EDS (EDS) and the U.K. Department for Work and Pensions restructured their contracts, boosting EDS' revenue estimate from the arrangement by $1.4 billion over five years.
Plano, Texas-based EDS said the realigned contract "provides EDS with greater certainty of their income from the department. EDS said the deal is subject to performance and valued at $4.7 billion over five years. If EDS performs well, it could get added work valued at up to $324 million.
The changes will also allow the Work and Pensions Department to make substantial savings on information technology costs.
The DWP serves more than 20 million customer accounts and makes 13 million payments weekly. This contract equips the DWP with the tools to meet current and future technical demands, allows consistency and flexibility in IT services and ultimately provides greater customer service.
"The Department is committed to modernizing all aspects of its work to achieve efficiency savings reaching 1 billion pounds ($1.8 billion U.S.) a year by 2007/8," said Sir Richard Mottram, permanent secretary at the DWP. "We have agreed with EDS' new ways of working using wherever possible industry standard processes and best practice. Compared with present practices, we expect a better, more reliable service and substantial savings. This will make an important contribution to the efficiency savings to which we are already committed."
EDS said the deal is its sixth significant announcement in the third quarter, adding $2.2 billion to its ongoing business signings.
On Wednesday, EDS rose 12 cents to $22.10.