Government selects Detica for integration of service-related contracts abroad
BAE Systems Detica, a leading defence and security technology firm, has been named the preferred bidder for a six-year IT service integration and management contract by the UK's Foreign and Commonwealth Office (FCO). The contract, worth up to £80 million, is part of a larger four-lot IT services procurement framework with an estimated combined value of up to £350 million.
This strategic partnership between a major defence and security technology firm and a vital government department responsible for the UK's foreign affairs underscores the trust placed in BAE Systems Detica's capabilities to support sensitive government IT infrastructure.
The contract focuses on IT service integration and management, meaning BAE Systems Detica will play a critical role in ensuring the FCO’s IT systems are reliable, secure, and efficiently managed. This support is crucial for the FCO's global diplomatic and consular activities.
The six-year contract denotes a commitment to a long-term relationship, fostering continuity and potentially enabling ongoing innovation and improvements in IT services within the department. Given BAE Systems Detica's expertise in cybersecurity, their involvement likely strengthens the FCO's defences against cyber threats, which is increasingly important for government departments dealing with sensitive international data.
Winning a significant government contract can lead to job creation and economic benefits within the UK tech and defence sectors. BAE Systems Detica expects to sign the contract formally with the FCO in the summer.
This 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. The other three lots in the framework cover desktop services, change and project management services, and operations delivery.
BAE Systems' strategy includes growing its positions in the cyber and intelligence services markets for governments. In 2012, BAE Systems' combined sales shrank 7%, but revenue for the Cyber and Intelligence division grew by 16%.
In January, the FCO unveiled a new framework for IT services related to Oracle's ERP software, worth up to £750 million. Some observers viewed this framework as a failure on the part of the Cabinet Office to persuade departments to pursue alternative software strategies.
Martin Sutherland, managing director of BAE Systems Detica, stated that they will draw on the wider capability within BAE Systems to deliver a solution for the FCO. This contract is the first of four to be awarded under the new IT services procurement framework from the FCO.
It's worth noting that the FCO's IT services may also be used by other public bodies, including the UK Border Agency, the British Council, and the Department for International Development.
The Department of Transport has also recently sold its back-office delivery center to business process outsourcer (BPO) arvato, creating the first "independent" shared services facility for the government. This move is part of a broader trend towards outsourcing government IT services to improve efficiency and reduce costs.
In light of potential US government spending cuts curtailing Cyber and Intelligence revenues in 2013, this contract with the FCO represents an important source of revenue for BAE Systems. The company is pursuing organic growth opportunities in commercial cyber and security applications and systems.
In conclusion, the selection of BAE Systems Detica as the preferred bidder for the FCO's IT services contract highlights the company's reputation and capability in managing complex, secure IT environments essential for critical government functions. This partnership is expected to bring benefits to both the FCO and the wider UK tech and defence sectors.
The six-year contract, potentially enabling ongoing innovation and improvements in IT services within the FCO, may lead to economic benefits not only for BAE Systems Detica but also for the broader UK tech and finance sectors, particularly considering BAE Systems' focus on growing its positions in the cyber and intelligence services markets. Given the critical nature of IT systems for the FCO's global diplomatic and consular activities, BAE Systems Detica's expertise in cybersecurity likely strengthens the FCO's defenses against cyber threats, a crucial concern for government departments dealing with sensitive international data.
