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Repeat of PPARS feared as iSoft fails to provide bond
John Mulligan



A UK company contracted to develop a major 56m computerised patient record system for Irish hospitals has failed to provide a critical insurance bond to the Health Services Executive (HSE) that would ensure the controversial project will be completed if the company goes bust.

The revelation has infuriated opposition parties who claim the government has learned nothing from last year's extraordinarily expensive PPARS payroll debacle.

Last week troubled IT firm iSoft confirmed that it has breached two contract clauses with the HSE. One of those was that if its net assets fell below 75m it would have to provide a letter of credit to the HSE and maintain professional indemnity insurance cover that would effectively guarantee the project's completion in case iSoft went out of business or was otherwise unable to fulfil its obligations. iSoft admitted that its net assets have now fallen below that critical threshold but that it cannot afford to pay for the insurance cover as it is currently too expensive.

Opposition parties expressed disbelief last week that iSoft has been unable to provide guarantees."This is in direct conflict with what the Minister [for health and children, Mary Harney] said in the Dail when this matter was raised, " said Labour's deputy leader and spokeswoman for health, Liz McManus.

"This guarantee was central to the contract and this shows that the lessons from PPARS just haven't been learned. It's another example of government incompetence."

iSoft added that it also breached a further contract clause with the HSE, that it would make available certain software functionality. The company said that it will now not be able to provide that functionality within the contracted timeframe.

The latest twist in the project comes hot on the heels of the debacle of the so-called PPARS payroll system. To date, that has cost 186m. Its implementation was suspended in October last year.

A subsequent investigation by the Comptroller and Auditor General's office was highly critical of the project, saying that it was poorly specified and badly managed during its seven-year implementation phase. It also said that the health board executives in charge of the project lacked the expertise and authority to implement the system.

Fine Gael's spokesman for health, Liam Twomey, claimed that the contract breaches expose "yet again" the lack of over-arching control and foresight in healthrelated IT projects.

The HSE said that it is aware of the contract breaches and that it is involved in negotiations with iSoft regarding software delivery for future phases of the project.

iSoft almost collapsed earlier this year after it was forced to restate its accounts.

It is currently looking for a buyer for the firm.




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