San Diego awards IT/telecom outsourcing contract

San Diego County officials awarded a seven-year contract worth more than $650 million to Northrop Grumman to manage the county’s information technology and telecommunications services.

The county has the option to extend the contract another five years.

Under the new contract, the company and subcontractors will manage all technology services including applications, data center, desktop, help desk and network. Northrop’s subcontractors include BearingPoint, EDS and SBC/AT&T.

In 1999, San Diego outsourced its entire IT department to a Computer Sciences Corporation-led consortium to improve delivery of technology and telecom services, and to take advantage of state-of-the-art technology. That seven-year deal was worth $644 million.

The county bid last summer and its board of supervisors formally accepted the deal with Northrop recently.

Virginia-based marketing research firm Input released an analysis today that state and local governments will be outsourcing applications and systems significantly to the private sector during the next five years because of outdated IT systems and aging IT workers. A great number of IT workers are expected to retire during the next several years.