CSC set to land $1.9bn BAE Systems IT deal

CSC is on the brink of landing an extension to its IT outsourcing deal with BAE Systems, worth an estimated $1.9bn.

The current contract with BAE Systems expires in October 2006 and CSC is now in final negotiations for the new five-year contract extension. The deal will cover 13 BAE Systems businesses and joint ventures in the UK and US, although the UK submarines business is still under review.

CSC initially signed a 10-year $1.5bn IT outsourcing deal with BAE Systems in the UK in 1994, in what was one of the biggest contracts awarded in Europe at the time. That deal was subsequently expanded to support BAE Systems mergers in the UK and US.

Alastair Imrie, group MD of shared services at BAE Systems, said the new deal with CSC represents the next generation of IT outsourcing.

He said in a statement: "It will provide cost reduction, contract flexibility and technology and process improvements, in support of BAE Systems' business requirements."

In a flurry of contract activity CSC has also won a seven-year extension to an IT outsourcing deal with DuPont worth between $1.6bn and $2bn (depending on fluctuations in business volume and future efficiency gains), and signed a two-year extension to another IT outsourcing deal with BAE Systems' joint venture missile company MBDA worth $100m.