NHS Confirms DHL+Novation Contract
According to the BBC and The Guardian, the UK National Health Service (NHS) is going through with its outsourcing of some procurement functions to DHL and its subcontractor Novation. The project had met opposition from trade unions throughout the summer. About 1,600 NHS employees will be transferred to the private sector while 22 billion pounds (almost $42B at current exchange rates) of orders over 10 years will be affected. The company says it will save the NHS one billion pounds ($1.9B) during that timeframe. The Hoovers business database ranks DHL as the worldwide leader in cross-border express deliveries, ahead of FedEx and UPS. Deutsche Post, DHL’s parent company, reinforced its position in Great Britain through the acquisition of Exel last year. The Office of Fair Trading (OFT) had cleared the deal in July. John Allan, DHL Logistics’ chief executive, gave the media assurance that doctors would get to decide which products should be purchased.
Workers and their unions might yet decide to go on strike, while some question the legality of the contract since the scope outlined in the notice released two years ago mentioned a significantly smaller amount than the actual award. The Tories (the conservative, main opposition party) also expressed reservations about the way the contract was being awarded.
September 5, 2006 Related topics: Contract Awards, Group purchasing & GPOs