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CSC Snags $735M Outsourcing Deal

Computer Sciences Corp. , which competes with IBM and EDS for big-money IT outsourcing contracts, has landed the industry's latest deal.

The El Segundo, Calif., company has signed a 10-year, $735 million deal with Marconi, a telecom hardware, software and services firm.

Under the pact, CSC will: manage Marconi's IT help desk, desktop computing, networking and mid-range operations;develop and maintain software applications; and provide telecommunications services.

It covers Marconi IT operations worldwide, except for Asia Pacific and Middle East units and the company's Interactive Systems business.

British Telecommunications, will work as a subcontrator to SCS on the project, handling networking services, including local and wide area networking , voice and conferencing services and remote access facilities.

A CSC spokeswoman was not immediately available to provide further details.

In a statement, CSC Chairman and CEO Van B. Honeycutt said, "Our overarching objective will be to leverage our global technology resources to help Marconi achieve its business goals."

CSC said the contract brings its new business total for the first quarter of fiscal year 2004 to $3.5 billion.

For U.K.-based Marconi, and other companies that sign longterm outsroucing deals, the motiviation is two-fold: to hand-off no-core functions and to save money.

The savings, which will be approximately 10 percent over running the operations itself, comes largely from employee payroll and insurance costs.

When deal closes next month, about 360 Marconi IT employees will transfer to CSC. An additional 40 workers will become BT employees.

"This agreement will contribute significantly to our committed cost reduction and efficiency program and allows us to focus on ... building, maintaining and supporting the networks of the world's leading telecommunications companies," said Mike Donovan, Marconi's COO.