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By Andy McCue, 30 September 2003 12:43

NEWS The timetable for the £2.3bn NHS IT modernisation programme has been hit by a delay because of the complexity of negotiations between the government and suppliers over the tough contract terms. Bidders for some of the first regional contracts in the integrated patient record scheme to be awarded have now been told the deadline for final offers has moved back to 24 October from 7 October, and the contract award date has slipped from 31 October to 21 November, according to the FT. But a spokesman for the National Programme for IT (NPfIT) in the NHS told silicon.com shifting the timetable was due to the need to "strike a balance" between all the parties in overlapping negotiations and that the extra time will mean a better deal for the NHS and taxpayers. "We remain confident that we have terms and conditions on which, after negotiations, bidders can make best and final offers that will reflect a fair distribution of risk and reward between the NHS and successful bidders," he said. Last month US company Lockheed Martin withdrew from the bidding amid rumours it was not prepared to accept the overly-harsh performance penalties in the contract, although other sources suggested Lockheed was making a diplomatic retreat to concentrate its resources on the £4bn MoD contract. The delay will nevertheless be a blow to NHS IT director general Richard Granger, who is tasked with pushing the programme through at an incredible pace because of its importance as one of the Labour Party's key re-election policies. Richard Holway, industry analyst at Ovum Holway, said in a statement that the US bidders are having trouble getting their stateside bosses to buy into such tough contract terms. "Those that are still holding out for acceptable terms fear that a maverick will agree something crazy just to get the contracts. If that happens, another public sector IT disaster is inevitable down the line," he said. "Granger’s greatest fear must be that everyone pulls out. But no sensible company is going to accept liability for things that are not within their control - particularly where penalties could be twice the contract price."