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GM Awards Contracts to Tech Companies

February 03, 2006|From Associated Press

DETROIT — General Motors Corp. awarded billions of dollars in information technology contracts to Electronic Data Systems Corp., Hewlett Packard Co. and other companies Thursday in what EDS described as the largest commercial contract bidding process in the history of the tech industry.

GM said it planned to spend about $15 billion on information technology over the next five years. About half that amount was awarded Thursday in five-year contracts, for everything from vehicle design systems to manufacturing support to global supply chain management.

GM's 10-year contract with EDS expires in June, so GM began a rebidding process two years ago. GM spun off EDS in 1996, and it has held about two-thirds of GM's business.

Plano, Texas-based EDS said it won 70% of the GM contracts it pursued, worth $3.8 billion over five years. The company had been getting $2 billion a year from GM under its old contract.

GM is expanding its business with IBM Corp. and Hewlett-Packard. HP, based in Palo Alto, said its contract was worth $700 million; Armonk, N.Y.-based IBM said its contract was worth $500 million.

Computer services firm Capgemini, based in Paris, will get $500 million for consulting and support for GM's sales and dealer systems. Wipro Ltd. of Bangalore, India, said its contract could exceed $300 million. Covisint Inc., a subsidiary of Detroit-based Compuware Corp., didn't reveal an amount for its pact.

GM shares fell 90 cents, or almost 4%, to $23.60.

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