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CSC rings in AT&T services deal

The world's No. 3 computer services company adds a $300 million, ten-year outsourcing contract with AT&T to its recent raft of new deals.

The phone won't quit ringing for Computer Sciences Corporation.

The world's No. 3 computer services company today added a $300 million, ten-year outsourcing contract with AT&T to its recent raft of new deals.

Through the contract, CSC will manage 50 systems that support AT&T Consumer Services. AT&T plans to outsource software systems that provide telemarketing and customer support; provisioning and provisioning support; and compensation and commissions for sales and marketing.

Work on the project is expected to start in March.

Under the agreement, about 100 AT&T employees will be offered positions at El Segundo, California-based CSC. Another 150 AT&T contract employees will transfer to CSC to support the contract. However, all employees chosen to work for CSC will remain at AT&T's seven New Jersey locations where they now work.

AT&T announced plans in October 1997 to outsource its business and consumer operations on which it spends about $230 million per year. At the time, the company said its strategy called for 750 full-time AT&T employees and more than 1,200 consultants to be transferred to and hired by the winning outsourcing vendors.

AT&T's first move was to award, in December, IBM Global the contract to handle computer services for its business division.

CSC started negotiating the consumer contract with AT&T last September and was expected to announce a decision at the beginning of this year.

Earlier this month, CSC also inked a tentative two-year, $200 million deal with vehicle rental company Budget Group and is currently completing negotiations for a $360 million, five-year outsourcing contract with Alcatel, a French telecommunications company.

CSC's chief executive Van Honeycutt last month said the company was on a roll after its December 9 win to modernize the U.S. tax system, a deal reported to be worth at least $3 billion. Honeycutt at the time predicted billions in new deals over the next few months in financial services, aerospace, and utilities industries.

However, CSC recently lost a coveted contract to privatize computer services for the State of Connecticut.

Rival EDS, which lost its bid for the AT&T contract, won the nod to negotiate that landmark $1 billion deal.