The systems integration arm of Compagnie des Machines Bull SA’s Bull UK Ltd is tendering for a contract, worth around ú50m, with the English Lord Chancellor’s office, to provide a system for all the courts in England and Wales, but what will be a trial for the company is working out how it will get […]
The systems integration arm of Compagnie des Machines Bull SA’s Bull UK Ltd is tendering for a contract, worth around ú50m, with the English Lord Chancellor’s office, to provide a system for all the courts in England and Wales, but what will be a trial for the company is working out how it will get paid. The invitation to tender is part of the UK government’s Private Finance Initiative, under which the government looks for partners to share the financing and risk of a project (CI No 2,677), thereby reducing public sector borrowing, and ensuring long term committment from suppliers. In this instance, Bull has to submit a pricing structure where no money is paid up front, but the system is paid for over several years, according to the number of transactions processed. A transaction might be deemed to be a court case or some other measure of system usage. To do this, the company has to have an in-depth understanding of the business of court administration, says Brian Gunn, managing director of Bull systems integration and services. The challenge for any company tendering, he said, is to ensure that its pricing strategy enables it to recoup its up-front investment over time. Gunn believes that to meet these challenges, the larger systems providers, such as Bull, Electronic Data Systems Corp and IBM Corp, will work more closely together, perhaps sub-contracting work to each other. He admitted that this might hit smaller companies and said it seemed likely they would either be bought by larger companies, or retain a niche area of operation. Bull is also tendering for another such government contract, to supply library systems for a local authority. In both cases, the government user specifies only the output required from the systems, and the chosen company is free to decide on the necessary technology. According to Gunn, Bull’s UK systems integration business has grown by 50% this year, exceeding its targets and is profitable. So too is Integris, the company’s facilities management division. The company said that because the two divisions are so complementary, it is likely that systems integration will be merged into the Integris division by the end of the year. Bull is in the process of being privatised (CI No 2,649), which Gunn believes will only enhance the offer of the systems and services divisons. The first meeting of the new board will be in October.