Connecticut outsources its systems to EDS for $1 billion

In a milestone move for government outsourcing, Connecticut has hired Electronic Data
Systems Corp. to run most state systems under a seven-year, $1 billion agreement.


The plan is the first of its magnitude among state governments and follows a
politically charged two years since the state accepted proposals, including a bid from the
state’s union of information technology workers.


EDS is in negotiations with the state and plans to complete the transition, which will
encompass IT work for all executive branch agencies, by September. If negotiations go
well, the Connecticut Assembly must then approve the plan.


Losing bidders include the Connecticut State Employees Association, IBM Corp. and
Computer Sciences Corp, which recently won a 15-year, $5 billion systems modernization
contract for the IRS.


“EDS did a particularly good job of looking at the bigger picture in terms of
transformation initiatives” that incorporate best use of technology in providing good
services well, state chief information officer Rock Regan said.


If the plan is approved, the state’s Information Technology Department (DOIT) will
remain as overseer with a CIO and core staff of about 80 to 90 people, Regan said.


EDS will offer jobs to all of the state’s more than 600 executive branch IT
workers, EDS’ Connecticut managing director Bill Dvoranchik said.


The company will meet individually with all displaced state workers and offer them
positions with a two-year employment guarantee, he said.


EDS is also providing signing bonuses, salaries matching or exceeding their current
ones and comparable benefits.


“We want them to join our company; we want to provide careers for them,”
Dvoranchik said. “They know these systems, they know this customer, and we want them
to be part of our company as we go forward.”


Under the state workers’ collective bargaining agreement, any employee who does
not choose to work for EDS can move to another available job within the state, IT
communications director Nuala Forde said.


Exempt from the plan is IT work in constitutional, legislative and judicial branch
agencies, as well as work in higher education institutions. According to Oscar Gomez,
president of the state union’s IT branch and a Social Services Department systems
developer, those agencies have been openly wooing displaced executive branch workers in IT
want ads.  

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