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D-day looms for £4bn defence IT contract
MoD awaits 'best and final' bids

By Andy McCue

Published: Thursday 25 November 2004

The Ministry of Defence (MoD) will take delivery of the "best and final" bids for its £4bn 10-year IT outsourcing deal on Friday.

The lengthy procurement process for the armed forces' Defence Information Infrastructure (DII) project now goes down to the final assessment before the MoD chooses its preferred bidder next February.

Two consortia are bidding for the lucrative deal. The EDS-led Atlas with Fujitsu, Cogent, General Dynamics and LogicaCMG and the CSC-led Radii group with BT, Capgemini and Thales.

General Sir Roger Wheeler, former chief of the UK General Staff and non-executive director at Radii bidder Thales, said the introduction of a common defence infrastructure is vital to supporting the technology of modern warfare.

"It doesn't matter whether it's Bosnia or Iraq. At the moment we have to rely on people reporting down the line usually by voice, not data," he said. "[DII] will enable faster passage of information and increased tempo of operations."

Wheeler added that communications interoperability with the US defence infrastructure is also a key component of the project.

DII will replace 300 diverse information systems across 2,000 locations worldwide, covering some 177,000 desktops and the MoD has targeted £174m in efficiency savings.

Open source, however, looks unlikely to play a major role in the new MoD technology infrastructure. Gary Mellor, CEO of the Radii Consortium, would not go into specific details of his side's bid but said: "The technology roadmap looks at a whole host of technologies. We will work with the MoD to deploy as and when they are robust enough."

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.

But Mellor said: "That's the cost of doing business. We are happy to do it. We would not sign up to a deal that did not meet shareholder requirements."