Unisys Extends IT Contract With Pa.

New contract is valued at $252 million.

Unisys Corp. on Monday announced it has signed a three-year contract extension for outsourced IT services with the Commonwealth of Pennsylvania valued at $252 million.

The original "Data Powerhouse" contract, signed in 1999 and in effect until 2006, is valued at $621 million. While the original contract called for Unisys to consolidate the roughly 20 data centers it had into a single data center and then operate the data center, the new extension calls for Unisys to evolve its services to cover more open systems and online processing requirements for the state—including the implementation of electronic voter registration and electronic filing of tax returns, according to Gary Richardson, account executive with the Unisys global outsourcing group in Harrisburg, Pa.

"It involves the procurement and provisioning of all the hardware to support the computing environment and covers Unisys, IBM, Sun systems or other technologies that best fit the needs of the Commonwealth," said Richardson.

"Well support a 24/7 secure data center providing full time operations support for state agency networks and provide production software support to keep environments up 99.99 percent of the time," he added.

The deal came about as a result of not only the states confidence in Unisys as a business partner but also because of some significant cost savings Unisys offered the state, according to Curt Haines, director of the bureau of consolidated computer services for the state in Harrisburg, Pa.

"Its a hefty vote of confidence. They have proven over the past three years that they understand our business, and in some cases, they took extraordinary measures to insure our mainframes are up and maintained," he said. "As part of this extension, theyve agreed to revisit our current pricing under the initial contract. They were able to come back to us and offer $31 million less than what we were obligated to pay," he added.

The Data Powerhouse managed today by Unisys and its partners houses eight large Unisys mainframes, five IBM mainframes, three IBM AS/400 mid-range systems and 48 Windows NT-based servers for electronic messaging.

The data center is used by multiple state agencies to process drivers license renewals, property tax and rent rebates for senior citizens, criminal files, unemployment compensation claims and other state government services.

Unisys, by years end, will roll out three large Sun Microsystems Inc. enterprise servers supporting welfare and Medicaid management systems.

"There was significant financial engineering involved that made it attractive for the Commonwealth to pursue the extension at this time," acknowledged Richardson of the price concessions. But the extension also brings new technology refreshes that Unisys will put in place early next year, which werent available when the original contract was signed. "We have implemented many efficiencies that were not in place when we assumed consolidation in 1999. We gained economies of scale that let us go forward more cost effectively," he added.

Unisys separately yesterday reported strong earnings growth in its third quarter this year, recording $59 million in net income this year, versus $20.9 million for the year-ago quarter. Although revenues declined 3 percent to $1.33 billion compared to the same quarter last year, Unisys improved its services operating margin by 3.5 percent for the third quarter. Unisys is headquartered in Blue Bell, Penn.