IT services firm Logica, part of the CGI group, has been selected as the supplier of managed payroll services to the Department of Health's Arms Length Bodies.
Combined, the organisations employ a total of 30,000 people and include the Health Protection Agency, the NHS Commissioning Board, and the Care Quality Commission.
Logica became part of Canadian IT services and consulting firm CGI in May after being acquired for £1.7bn.
The news will come as a relief to the IT services providers, which recently saw a contract with BAE systems terminated. An HR deal with the defence contractor was only signed in February this year.
CGI was chosen to provide payroll services via the inclusion of Logica as a sole supplier under the Government Procurement Services (GPS) framework. The firm will work alongside McKesson UK, using the Oracle-based NHS Electronic Staff Record system.
The seven-year deal brings the number of CGI and Logica payroll services clients using the GPS framework to over 90.
"The GPS framework is an extremely effective way for the public sector to both make cost savings but also to ensure a consistently high level of service across organisations," said Paula Sussex, vice-president public sector for CGI.
"Our partnership with McKesson to deliver an accurate and reliable payroll service that will allow the Arms Length Bodies to get on with their key roles in delivering the UK's health services without having to worry about a back-office function," she added.
The managed payroll services implementation with the Department of Heath will begin immediately.