HP Wins Defense Contract

HP was awarded a $290 million, 10-year
outsourcing contract with the Defense Logistics Agency’s (DLA)
Enterprise Data Center (EDC) program, officials announced Wednesday.

The contract is a big win for HP, giving the Palo Alto, Calif., IT giant
access to the ground floor of the DLA’s new
initiative. According to a DLA spokesperson, the contract calls for HP to consolidate
2,500 of DLA’s roughly 3,300 servers under one umbrella, with the ultimate
goal of reducing the total number of servers in the agency to 400.

“The HP team is going to be responsible for the running of the EDC data
centers, as well as migrating the server storage and applications in the
scope of that contract to the EDC facilities,” said Mark Philip, EDC program
manager.

Migration will be staggered throughout the 10-year course of the contract.
The first DLA group to receive HP’s services includes the Defense Energy Support Center, Defense
Logistics Information Service and Defense Reutilization and Marketing
Service offices of the DLA. Initial operability is expected in seven months from the contract award date, with
full operational capabilities for in place by August 2006.

HP officials expect server consolidation to cost less than $300
million. However, the DLA is keeping its options open in case
the costs start to break the budget. The 10-year contract is broken into one five-year agreement,
with five, one-year extension options.

Mark Stouse, an HP spokesman, said many of its contracts with the
government are classified, but the company is well-respected in the public sector and
handles a large number of contracts.

“We have a very long track record with government customers, going all the
way back to HP’s founding in the late 30s, early 40s.”