The Foreign and Commonwealth Office has named BAE Systems Detica as the preferred bidder for a six-year IT service intergration and management contract, worth up to £80 million.
The security services provider will be responsible for managing all of the FCO's IT suppliers around the world, and "improving and maintaining continuity of its critical systems", it said.
In its original tender for the framework, the FCO said the winning bidder's services may also be used by other public bodies, including the UK Border Agency, the British Council and the Department for International Development.
The contract is the first of four to be awarded under a new IT services procurement framework from the FCO. The other three lots in the framework cover desktop services, change and project management services, and operations delivery. The four lots have an estimated combined value of up to £350 million.
"This contract is the first SMI or service integration and management (SIAM) contract a UK government department has brought to market following the Cabinet Office’s introduction of a multi-source IT supplier strategy including a SIAM function," an FCO spokesperson told Information Age via email.
“Being selected in the face of strong competition from large global IT players demonstrates our ability to bring the right capabilities to bear for the right solution," said Martin Sutherland, managing director of BAE Systems Detica.
"Over the coming months we will draw on the wider capability within BAE Systems, combining our delivery management and security expertise with the proven processes of BAE Systems Shared Services’ integrated service management team, in order to deliver a solution for the FCO that allows the organisation to achieve dynamic resilience in its IT infrastructure across the world," he said.
Detica said it expects to sign the SMI contract formally with the FCO in the summer.
A number of major outsourcing programmes have emerged latetly that reflect the current government's procurement strategy.
Earlier this month, for example, the Department of Transport sold its back-office delivery centre to business process outsourcer (BPO) arvato, creating what the government has described as its first "indepedendent" (i.e. private sector) shared services facility.
And in January, the FCO unveiled a new framework for IT services related to Oracle's ERP software, worth up to £750 million. The framework was met with opposition by some observers, who viewed it as a failure on the part of the Cabinet Office to persuade departments to pursue alternative software strategies.
IT services are an increasingly important source of revenue for BAE Systems, one of Britain's largest employers.
In 2012, BAE's combined sales shrank 7% to £17.9 billion, but revenue for the Cyber and Intelligence division – which includes Detica – grew by 16% to £1.4 billion.
"The group’s strategy includes growing its positions in the cyber and intelligence services markets for governments, and pursuing organic growth opportunities in commercial cyber and security applications and systems," BAE said in its annual financial report.
However, it also warned that US government spending cuts are likely to curtail Cyber and Intelligence revenues in 2013.
