In an announcement that follows recent botched IT projects for the UK Government’s Child Support Agency, Department of Work and Pensions, and Inland Revenue, Plano, Texas-based EDS beat out a rival consortium called Radii, led by Computer Sciences Corp to win the multi-billion-dollar contract.
EDS will create the DII, which is a common IT network that will bring together the information systems of the Army, RAF, and Royal Navy, and comes at the end of a fiercely contested three-year procurement process.
The EDS Atlas team, which consists of Fujitsu Services, General Dynamics, EADS Defence and Security Systems, and LogicaCMG, went head-to-head with a CSC-led group that included BT, Capgemini, and Thales. The DII (F) project aims to provide a single platform across the UK’s three armed forces, and replace the myriad bespoke systems that exist at its 4,000 locations worldwide. Graham Lay, MD for EDS’s defence sector business told ComputerWire that EDS is currently finalising the contract, and expects to sign the MoD deal in the next few weeks.
Martin Southgate, CEO for the EDS-led Atlas consortium told ComputerWire that EDS was successful due to its experience in similar large-scale UK Government deals. The key issue for this project is around its scale and the complexity of work. There has been a checkered track record around other government projects, and we have rolled out similar scale projects for the UK Government, he said.
EDS will manage its various supplier relationships as well as provide the project management and service delivery for the contract. Southgate said the MoD will not have separate contracts with each supplier, but rather will deal contractually with EDS itself. He said EDS and its tier-one subcontractor Fujitsu will be the two companies sharing delivery risk on the project.
The contract itself is to be broken down into three increments over the next 10 years. Southgate said the first increment of the contract will involve joining up the three armed forces from the headquarters in the UK, through to field battalions, troops and land rovers, and will involve EDS and its partners creating an IT infrastructure to link some 150,000 desktop PCs and laptops, for some 300,000 users across the Army, Royal Navy, and Royal Air Force.
The first increment of the project is worth some GBP 2.3bn ($4.4bn) over 10 years, and will also involve subcontractors General Dynamics and EADS rolling out a local area network infrastructure with no single point of failure, with EADS also providing security services, and General Dynamics also providing battle space capabilities. LogicaCMG will provide application migration services worth some GBP 100m ($189m), and Southgate said EDS is also working with HP, IBM, and a number of other smaller contractors on the project. HP is providing capacity for new infrastructure, and IBM is providing consulting services.
Southgate said the second increment of the project will commence in 2007, with the third increment commencing in 2008. The total budget allocated by the MoD for all three increments is 4bn pounds ($7.56bn). The MoD expects to make savings of about 170m pounds ($322m) through the deal, and it has been reported that some 2,000 jobs could be created.
However, Alex Flynn, a spokesperson for the Public and Commercial Services union, which represents MoD employees, said questions remain unanswered. We have a number of concerns, he said. There was no opportunity for an in-house bid for the MoD contract, which means the department could not gauge against the cost to measure value for money. He also questioned the track record of the government procuring IT, and private-sector contractors such as EDS being able to deliver on government sector contracts.
Southgate hailed EDS’s experience in delivering wide-ranging central government contracts as evidence of its ability to deliver the MoD project successfully. However, EDS’s track record here has been badly damaged by projects failing across the CSA, DWP and Inland Revenue, and as a result the company had been widely expected to have burnt its bridges with the UK Government, but Ed Kirby, director at outsourcing consultant Morgan Chambers said EDS has been unfairly treated.
EDS is simply being used as the whipping boy, he said. The question is, can the MoD gear itself up to buy what EDS can deliver? The MoD is steeped in history, but it is the people on the ground that have to change. The CSA and DWP problems arose because they haven’t been able to change their internal politics.
Kirby also said that EDS was never going to be thrown out in the cold by the UK Government. This deal proves that this is the case, he said. If you’re doing big deals, you have to go for the big players, and the MoD clearly believes in what EDS says they are going to do today and tomorrow. It is also a case of the MoD believing that it is smarter at managing its supplier, and that it can take advantage of a commercial enterprise like EDS.
Clearly, other government departments feel they can also extract more from EDS as their supplier. Late last month, it emerged that EDS had also made it on to the shortlist alongside Capgemini for the GBP 650m ($1.23bn) UK Metropolitan Police Service outsourcing contract, despite its track record and the revelation that it had been investigated by the UK government four times in the last three years.
