CSC dodges a bullet with its U.K. settlement
Computer Sciences Corp.'s new CEO Michael Lawrie apparently is delivering on some early promises to right the ship.
The company has settled its dispute with the U.K. National Health Service that had been dragging down the company’s financial performance for several years.
The settlement, which includes a payment of $108 million to CSC, includes both sides dropping claims they had against each other.
The troubled contract has been marked by delays, poor performance and cost overruns as CSC was trying to execute a $3.7 billion contract to provide health IT services in the north west and west midlands regions of the country. The U.K. government nearly canceled the contract last year.
The settlement pays CSC for services to date and continues the contract through 2016. However, it does release certain U.K. regional health trusts from having to buy CSC’s Lorenzo health systems. They can now choose their own systems.
The settlement has to be a feather in Lawrie’s cap. The project was cited by Standards and Poor’s last May when it lowered CSC’s credit rating.
The contract also contributed to a $4.2 billion loss from continuing operations.
Lawrie came on board at CSC in March and quickly said the company was in need of a turnaround. One of his goals was to renegotiate poor performing contracts.
It looks like he has a big win under his belt.
Posted by Nick Wakeman on Sep 04, 2012 at 9:52 AM