Technology service company Logica has agreed to a number of efficiency savings with the government following a savings review launched by the Minister for the Cabinet Office, Francis Maude, earlier this year.
The company said it anticipated the price cuts and savings would not affect its forecasts.
A spokesperson from the Cabinet Office said the government expected to save hundreds of thousands of pounds through the renegotiation process and was currently in talks with around 19 IT suppliers.
Craig Boundy, chief executive officer of Logica's UK business, said the company was pleased to have reached an agreement with the office.
"We now look forward to continuing our engagement with government on longer-term initiatives where we can use our expertise in deploying technology to help bring better services to the citizen while saving money in the process," he said.
Under the MoU, Logica will continue to deliver all its existing contracts. Last year the company's UK public sector revenue accounted for around 12% of its group sales.