Connecticut Pulls Plug On Huge Computer Contract
HARTFORD, Conn. (Reuters) - Connecticut has decided not to go ahead with a proposed $1.5 billion state computer privatization contract with Electronic Data Systems Corp. (NYSE:EDS - news), Gov. John Rowland said Tuesday.
Rowland said at a news conference that after months of negotiation, the state had ended talks with EDS and will ''change course'' in its effort to upgrade its computer systems.
A spokesman for Plano, Texas-based EDS could not immediately be reached for comment.
Connecticut last year tentatively awarded the massive privatization contract, valued at up to $1.5 billion over seven years, to EDS. The seven-month competition also drew bids from International Business Machines Corp. (NYSE:IBM - news) and Computer Sciences Corp. (NYSE:CSC - news)
Rowland said he was not satisfied that better computer service could have been guaranteed six or seven years from now if the state put its operations in the hands of EDS.
''I think this is the best decision for the state of Connecticut,'' Rowland said. ''That's my responsibility, to determine what's best for us, for service reliability, for quality, protection of information, and even for the state employees as well.''
Connecticut officials and EDS lately had been trying to hammer out final details of the contract, which still would have needed legislative approval to become official.
Rowland instead proposed to keep the state's Department of Information Technology as an independent, stand-alone agency, with the power to subcontract some aspects of its operation.
''If this were a one-year contract to purchase pens for the state of Connecticut, that's really easy,'' Rowland said. ''We know how many pens we need, we know about how much they cost, and we can enter into an agreement or contract with somebody to provide them.''
''The hard part is to say, what are our needs five years from now, and what technology do we want, and what price and service guarantees are there?'' Rowland said.
Rowland's ambitious and controversial privatization plan would have affected some 700 state employees from about 65 agencies, boards and commissions, covering every governmental branch except higher education, judicial and legislative.
Connecticut's privatization plan had been attacked by some top state lawmakers and state Comptroller Nancy Wyman. Wyman said the plan would be an expensive boondoggle with too many unanswered questions.
Two state employee unions also bitterly fought the proposal on grounds of job security, and also said it would be dangerous to give a private company personal information about Connecticut's residents.
EDS shares were up $1.19 at $57.75 in midday trading on the New York Stock Exchange. |
