Background:
Our work with a quoted Applications Services Provider (ASP) involved supporting them with the structuring of deferred payments terms for the provision of a hosted ERP platform for a large NHS Acute Hospital Trust in the Midlands. The contract was NHS Standard Managed Services Terms. The software vendor delivered the licensing and, over a period of 5 months, the implementation of the £420,000 software solution.  Our ASP’s role would be to host the software in its datacenter in N England and support it through its help desk and remote management capabilities

The requirement:
Our vendor, specialising in the integration of Finance, HR and Enterprise processes, had won a tender to supply their system to the Trust on the basis that it would be delivered under an OJEU contract and that payment for the system would be facilitated over 5 years.

The Trust had a budget problem, wished to treat our charges as part of the general service charge in the contract and wished to minimise irrecoverable VAT. 

The vendor required cash for each of the 2-stages of the implementation: firstly, the licence fee on acceptance by the Trust of the licence; and second, payment for the implementation stages

The solution:
AFM Solutions agreed with the Trust and with its bankers, amendments to NHS Standard T&Cs such that, on acceptance of the licence and the subsequent stages of the implementation, our ASP partner would receive the cash value and reimburse the vendor for the licence and professional fees, retaining any margin it had built into the calculation

The benefits to the Trust:
 We delivered 2 key benefits:

• The Trust conserved its capital budget under the Capital Accounting Manual.

• VAT reclaim on the service charges

The benefit to the vendors:
The vednors won the tender and, through our close working relationship with a major European bank, AFM Solutions enabled an up-front delivery of cash for the set up costs and, importantly the software licence and implementation