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IBM beat out rival Northrop Grumman Corp. (NOC.N: Quote, Profile, Research) to win an $863 million, seven-year contract to perform information technology work for the state of Texas, state officials said on Tuesday. The pact calls for International Business Machines Corp. (IBM.N: Quote, Profile, Research) to manage data centers for more than two dozen state agencies, consolidating their operations through a project that the state estimates will save it $159 million over the life of the contract. IBM, the world's largest computer services company, will handle the work with three subcontractors: Pitney Bowes Inc. (PBI.N: Quote, Profile, Research), Unisys Corp. (UIS.N: Quote, Profile, Research) and Xerox Corp. (XRX.N: Quote, Profile, Research). Accenture Ltd. (ACN.N: Quote, Profile, Research) and Affiliated Computer Services Inc. (ACS.N: Quote, Profile, Research) were on the bidding team led by Northrop, the No. 3 U.S. defense contractor, which is looking to diversify away from traditional military hardware and boost revenue by performing computer services for government agencies. Larry Olson, chief technology officer for the state of Texas, said the selection of the IBM group was based on more than pricing. Panels of state officials met with managers from the rival bidding groups as part of an extensive bidding process that began in September 2005. "The evaluation was pretty close in a lot of different areas," Olson said in an interview. "I think one of the key areas (that made the difference) was the team that IBM put in place. We think it was a very strong team. It really clicked. They understood what we were asking for. They got it." The pact, which goes into effect immediately, expands the scope of a decade-old outsourcing contract between Northrop and the state of Texas. The Northrop pact expires next August.
Source: Reuters.com

Labels: ACN, ACS, IBM, Northrop Grumman, PBI, Texas, UIS