IBM bows out of Ga. outsourcing race

Georgia's groundbreaking telecommunications outsourcing project has suffered another setback as one of the two teams vying for the $1.8 billion opportunity withdrew its bid less than two months after submitting it.

IBM Corp. last week said it was canceling its bid, said John Nyland, IBM's vice president of public sector Americas.

Officials at the Georgia Technology Authority will consult with governor-elect Sonny Perdue to determine the best course of action, said Michael Clark, a GTA spokesman.

Among the options to be discussed is whether to move forward with the procurement or to cancel it and consider outsourcing some parts of the state's telecommunications operation, he said.

The changing nature of the solicitation led IBM to withdraw its bid, Nyland said.

Sources familiar with the solicitation said the state made last-minute changes to terms and conditions, such as establishing uncapped performance measures whereby there was no limit on how much the vendor would have to spend to meet a service level agreement.

IBM of Armonk, N.Y. was leading the "Envision Georgia" team that also included Sprint Corp., Resource Network International Inc. and Enterasys Inc.

The development leaves only the "Connect Georgia" team, led by Electronic Data Systems Corp. of Plano, Texas, bidding on the contract. The EDS team includes AT&T Corp., Bell South Telecommunications Inc., Cingular Wireless Inc., Cisco Systems Inc., Information Management Systems Inc. and Science Applications International Corp.

The latest setback follows the state's cancellation of bids submitted in July 2002 by EDS and WorldCom of Clinton, Miss., over concerns about WorldCom's financial condition. EDS and IBM submitted bids on a new request for proposal Nov. 15. The contract is tentatively scheduled for award in April.

(Updated Jan. 7, 2003, 11:02 a.m.)


About the Author

William Welsh is a freelance writer covering IT and defense technology.

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