Commentary

Paul McDougall
Editor At Large, InformationWeek  

BearingPoint Sale Could Disrupt Customer Engagements

Tech consulting firm Gartner is warning clients that the sale of government outsourcer BearingPoint could disrupt work on current projects, such as the rebuilding of Afghanistan's civil institutions.

Tech consulting firm Gartner is warning clients that the sale of government outsourcer BearingPoint could disrupt work on current projects, such as the rebuilding of Afghanistan's civil institutions."These deals could cause short-term disruption for many BearingPoint clients but may lead to a more stable business environment in the long run," Gartner said in a research note Friday.

BearingPoint, which filed for Chapter 11 bankruptcy protection in February, last week announced a deal to sell the bulk of its Public Services government outsourcing unit to Deloitte for $350 million. The agreement is subject to bankruptcy court approval.


More Government Insights

White Papers

More >>

Reports

More >>

Webcasts

More >>

BearingPoint also said it signed a non-binding letter of intent to sell its smaller North American commercial unit to PricewaterhouseCoopers for $25 million. Additionally, the company said it's in negotiations to sell off its European and Asian operations.

Gartner warned that the extensive restructuring could put client projects in jeopardy.

"BearingPoint has not finalized these deals, nor do they account for all of BearingPoint's business. This uncertainty may drive some BearingPoint employees to seek jobs elsewhere--and the transition will bring inevitable loss of focus," Gartner said.

Gartner is advising BearingPoint customers to press the company for details on the status of their project teams, extend project timelines if possible, and meet with any new owners of the company.

The uncertainty is apparently not stopping the federal government from handing more work to the bankrupt firm. The General Services Administration on Monday announced the selection of BearingPoint as an official vendor on the 10-year, $50 billion Alliant contract. Under the Alliant project, the federal government plans a sweeping revamp of security-related IT systems.

BearingPoint holds numerous, sensitive government contracts--a situation that makes a smooth transition to new ownership all the more critical. For instance, the United States Agency for International Development in 2007 awarded the company a five-year, $218 million deal to assist with the rebuilding of private and public institutions, from banking to education, in Afghanistan.

BearingPoint is also working on a number of other key military and security contracts. The company's financial problems date back several years.


Related Reading




Currently we allow the following HTML tags in comments:

Single tags

These tags can be used alone and don't need an ending tag.

<br> Defines a single line break

<hr> Defines a horizontal line

Matching tags

These require an ending tag - e.g. <i>italic text</i>

<a> Defines an anchor

<b> Defines bold text

<big> Defines big text

<blockquote> Defines a long quotation

<caption> Defines a table caption

<cite> Defines a citation

<code> Defines computer code text

<em> Defines emphasized text

<fieldset> Defines a border around elements in a form

<h1> This is heading 1

<h2> This is heading 2

<h3> This is heading 3

<h4> This is heading 4

<h5> This is heading 5

<h6> This is heading 6

<i> Defines italic text

<p> Defines a paragraph

<pre> Defines preformatted text

<q> Defines a short quotation

<samp> Defines sample computer code text

<small> Defines small text

<span> Defines a section in a document

<s> Defines strikethrough text

<strike> Defines strikethrough text

<strong> Defines strong text

<sub> Defines subscripted text

<sup> Defines superscripted text

<u> Defines underlined text

InformationWeek encourages readers to engage in spirited, healthy debate, including taking us to task. However, InformationWeek moderates all comments posted to our site, and reserves the right to modify or remove any content that it determines to be derogatory, offensive, inflammatory, vulgar, irrelevant/off-topic, racist or obvious marketing/SPAM. InformationWeek further reserves the right to disable the profile of any commenter participating in said activities.

Disqus Tips To upload an avatar photo, first complete your Disqus profile. | View the list of supported HTML tags you can use to style comments. | Please read our commenting policy.
T-Shirt Giveaway T-Shirt Giveaway: Each week we're selecting one great comment from our readers. The author of the comment will receive an InformaitonWeek Community t-shirt. So get posting!
Subscribe to RSS

Resource Links