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Army to Shell Out $500 Million for IT

Dell and rivals HP , GTSI and Lockheed Martin have scored a bid to provide hardware, software and services for the U.S. Army to the tune of $500 million, the latest in a series of large contract wins for systems vendors.

Dell spokesperson Michelle Mosmeyer said the seven-year contract is comprised of a 36-month base period and two, 24-month option periods.

As part of its federally funded Information Technology Enterprise Solutions (ITES) procurement contract, the Army will purchase an indefinite quantity of infrastructure and services, but how much from each vendor has not been decided as of yet.

Through the ITES contract, which is a key part of the high-profile Army Knowledge Management transformation plan geared to move the Army's knowledge base to the Internet, the Army plans to buy servers, workstations, desktops, notebooks, storage systems, networking equipment, operating systems and commercial software applications, peripherals, and related services.

These services can include installation, equipment maintenance, site surveys, system configuration and integration, image loading, data migration and asset tracking.

Mosmeyer said the contract is known as ITES Functional Area-1 for Enterprise Hardware Solutions. The Army will award ITES Functional Area-2 for Enterprise Mission Support Services Solutions later, but how much money will be allotted for that contract has not been made public.

"This is a great achievement for GTSI," said Terri Allen, senior vice president of sales at GTSI. "We are charged with providing the technology necessary to support the Army's goal of an enterprise-wide architecture. It is a great responsibility and one which we are enthusiastic about fulfilling."

The hefty contract is the latest in a series of large contracts systems vendors have been picking off in the last year despite a softened economy. Monday IBM announced it would provide hardware for Ohio State University.

Dell itself secured a three-year bid to be the primary provider for desktop and laptop computers to healthcare provider Kaiser Permanente's medical offices and medical centers. During the lifecycle of that agreement, Dell agreed to provide as many as 95,000 Dell OptiPlex desktop computers and 11,000 Latitude notebook computers, along with a suite of tailored technology deployment services.

Still, on the customer side of the deals, Procter and Gamble's spending dwarfs that of the Army. After breaking off a deal with EDS late last year, that company agreed to pay HP $3 billion for a 10-year IT outsourcing contract.

HP's deal calls for it to manage the company's IT infrastructure, data center operations, desktop and end-user support, network management and some applications development and maintenance support for P&G's global operations in 160 countries. Meanwhile, IBM appears poised to get in on the P&G party.