Mary Harney (Dublin Mid West, Progressive Democrats)

The Health Service Executive has confirmed the position in relation to the company in question to be as follows. The company is a major supplier of information technology systems to the health services in Ireland, the UK and several other countries. Financial difficulties at the company, combined with changes at senior management level and staff lay-offs in the UK have been widely reported during the course of this year. Although the company's latest financial results for the year ended April 2006 reported a significant net loss, it made an operating profit on revenues for the year. The net loss was primarily attributable to a substantial goodwill impairment charge associated with the goodwill valuation attributed to a company it merged with three years ago.

The company's difficulties in the UK have not impacted on services to Irish customers. The company has met its contractual obligations to the HSE and has advised that it will continue to do so. The company supports many IT systems that have been in place for years in various hospitals in Ireland.

The HSE awarded the national contract for new hospital systems to the company in 2005. The total ten-year value of the contract is €56 million plus VAT. Under this contract, phase one of the roll-out of the company's existing hospital software, which will meet HSE requirements for the short to medium term, is under way. The system has been successfully deployed in Cork and Kerry and is expected to be implemented in hospitals in the north west and north east over the next few months. A total of €11.6 million, including VAT, has been paid to date.

The national contract also entitles the HSE to deploy the new software that the company will develop over the coming years. Further engagement with the company is planned in the near future to determine the implications for the HSE of the company's revised software development programme arising from the difficulties the company has experienced in the UK.

The HSE is confident that the contract protects its position appropriately against poor performance and non-delivery of software and services. The contract was prepared by the HSE's legal advisers and explicit provision was made to protect the HSE against a series of eventualities. Payments to the company under the contract are dependent upon the receipt of identified deliverables. The contract also provides for financial remedies in the form of payments to the HSE to deal with possible problems with quality, performance and-or availability of software or with the quality, responsiveness and availability of support services.

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