Computer Sciences Corporation (CSC) has reported to the U.S. Securities and Exchange Commission that it may need to write off 1.13 billion euros (943 million pounds) related to its work in providing information technology services to the U.K. National Health Service.
CSC is one of several companies that has provided services under the U.K.'s massive National Programme for IT, which aims to create a centralized medical records system throughout the country. The scheme has been plagued by delays and controversy, and CSC disclosed last year that it was in discussions with the U.K. government on the best way to proceed with the project.
However, the company stated in a Form 8-K dated December 27 that it was recently informed that the U.K. government would not approve a memo of understanding or an amended contract to provide future healthcare IT services in the project. If no agreement was reached, CSC stated that it would be required to write off its investment in the project, which it estimated at 1.13 billion euros.
The potential write-off, which could be even greater than the amount stated, would probably take place during the third quarter of fiscal year 2012.
CSC developed the Lorenzo electronic health record software, which, according to a prior contract, was supposed to have been in use in more than half of U.K. hospitals more than four years ago. Its first acute care hospital installation was implemented in June 2011.
British Cabinet Office Minister Francis Maude and the Department of Health have been deliberating on whether to continue with CSC or risk having it join Fujitsu, another NHS IT contractor, in protracted legal disputes over the project, the Guardian reported on December 28.
