology to make sure the goods actually get to where they are needed on time and that all the administration around the process works well. One can imagine that an IT failure, or just clunky or inefficient processes, could put the success of the whole initiative in jeopardy; so this is a critical contract.

However, given the track record of government and NHS major IT projects, there will inevitably be some nervousness as implementation proceeds. We wish DXC every success – but watch this space!

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Voices (5)

  1. NHS Buyer:

    You’re quite right Peter.
    “…this is an important contract – it should underpin the FOM and provide technology transformation to support the brave new world of NHS procurement.”
    So, it is a little odd that the costs of the ICC (SCCL) will actually climb to around £260m per annum instead of being ‘transformed’ and the NHS seeing a reduction in the current circa £160m pa. With the onset of AI, automation etc you’d think other resource costs would tumble. And I’m sure you have seen numerous procurement teams become quite efficient over the years through the deployment of technology.
    Perhaps each member of the huge ‘man-marking’ team needs an iPad, iPhone, along with rose-tinted Google Glasses.

    1. Bill Atthetill:

      And haven’t they taken Transactional Services back in-house? One would have thought that there’s a mature market incorporating numerous players who would automate that whole piece, but they’ve chosen to bring a [large] team back into public sector ownership? This is all going backwards, surely.

    2. Rasputin:

      Copied and pasted from the comments section of Peter’s HCSA article.

      The £70m extra cost being top sliced via tariff isn’t going down very well with some CFO’s, expect a bit of a stand off with Dh.
      It wouldn’t surprise me if we ended up with the Treasury funding the ‘additional costs’ and Trusts paying back a share of the savings when they were delivered, a sort of benefits sharing model.

  2. Sam Unkim:

    Watch this space
    Perhaps this is a good time to draw a line in the sand and state that, up to this point in time there have thankfully been precious few occasions, where patients and procedures have ever been impacted by a lack of product immediately available to clinicians. This includes coping with demand surges like viruses(Bio), bombings, fires & train crashes.

    That’s down to the work of hospital embedded supplies teams and the staff of NHS Supply Chain.

  3. Watch with interest...:

    DXC (supported by PwC) are to be congratulated, however the systems and IT ARE presently highly clunky .. their prime development task will be to replace the core 30+ year old ERP system (a task DHL shied away from doing). Given the increased number of operational stakeholders in the FOM this will be even more difficult. Good luck!

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