CGI-AMS wins $300 million Virginia enterprise apps deal

Virginia has awarded a seven-year contract expected to be worth as much as $300 million to CGI-AMS to implement enterprise applications across the state's business and IT systems.

The Virginia Enterprise Applications Architecture project is half of the state's multibillion dollar IT Transformation Initiative. Northrop Grumman Corp. won the IT overhaul portion in a 10-year, $2 billion contract awarded in November.

The enterprise applications project with CGI-AMS of Fairfax, Va., a subsidiary of CGI Group Inc. of Montreal, will have two optional three-year renewal periods. No dollar value was given for the option periods.

CGI-AMS will consolidate and modernize the Old Dominion's financial, human resources, supply chain and administrative management processes. The initiative initially will focus on Virginia's executive branch agencies, and could be used in the future by the judicial and legislative branches, as well as educational institutions.

CGI-AMS' teammates on the project include SiloSmashers Inc., Fairfax, Va.; Maximus Inc., Reston, Va.; and GC Services, Houston.

Gov. Mark Warner called the project groundbreaking, and the largest business process and technology consolidation project in the country.

"This agreement marks the largest effort in the country to improve business processes and consolidate technology for better business management," Warner said in a statement.

"We owe it to our citizens to help government perform more effectively and more productively, saving taxpayers millions of dollars annually, allowing Virginia to capture millions more in previously uncollected revenue and federal cost reimbursements, and increasing the transparency of these back office operations," he said.

CGI-AMS and its partners will immediately begin work on the enterprise applications initiative by deploying managed services for collections and cost recovery. The services are expected to produce revenue that will at least partially finance the program in the long run, the company said in a statement.

The project will have three phases, each of which will include performance-driven benchmarks and is subject to review, approval and appropriation by the Virginia General Assembly.

A due diligence survey and analysis conducted by the state and the competing contractors in May 2005 found that the state currently spends $308 million each year for 26 business processes conducted through 250 separate systems across 46 agencies.

When these costs are extrapolated to include the rest of the state's executive branch, they are estimated at $441 million annually. CGI-AMS has estimated a potential savings of $125 million in staffing and license/maintenance fees over the seven-year agreement.

The state's technology transformation projects were awarded using the Public-Private Education Facilities and Infrastructure Act, a law the state passed three years ago that altered the bidding process to give contractors more room to propose creative ideas and solutions. Initially established for education facilities and infrastructure projects, it was subsequently modified to include technology infrastructure as well.

CGI Group currently has about 25,000 employees, and annual revenues of $3 billion. The company ranks No. 62 on Washington Technology's 2005 Top 100 list of federal prime contractors.