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Computer Sciences lands contracts

The information technology services company inks a joint-venture deal with the British military and takes over Level 3's managed hosting business.

Computer Sciences has landed a joint-venture deal with the British Ministry of Defense and has also inked a contract to take over Level 3 Communications' managed hosting business.

The El Segundo, Calif.-based computer services company said its joint-venture win in the United Kingdom is a 10-year contract with a potential value of more than $948 million that involves providing facilities management and training range operations for the British Ministry of Defense. For the deal, announced Thursday, Computer Sciences' DynCorp International unit is teaming with U.K.-based facilities services provider Interservefm in a venture named Landmarc Support Services. Computer Sciences holds 50 percent of the voting shares of the joint venture.

The win represents a quick return on Computer Sciences' $950 million acquisition of DynCorp, which closed March 7. When it first announced the DynCorp deal in December, Computer Sciences said it was strengthening its presence in the U.S. federal market. But the British military deal is part of the company's potentially large chunk of business with European government agencies. Computer Sciences-led partnerships are nearing final contracts with the United Kingdom's Royal Mail Group for a $2.3 billion, 10-year IT outsourcing deal and the German Defense Ministry for a $6.1 billion, 10-year IT outsourcing agreement.

In the British military deal, Landmarc will manage all the nonmilitary support for Britain's Army Training Estate and Defense Estates, which provide the land and facilities required for the country's armed forces training. The contract involves IT systems, but extends to services such as catering and accommodation. Such nontechnical requirements are typical for military range-support deals, said Computer Sciences spokesman Mike Dickerson. "A lot of these contracts are soup-to-nuts contracts," he said.

Computer Sciences remains active in the commercial arena as well. The deal with communications services company Level 3, announced Friday, calls for Computer Sciences to assume certain lease obligations for data centers in Chantilly, Va., and Cambridge, Mass., and service Level 3's managed hosting customers. As part of the transaction, Computer Sciences will also use Level 3's network services to serve hosting customers. The hosting business includes providing companies with Internet and applications hosting services.

Computer Sciences has about 90,000 employees and posted revenue of $11.3 billion for the year ended Dec. 27, 2002.