Three companies are finalists in Va. outsourcing deal

The state of Virginia has selected three systems integrators to advance to the next stage of review for its statewide information technology outsourcing initiative, said Lemuel Stewart, Virginia's chief information officer.

The three prime contractors are CGI-AMS, Fairfax, Va.; IBM Corp., Armonk, N.Y.; and Northrop Grumman Information Technology Inc., Herndon, Va. The companies were informed of the decision that their proposals would move to the third stage of the award process on Friday, he said.

IBM and Northrop Grumman were selected for a detailed review of their proposals for the IT infrastructure component of the opportunity, while CGI-AMS and IBM were selected for a detailed review of their proposals for re-engineering statewide enterprise resource planning components, he said.

A team led by Koll Development Co. of Dallas, which included Electronic Data Systems Corp. of Plano, Texas, did not advance to the detailed review stage.

State officials have not said how much they intend to spend on the outsourcing project, but analysts have said it could be worth $2 billion to $4 billion over ten years.

The Virginia Information Technologies Agency would award the contracts under the Public-Private Education and Infrastructure Act of 2002. The act, which was designed to encourage creative financing of education facilities and infrastructure, allows the private sector more flexibility and creativity when proposing solutions than is possible in a traditional request for proposal process, according to state and industry officials.

The act was amended last year to include contract awards for IT infrastructure.

Whether the state ultimately will award the contracts depends on the outcome of the reviews, Stewart said. "At the end of the detailed review, we will decide whether it's desirable to enter into a contractual agreement, and with whom, on the transformation effort," he said.