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C4 Systems Inks Lucrative Military IT Deal

C4 Systems, the Taunton, Mass.-based unit of defense contract giant General Dynamics, will supply the Department of Defense (DoD) with hardware, software and networking gear in a new deal worth up to $2 billion over 10 years.

The initial order totals $8.3 million and includes data servers, ethernet switches, multiple processor units, flat panel displays and printers. Another key component are ruggedized handheld computers -- off-the-shelf wireless devices with specially designed displays and cases that can withstand extreme conditions such as the sand and heat of desert warfare.

"We will continue to bring the very latest industry advances to address the Department of Defense's transformation objectives," said Chris Marzilli, C4's vice president of commercial hardware systems.

The contract will also bring business to C4's core subcontractors, network equipment maker Cisco Systems, server and storage specialst Sun MicroSystems and electronics manufacturer DRS Technologies.

For C4, the deal expands a longstanding relationship with the Pentagon. The company was the prime contract on the previous military IT contract, which has totaled $888 million in orders since 1995.

The DoD is modernizing its computer systems, making sure that commanders in the field can use technology to get up-to-the-minute intelligence and ensuring that back end systems in different branches of the service are interoperable.

It's part of a larger effort by the federal government to improve efficiency by boosting spending for IT equipment and services. Norman Lorentz, the federal government's chief technology officer told Silicon Valley leaders last week that there is "unlimited opportunity" for technology firms of all sizes to do business with Washington.

Lorentz conceded that Washington has done a poor job of assessing and implementing emerging technologies. This is an area where startups can win contracts, even if they haven't done business previously with the federal government.

Finally, the federal government will spend billions on IT outsourcing in coming years. A high percentage of government IT workers will be eligible for retirement over the next five years, Lorentz said. And the government will look to farm out jobs to the private sector to save money.