The £2.3bn NHS National Programme for IT (NPfIT) has lost one of its three shortlisted candidates after US supplier Lockheed Martin dropped out of the running on Friday.
BT and IBM Global services are left bidding for the national application service provider contract to supply NHS care records. The contract will develop the data spine that will hold a summary patient record system.
Lockheed Martin was also part of a shortlist of 11 to provide IT at a regional level.
The NHS said in a statement: "We are pleased that [Lockheed Martin] has given us notice of its withdrawal now, rather than at a later stage of the competition.
"We value the efforts it has made and the innovation it has brought to the competition up to the point of its withdrawal."
A spokesman at Lockheed Martin confirmed that the company had pulled out of the NPfIT, but would not elaborate on the decision.
Lockheed Martin is currently bidding for the Ministry of Defence (MoD) £4bn 10-year Defence Information Infrastructure contract.
Robert Morgan, chief executive at outsourcing consultancy Morgan Chambers, believes that the decision to pull out of the NHS bidding is related to Lockheed Martin's European coverage.
"The company is huge in the US but has a smaller footprint in Europe and it would struggle to bid for both the NHS and MoD contracts," he said.
"The MoD project will not have as much political pressure and contractual demands as the NHS contract."
Morgan suggested that the development will strengthen the position of IBM and BT. "This waters the programme down and allows the remaining bidders to negotiate better contractual terms as a result," he said.
IBM Global Services and Accenture distanced themselves from industry rumours that they too were planning to withdraw from bidding due to the tough terms of the contracts.
An Accenture spokesman said: "I can categorically deny that Accenture is withdrawing from the NHS IT project.
"We are at the beginning of the negotiations but we are confident that we will be able to negotiate a fair and equitable contract, and we are able to competitively bid to meet those high standards."
A spokesman at IBM said that the company does not comment on rumour and speculation, but insisted that the allegations that IBM would pull out are "without merit".
BT said that it remains part of the project.
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