All the latent concerns about IBM Corp’s service operations resurfaced this week when Electronic Data Systems Corp revealed that it didn’t even bid on the Lucent Technologies Corp facilities management contract won by IBM Corp. Valued at $6bn to $7bn over 10 years, the contract is billed as the biggest ever such contract, but Electronic Data declined to bid because its executives didn’t think it would be very profitable – and if after 34 years, Electronic Data Systems doesn’t know how to price a contract to make money, no-one does. Its own biggest deal in the quarter was $500m over five years for the Pentagon. Its shares slumped 19% after it warned of slower growth over the next six months because of a slowdown in winning new bids.
