BAe contracts out its computer networks

BRITISH AEROSPACE plans to contract out the management of the computer networks in its aerospace businesses to Computer Sciences Corporation, the world's largest provider of such services, early next spring, writes Rupert Bruce.

Assuming a successful conclusion to the negotiations, BAe will pay a total of about pounds 900m over a 10- year period, the largest sum ever paid in Europe for an outsourcing contract.

As the agreement stands, CSC will pay BAe pounds 75m in cash when the deal is signed for its computer hardware, software and a number of building leases. It will also take on BAe's 1,250 information technology staff.

A spokesman for BAe said the move was part of the drive to cut costs. After a review of information technology across the aerospace businesses, management had decided it would be cheaper and more effective to use a specialist, he added.

The other divisions will continue to manage their information technology in-house.

CSC is part of the US group of the same name which is the largest provider of computer management services - known as 'outsourcing' - information technology consulting and systems integration to industry and government worldwide. It has experience of information technology in the aerospace industry after winning a dollars 3bn contract with the US company General Dynamics in 1991.

CSC employs more than 27,000 computer specialists worldwide and has revenues of dollars 2.5bn.