MoD's DII - another day in outsourcing for CSC, BT and co

Computer Sciences Corporation (CSC) is to lead a consortium of providers bidding for the Ministry of Defence’s (MoD) £300m-a-year public private partnership (PPP) IT outsourcing contract.

The Radii Consortium, which also includes BT, Cap Gemini Ernst & Young and Thales, is the first bidder to be revealed for the MoD’s Defence Information Infrastructure (DII) project.

The purpose of DII is the modernisation of the armed force’s IT infrastructure, covering 300,000 users in 2,000 locations, and is likely to be split between several suppliers.

Interested bidders had to respond by this week and a spokeswoman for the MoD said the full shortlist is likely to be announced early next month. The first contracts are expected to be awarded in 2005.

Ken Archer, president of CSC's European business development division, said in a statement: “A key advantage of the Consortium's approach is its ability to exploit know-how from across this wide spectrum of experience to deliver lasting and tangible benefit to the MoD, enabling rapid deployment of new capabilities whilst maximising value for Defence."

Industry analyst Richard Holway said the bid is further evidence of the move away from the massive service providers winning big outsourcing deals on their own. “The days of the onesource mega-deal are disappearing to be replaced by a multisourcing approach where each party provides its services on a best of breed approach," he said.

“This is one of the most important changes we have seen in the IT sector for a decade. The 1990s clearly belonged to the ‘onesourcers’. We believe that the current decade will be seen to belong to the consortia.”

A BT, CSC and Xansa consortium recently won the Royal Mail’s £1.5bn outsourcing contract, while the Fusion Alliance, backed by BT, CSC and SchlumbergerSema is competing with Accenture and EDS for the Inland Revenue’s £4bn Aspire IT contract.