Georgia IT outsourcing plan at a crossroads

Georgia Gov. Sonny Perdue must decide soon whether to enter negotiations with the one remaining bidder for the state's networking and telecommunications outsourcing project after two other contenders pulled out of the competition, reports the Atlanta Journal-Constitution.

In December 2008, Perdue announced the Georgia Technology Authority was seeking two contracts worth a total of $1.2 billion to $1.4 billion and lasting five to seven years.

Earlier this year the state prequalified IBM Corp., Northrop Grumman Corp., and EDS Corp. to bid on the contract. Several months ago, Northrop Grumman dropped out, and late last month, EDS notified the authority it was dropping out.

With only one bidder for the two enormous contracts, the authority now is put in that familiar awkward position: The state can either start contract talks with IBM, dramatically reducing its negotiating power, or it can scrap the deal.

If Perdue withdraws the contracts, the authority must continue running computer networks for major state departments with what Perdue has described as "inefficient and ineffective technology."

The authority assumed it would get several bids, and it already has reduced its staff in anticipation of the outsourcing.

The two contracts for telecommunications and networking for 13 state departments and agencies were scheduled to be awarded in October.