18 December 2003 Systems and services giant IBM has been dropped from the bidding for the Ministry of Defence’s £4 billion, 10 year outsourcing contract, the biggest ever IT services deal in the UK public sector.

The decision to drop the IBM-led Actus consortium, which also included BAE Systems, Computacenter, Steria, NTL and Echelon, leaves three bidders in the running for the lucrative Defence Information Infrastructure (DII) deal.

The DII will involve the integration of the MoD’s and British Army’s many disparate networks and computer systems, as well as the management and upgrading of some 177,000 desktop PCs. It will encompass all British military sites in the UK and abroad.

According to the MoD’ Investment Strategy for 2002, the aim of the DII programme “is to update and merge individual information systems to provide all staff with a common platform for business applications, enabling many current paper-based processes to be replaced by equivalent electronic services.”

This will involved such projects as installing local area networks in army barracks and updating old computer terminals with modern workstations.

The three parties left in the bidding include an EDS-led consortium, called Atlas, which also comprises Fujitsu and LogicaCMG, among others; a Lockheed Martin-led bid with Deloitte Consulting, Hewlett-Packard, Qinetiq, SAIC and Unisys; and a CSC group that includes BT, Cap Gemini Ernst &Young and Thales.

From 19 January, the three consortia will enter into a three month negotiation phase and the winning bidder is expected to be selected in the autumn.