IBM out of £4bn MoD contract race

IBM has been dropped by the Ministry of Defence in the bidding for its £4bn 10-year outsourcing contract.

The IBM-led consortium of BAE Systems, Computacenter, Steria, NTL and Echelon was one of four bids for the lucrative Defence Information Infrastructure (DII) deal.

The MoD announced today it has selected three parties for the next stage of the procurement process. These are the EDS-led Atlas consortium of Fujitsu, Cogent, General Dynamics and LogicaCMG; the Lockheed Martin-led bid with Deloitte Consulting, Hewlett Packard, QinetiQ, SAIC and Unisys; and the CSC-led Radii group of BT, CGEY and Thales e-security.

The preferred bidder will be given a 10-year contract to design and build a single information infrastructure for the MoD, covering some 177,000 desktops and disparate systems worldwide. A spokeswoman for the MoD told silicon.com the talks will begin again in January.

"We begin the negotiation phase with the three remaining consortia which commences on 19 January and is expected to last about three months," she said.

The winning bidder will be selected in the autumn with an announcement due before the end of next year.

Gary Mellor, CEO of the Radii consortium, said in a statement that he is "delighted" by the news. "We have worked hard to develop a flexible partnering framework which is focused on delivering tangible benefits to the MoD by infusing the very best in solutions and service delivery capabilities," he said.