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Much-loved IT services behemoth EDS is to sue the NHS for cancelling an contract to manage email for 1m staff.

An internal NHS email seen by The Register states: "The contractual relationship between the NHS Information Authority(NHSIA) and EDS as supplier for the NHS's centrally managed e-mail and directory services is to end."

The email reassures users that continuity arrangements are being put in place and that the original contract included a description of 'exit' arrangements to ensure service was maintained.

The NHS dropped EDS last week without compensation, citing difficulties with logging onto the system.

Now EDS is seeking more than £10m in compensation to recover costs for the loss of the £90m contract, according to the FT.

EDS is furious with the NHS for unilaterally terminating the contract. The usual practice is to resolve problems through arbitration, it says.

Execs told the FT that Richard Granger, director general of NHS IT, had seemed determined to paint the service as failing. ®

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EDS job cuts on the way
NHS pulls plug on ailing £30m IT system
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