EDS set to land £4bn deal to run UK defence IT?

EDS is reported to be on the verge of landing the £4bn outsourcing deal to run the UK's defence and armed forces IT infrastructure for the next 10 years.

The Ministry of Defence (MoD) has targeted £174m in efficiency savings through the Defence Information Infrastructure (DII) contract, which will overhaul the UK's defence IT infrastructure.

The EDS-led Atlas consortium with Fujitsu Services, EADS, General Dynamics, IBM and LogicaCMG is competing against the CSC-led Radii consortium which includes BT and Thales.

Two separate sources close to the negotiations confirmed last week to silicon.com that the Ministry of Defence (MoD) selection committee has made its final recommendation for the preferred bidder and that a decision is "days away" while it goes through the final approval process.

And reports in the Sunday newspapers claim EDS has beaten off competition from CSC to land the lucrative contract, although the MoD is refusing to comment ahead of any official announcement.

The deal will be a huge boost to EDS, which has lost out on several big UK government IT contracts in recent years, including the £6bn NHS IT programme and the £4bn Inland Revenue deal.

DII will replace 300 diverse information systems across 2,000 locations worldwide, covering some 177,000 desktops and aims to create a unified infrastructure across the UK's armed forces.

One of the key issues for the bidders is risk, with the MoD incorporating strict penalties that allow it to kick out the primary contractor while keeping everything that has been developed up to that point if the project goes wrong.