Germany to Award $7.9B IT Contract

The German Government is still locked in talks with a consortium of suppliers as it attempts to clinch a massive $7.9 billion IT systems and data center contract for the nations army.

The ISIC 21 consortium, led by Computer Sciences Corp. (CSC) (NYSE: CSC) and including MobilCom AG and EADS, is still in negotiation with the German Government after the two parties were unable to reach agreement by the June 30 deadline for signing the contract.

A spokesman for the German Defense Ministry confirmed this morning that a final round of negotiations is now going on, although he told Next-gen Data Center Forum that a “result” is imminent.

Reportedly, the talks stalled after the consortium demanded an additional $608 million on top of the existing value of the contract. Both the German Defense Ministry and a spokesman for CSC refused to comment on this.

The contract, like many public sector technology schemes, promises to be complex. The 10-year deal will support the German Army’s entire IT and communications infrastructure, including the force’s two main data centers, which are at undisclosed locations. The deal, however, does not include battlefield IT systemsDubbed Herkules, the project also involves the development of LANs and WANs both within Germany and overseas. The German Army currently has troops deployed in Afghanistan, Kosovo, and Djibouti, for some reason.

If the deal is signed, the ISIC consortium would also take responsibility for a major SAP AG (NYSE/Frankfurt: SAP) rollout that is currently taking place across the German Army's IT infrastructure.

The ISIC 21 consortium was chosen over a rival group, the TIS consortium, as the preferred supplier for the Herkules deal in 2002. T-Systems Inc.,

IBM Corp. (NYSE: IBM), and Siemens Business Services made up the TIS consortium.

— James Rogers, Site Editor, Next-gen Data Center Forum