BAE extension worth £500m to beleaguered CSC

Defence giant BAE Systems has signed a five-year £511m ($800m) deal with its longstanding outsourcing partner CSC, covering a full range of IT services.

CSC has been working with BAE since 1994 and the new deal replaces the existing one, which was due to expire in April 2012.

CSC will support BAE's service desk, mainframe, storage and networking, physical and virtual servers, as well as project services and application maintenance and support.

“As the defence industry continues to evolve, CSC’s expertise and support in delivering highly competitive, value-for-money services across our business in support of our strategic and operational objectives will be invaluable,” said Dean McCumiskey, BAE Systems global chief information officer, in a statement.

The deal is worth up to £102m ($160m) a year for the next five years.

The announcement will be a welcome boost for the embattled IT services giant, which has recently been pummelled due to its involvement with the ill-starred NHS IT programme.

In October, CSC confirmed it has begun the search for a new chief executive after Mike Laphen announced he will step down as chairman, president and chief executive within the next 12 months.