MoD awards £4bn contract to EDS

A consortium led by EDS has won the £4bn IT services contract with the Ministry of Defence.

A consortium led by EDS has won the £4bn IT services contract with the Ministry of Defence.

The 10-year deal, one of the biggest in IT outsourcing in UK history, is to supply IT services to the MoD and manage everything from battlefield communications to links between 100,000 civil servants and 200,000 army staff.

The EDS-led Atlas Consortium, which includes Fujitsu Services, General Dynamics, EADS and LogicaCMG, beat off a Computer Sciences Corporation-led consortium, which included BT, Capgemini and Thales UK.

CSC and BT are already heavily committed to the national programme for IT in the NHS, and Capgemini last year displaced EDS as lead outsourcer to the Inland Revenue.

The MoD used the Office of Government Commerce's best practice guidelines through the tendering process and contract award, EDS told Computer Weekly.

The MoD plans to split the 10-year Defence Information Infrastructure project into three stages. The partners will be selected on their ability to deliver the complete 10-year requirement, but the MoD will initially commit only to the first stage.

Commitment to the second and third stages will depend on the contractor's performance, value for money delivered and the MoD's needs.

Winning the MoD contract will be a welcome relief for EDS, which has been slammed in recent months by ministers and MPs about the performance of its systems at the Child Support Agency.

Analyst group Ovum said EDS and Fujitsu were both strong suppliers to the MoD and suggested that EDS had persuaded the MoD that it had learnt lessons from "its multibillion-dollar outsourcing contract with the US Navy, which has been marred by delays and technical difficulties".

According to EDS, the implementation of the US Navy contract has been deemed successful by the customer.

The National Outsourcing Association said the MoD contract was designed to ensure the consortium members were jointly responsible for delivery.

"If one partner fails to deliver on any part of the contract, the other will step in and take over," said the NAO. "This minimises the risk and ensures that the provision of DII will be seamless and not vulnerable to any supplier weaknesses."

The outsourcer also answered speculation that large parts of the contract would be offshored. All IT jobs associated with the contract would be maintained in the UK, apart from those directly servicing British forces overseas, a spokesman said.

Read more on IT outsourcing