£4bn MoD deal down to two bidders

Two consortia have made today's deadline for bids for the tough 10-year, £4bn MoD DII (Defence Information Infrastructure) contract.

The winner will face the challenge of connecting around 300,000 users and 100 or so computer systems, managing the transition and tough penalty clauses for failure.

IBM bailed out of the bidding at the end of last year and Lockheed Martin dropped out late last month. This leaves the EDS-led Atlas consortium with Fujitsu, Cogent, General Dynamics and LogicaCMG fighting the CSC-led RaDII consortium with BT, CGEY and Thales.

Lockheed is said to have lost interest as the MoD's service delivery contract became more of an outsourcing deal.

One of the key aspects of the deal is risk mitigation, with the MoD taking all steps necessary to make sure that this does not become another large, failed government project.

The MoD wants one major supplier to sub-contract the work and take the blame. It has onerous reserve powers in the contract to step in and change the main contractor if things go wrong.

The winning bidder will get a 10-year contract to design and build a single information infrastructure for the MoD, covering 177,000 desktops and disparate systems worldwide.