In its latest market observation on the state of the global outsourcing market, TPI Inc., said that the first quarter’s strong performance of $22.7 billion in Total Contract Value (TCV) for contracts valued at $50 million or more was up 173% year-over-year, comprising a record number of 83 outsourcing transactions.

“Re-structuring of first-generation agreements have yielded an increased impact on both the volume and the value of contracts in the broader market this quarter, with re-structuring representing 33% of the TCV signed,” said Peter Allen, Partner & MD, Market Development, TPI, Inc. “This compares to 24% of TCV during all of 2005, which was a record year for re-structuring,” he said.

Re-structuring includes re-negotiations, extensions and renewals to existing agreements. The 19 contracts re-structured this quarter were worth $7.5 billion. Contract re-structuring tended to increase the average TCV for outsourcing contracts this quarter.

BPO also experienced a distinct increase this quarter. The number of BPO transactions was up 63% year-on-year, totaling 49, which marks an all-time high for BPO contracts signed in a single quarter. In terms of TCV, this quarter was also strong with $7.3 billion in total BPO value, significantly higher than this time a year ago.

“In 2005, BPO TCV was relatively soft, but both this quarter and last quarter have shown a marked rebound, giving us the best consecutive two-quarter performance since early 2004,” said Allen.

American firms signed approximately two-thirds of all BPO contracts in the marketplace this quarter, led predominantly by the financial-services industry. Financial services account for more than 30% of total BPO contracts and 46% of the total value signed.