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EDS lands HUD contract

The computer services company inks an information technology and telecommunications deal with the Department of Housing and Urban Development worth up to $860 million.

Electronic Data Services is feeling right at home with the U.S. Department of Housing and Urban Development.

Plano, Texas-based EDS said Monday that it landed a deal with the department to develop a nationwide information technology infrastructure and telecommunications service called HUD Information Technology Services.

The performance-based contract includes a one-year base period and additional option years that could put the total value of the contract as high as $860.6 million if all the options are exercised.

"This is a performance-based contract that will increase vendor accountability, which is part of President Bush's management agenda for federal agencies," Vickers Meadows, HUD's chief information officer, said in a statement.

Under performance-based contracts, the department sets measurable performance standards and pays the contractor according to how well those standards are met, Meadows said.

Under the terms of the contract, EDS will provide IT services to 18,000 HUD users in more than 80 locations throughout the United States and its territories. Those services will include data processing, mainframe and desktop computer management, information security, help desk and user support, disaster recovery, printing and distribution. EDS also will provide other services such as local area network and wide area network services, wireless services, and Web administration.

EDS said its technologies will allow HUD to offer greater service to its customers and the ability to track and evaluate performance and customer satisfaction data in real time.

EDS has been struggling for much of the past year. The company has weathered a drastic earnings shortfall, a Securities and Exchange Commission probe and a management shakeup.

In July, EDS posted second-quarter 2003 net income of $138 million, or 28 cents per share, compared with $316 million, or 64 cents per share, in the same period a year ago.