Accenture Stumbles on U.K. Health Work

Accenture blames subcontractor iSoft in $450 million in future losses.

Accenture said it will lose $450 million in its outsourcing deal with the United Kingdom National Health Service, the company said March 28 in its second quarter earnings report.

A major cause of the stumble was tardiness by a subcontractor, iSoft, a health care software developer, in delivering critical software, the company said.

The result of the delay is to drive up cost and force Accenture to deploy interim solutions, according to Accenture.

Accentures work for NHS consists of designing, building, deploying and servicing a computer system for the national health agency.

"We are very disappointed that recent developments prevented us from meeting expectations this quarter. During the quarter, several issues increased the risks and uncertainties associated with the NHS contracts and affected our estimates of the expected contract revenues and costs," said Accenture CEO William Green in a statement.

Reflecting the charge, earnings per share for the second quarter were 11 cents, compared with 35 cents in the second quarter of 2005.


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