Magazine article Public Finance

Relief as IT Contractor Moves Back into Profit

Magazine article Public Finance

Relief as IT Contractor Moves Back into Profit

Article excerpt

Electronic Data Systems, one of Whitehall's largest IT contractors, has eased fears about its financial health by reporting a profit - but the government has revealed it has investigated the company's finances four times over the past three years.

EDS chief executive Michael Jordan reported that the US-based company made a net profit of £28.6m in the final quarter of 2004. It was boosted by a new contract with the Ministry of Defence's Armed Forces Personnel Administration Agency and international public sector deals. In 2003, the company revealed losses of £181m for the same period.

The news came as a relief to officials at the Office of Government Commerce, Whitehall's procurement watchdog, which this week was forced to reveal that it had been closely monitoring 'financial affairs' at the company.

Following a request under the Freedom of Information Act by the Sunday Times, the OGC acknowledged it had commissioned accountants Deloitte to compile two reports on EDS.

The studies, Ranger I and II, were undertaken in 2002 and 2004. Two 'internal reports' by the OGC were also conducted in 2004.

The OGC could not, however, disclose the contents of each report 'in accordance with exemptions under the FOI Act'. …

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