Thursday December 31 2:49 PM ET
Connecticut in tentative $1 billion deal with EDS
By Matthew Lewis
HARTFORD, Conn. (Reuters) - Connecticut officials have picked Electronic Data Systems Corp. (NYSE:EDS - news) to negotiate a $1-billion computer privatization contract that would be the first such deal for any state in the nation.
''EDS has been recommended to be the prime contractor for the state's information technology initiative,'' said Gregg ''Rock'' Regan, the Connecticut Department of Information Technology's chief information officer.
Regan told a news conference that Plano, Texas-based EDS has 90 to 120 days to hammer out the details of a contract with the state. Once the contract is finalized, it must be reviewed by state auditors and approved by legislators before it is official.
The proposed contract is for seven years, during which time Connecticut expects to save at least $400 million on computer technology and related services, Regan said. Other states seeking operating efficiencies are watching Connecticut's privatization effort, Regan said.
Regan said he anticipated a legislative vote by September 1, 1999.
An EDS spokesman could not immediately be reached for comment.
Regan said International Business Machines Corp. (NYSE:IBM - news) was the runner-up in the seven-month competition, followed by Computer Sciences Corp. (NYSE:CSC - news).
The privatization will affect some 600 state employees from about 65 agencies, boards and commissions, from every governmental branch except higher education, judicial and legislative.
EDS expects to offer jobs to about 78 percent of these state employees, with EDS subcontractors Unisys Corp. (NYSE:UIS - news) and Xerox Corp. (NYSE:XRX - news) offering jobs to 20 percent and 2 percent of the state employees respectively, Regan said.
EDS was chosen in part because of its experience in Australian and British government projects, Regan said.
The state's unusual information technology (IT) initiative was ordered in 1996 by Gov. John Rowland, to modernize and improve Connecticut's IT infrastructure.
The aim is to allow computers from many different state agencies to talk to each other, and generally improve the way Connecticut does business and make life easier for its residents, Regan said.
''Right now, we have hundreds of thousands of different databases out there, written in many different languages, sitting on different platforms,'' he said. ''We believe Connecticut will be a shining star in the digital marketplace of the 21st century.''
Regan said EDS will open a 150,000-square-foot Technology Transformation Center in Hartford to serve as the state's IT headquarters. Other details were not immediately known.
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