The Department of Health has announced its intention to award the NHS Choices contract to Capita.

The move means Dr Foster Intelligence, which established the online service, has failed to secure the£60m-£80m contract to develop the website over the next few years.

NHS Choices launched in June last year to offer online information about healthy living and NHS services to patients and clinicians. It is seen as a key component in the drive to boost patient choice and has a prominent role in health minister Lord Darzi's vision for NHS reform.

Dr Foster's 18-month contract to set up and develop NHS Choices is due to end in August.

The DH last week announced it intended to award the contract for the next phase to Capita after a multi-stage procurement process. The company was on a shortlist that also included Dr Foster Intelligence, IBM, Serco and Tata Consultancy.

In a statement to the stock market, Capita said the contract was worth£60m over three years with an option to extend it for a further two years.

The firm said it would be responsible for hosting the site and technical and content development. It would focus on "ensuring innovative engagement with citizens and clinicians".

Capita managing director for health Chris Sellers told HSJ the company felt it had put in a very strong bid.

"We're delighted to have been chosen as preferred bidder to build on what is already a valuable service and really help the DH develop it into a truly exceptional part of future healthcare in the UK," he said.

Under European procurement rules, a 10-day "standstill" period follows the announcement, during which unsuccessful bidders can request a debrief and decide whether or not to challenge the decision.

Dr Foster Intelligence declined to comment.