EDS, Connecticut Nix $1.5 Billion Contract



After six months of negotiations, EDS and the state of Connecticut have called it quits on a proposed billion- dollar outsourcing agreement. Had the deal been inked, it could have been worth $1.5 billion over seven years, and was originally estimated to save the state at least $700 million.

The collapsed negotiations come shortly after the price tag for the contract was upped from $1 billion. In addition, state officials last week delayed the signing of the agreement, requesting the contract be amended with an "employee choice option" that would give the state's 600- plus IT workers the choice to remain unionized state employees rather than forcing all workers to move to EDS's payroll. In addition, state comptroller Nancy Wyman had issued a statement indicating the state wasn't satisfied with the end results of previous projects privatized through EDS.

Connecticut has been looking to outsource centralized management of its computer operations, including integrated ERP and a statewide network for data access, for several years. Connecticut officials say they'll take a different approach to improving the state's IT operations, possibly a series of smaller contracts with EDS and other companies.

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