2007 saw a strong start for IT-services companies, with a flurry of $100 million plus awards in January. The biggest procurement announced was at the U.S. Defense Information Systems Agency (DISA), which selected a team of defense contractors and systems integrators to compete for work under its 10-year, $12.2 billion Encore II program to update the Defense Department’s computer systems.

The chosen service providers include Booz Allen Hamilton, CACI, EDS, Lockheed Martin, SAIC and SRA. The six vendors will compete for individual task orders under Encore II, which is intended to modernize the DoD’s legacy systems and integrate defense agencies onto a common IT environment.

Three of the ten largest deals announced in January were either renewals or extensions of older contracts. The resurgent EDS led a team of service providers that were awarded an eight-year deal of $1.27 billion with the U.K. Ministry of Defence to continue to upgrade the department’s infrastructure.

The Defence Information Infrastructure Future program will provide a single platform across the U.K.’s three armed forces, replacing the multiple systems across the military’s thousands of sites worldwide. The same EDS-led group of companies, known as the ATLAS Consortium, won the first stage of the DII (F) project in March 2005.

In Australia, Computer Sciences Corporation (CSC) extended a major IT outsourcing deal with steel products manufacturer BlueScope Steel, worth a potential $378 million. CSC will provide services including consulting, applications development and support, disaster recovery,

systems integration and end-user support across several different platforms.

In the U.K., BT Global Services extended its flagship deal in the local government sector with Liverpool City Council. The two parties originally set up a joint venture in 2001 to manage the council’s technology and call-center infrastructure, and have now extended the deal for a further five years. The extension is worth $637 million.

IBM Global Services accounted for two of the ten largest deals announced in January. The company won a $920 million contract with InfoPrint, as part of its deal to dispose off its printer division to Ricoh for $725 million. IBM also won a $197 million IT outsourcing deal with Norwegian fertilizer group Yara International to provide applications and infrastructure management services to Yara’s offices in 50 locations worldwide.

Meanwhile, HP Services has won a $175 million global IT-infrastructure services deal with aviation electronics company Rockwell Collins. HP has had a relatively strong run of services contract wins in recent months following a period when it focused on improving the profitability of its existing deals ahead of pursuing new business.