United Technologies Corp (UTC) is expanding its long-term IT outsourcing deal with Computer Sciences Corp (CSC) with a US$143 million contract that will now cover UTC operations in Asia and the Pacific.
In an announcement, Californian-based CSC said it will now run UTC operations in Australia, Hong Kong, Japan, Korea, New Zealand and the People's Republic of China. The new contract builds on an earlier 10-year deal signed by the two companies in 1999. Last November, that agreement was extended by five years, bringing its total value to US$3.85 billion over 15 years.
The newest deal, incorporating Asia and Pacific UTC operations, puts the overall value of the contracts at about US$3.99 billion. The deals will expire in December 2014.
Paul Jackson, a spokesman for Connecticut-based UTC, said his company has been satisfied with the work CSC has done so far since taking over IT operations.
Under the existing outsourcing contract, CSC in October laid off some 200 IT workers at UTC, including 165 workers at UTC's headquarters.
Jackson said the CSC layoffs have not affected the quality of service from the company. "If we had any reservations about their ability to perform, we would not have signed the contract [expansion]," he said. "We obviously have confidence that they can perform."
Under the latest contract, CSC will support more than 10,000 desktop computers and 400 servers at more than 400 sites throughout the Asia-Pacific region.
A CSC spokesman declined to comment.
Andrew Efstathiou, an analyst at The Yankee Group in Boston, said UTC's service expansion with CSC "makes a lot of sense . . . to have a one-stop shop, and one throat to choke" in the event of any problems.
Ali Young, an analyst at Gartner, said the continuity of working with a known vendor often plays an important part in contract expansions. "All in all, UTC is probably happy with CSC," she said.
UTC, with products that range from Pratt & Whitney aircraft engines to carrier heating and air conditioning systems to Sikorsky Aircraft helicopters, announced in June that it was embarking on a US$4.5 billion IT overhaul during the next 15 years.