EDS and the Prison Service has signed a £200m, 12-year private finance initiative contract to rebuild the Prison Service's IT and communications systems.
The deal, the longest central government outsourcing contract yet, is a scaled-down version of the Home Office's Quantum project, put on hold for 17 months in 1998.
There is considerable uncertainty over what EDS will do. Carol Wyatt, executive director of civil government and healthcare for EDS, said, "This is a service-based contract. In the first couple of years we will upgrade the existing infrastructure and then look at the need to develop different processes and applications."
In the summer EDS will begin replacing 12,500 desktops with Microsoft Windows and Office 2000 and start building a new communications network.
No decision has been made about hardware but EDS is promising negotiations "to secure the best technology at the most competitive price".
The Prison Service and EDS will create a partnership board to manage Quantum, though details of how it will operate have yet to be agreed.
The pricing of the contract has been questioned by the PCS union, which represents prison service IT staff, some of whom are reluctant to be transferred to EDS.
But Wyatt insisted the EDS bid was not a loss leader, designed to gain the company a toehold in the Home Office. "The base contract is profitable," she insisted.
EDS beat off Sema, the incumbent prison service IT provider, after Sema and the Home Office fell out over the allocation of risk in the revamped project.