DuPont Set To Hand CSC $1.9 Billion Outsourcing Extension

Chemical and materials giant DuPont Co. is set to sign a $1.9 billion extension to its massive IT outsourcing contract with Computer Sciences Corp., CSC said Friday.

Under the proposed seven-year extension, CSC would continue to provide DuPont with worldwide IT infrastructure and selected applications support through 2014. DuPont's current contract with CSC expires in 2007. The companies hope to have a definitive extension in place by the fourth quarter.

Upon the initial deal's signing in 1997, 2,600 DuPont employees transferred to CSC. Among other things, CSC has helped DuPont manage its year 2000 transition, a major SAP implementation, and a number of supply-chain initiatives.

The contract's length, however, runs counter to the recent industry trend toward shorter outsourcing deals and the use of multiple vendors. In a statement, DuPont CIO Robert Ridout said outsourcing the company's IT support to a single vendor helps DuPont in "streamlining our global business operations."

A contract extension from one of its most high-profile customers would provide a needed boost for CSC. The company is still smarting from Sears, Roebuck and Co.'s early termination of its 10-year, $1.6 billion agreement in May for what it says was the vendor's failure to perform certain services. CSC claims the retailer was looking for an excuse to exit the deal following its merger with Kmart Holding Corp. The companies are currently trading court filings over the matter.