Electronic Data Systems may have moved one step closer to making its millstone Navy Marine Corps intranet contract pay, after the company secured modifications to the service level agreements on the contract.
The company said in a statement on Friday that the changes modified service level agreements based on commercial best practices and are designed to improve the NCMI’s overall service and efficiency. The company added the new SLAs are a critical step in enabling EDS to begin billing up to 100% on individual seats.
Billed as a flagship deal when first announced by EDS about four years ago, the NMCI contract has turned into a nightmare for the services giant, with implementation problems and startup costs sending a tide of red ink flowing through its results. As of August, the deal had cost EDS about $1bn.
EDS is not detailing what the changes encompass, or what they will mean for its financials. However, it seems that some of the initial metrics being used to monitor the contract have been overly complex or vague, making it hard to consistently measure performance and move to 100% billing on seats.
Moving to simpler service level agreements that correspond more closely to the metrics used on EDS’s commercial contracts should speed up the shift to 100% billing, presumably meaning it will more quickly generate some sort of return on the deal.
A spokesman for the company refused to discuss the changes, or the effect on the company’s financials. However, he was adamant that the change doesn’t lower the quality of services EDS must deliver.