10 April 2003 | Robin Parker
The NHS has salvaged a five-year contract to maintain vital equipment by tying the supplier to a national deal four times as big as originally planned when talks broke down last year.
The NHS Purchasing and Supply Agency (Pasa) has forced GE Medical Systems not to seek any deals with individual NHS trusts as part of the national consortium deal.
It covers the maintenance of imaging equipment and is worth up to £15 million a year - almost four times the previous planned deal because of the expected increase in take-up.
Pasa expects more than 300 trusts to sign up to the central contract, which it says will be up to £700,000 cheaper a year than if they signed their own deals.
Pasa's failure last year to renew the contract, then worth £4 million and expected to help more than 70 trusts, forced trusts to negotiate their own deals with GE weeks before the agreement was due to expire.
GE waived penalties for those that missed the deadline, and committed trusts to emergency one-year deals while it continued to negotiate with Pasa.
Chris Wright, GE Europe's service, sales and marketing manager, said the company would push for the use and maintenance of its equipment to recover costs. "We structured the one-year contracts in such a way as to make it hard not to renew this year."
GE refused to agree terms last year because the NHS asked suppliers to pay a manual handling fee to NHS Logistics to process invoices on their behalf.
It said that forcing customers to pay extra would put them off buying and maintaining the equipment, thereby compromising GE's integrity as a supplier.
Under the terms of the new deal, NHS Logistics will automate the entire procurement process from next year. It will also sell equipment to NHS trusts at a reduced price if they pay on time.