Public sector agencies in the US dominated IT services contract activity in May 2010, awarding seven of the 10 biggest deals announced during the month.

ACS, recently acquired by Xerox, secured May's largest deal, a 10-year contract to manage California's Medicaid Management Information System (MMIS). Working alongside subcontractors IBM and CGI Group on the $1.6 billion project, ACS will provide health care services for more than seven million beneficiaries from over 80,000 health care providers across the state.

The Federal Aviation Administration (FAA) alone awarded a total of six deals in May, three of which were valued at over $200m. The largest award went to General Dynamics, which secured a $1.2 billion contract as part of the FAA’s System Engineering 2020 Research and Development/Mission Analysis Support program. Under the contract, General Dynamics will support the FAA’s NextGen modernization program, with the aim of improving safety and bringing greater efficiencies to the US airspace system by providing research and development and systems engineering services.

ITT Corp also won a major deal as part of the System Engineering 2020 project. The vendor was selected by the FAA to conduct concept development work across all dimensions of air traffic control including ground systems, avionics, aircraft, air traffic control rules and procedures, human factors, safety and security, environmental and standards. In a separate award, valued at $202m, Lockheed Martin secured a contract to develop and implement a time-based flow management program for the FAA's Office of System Operations Programs.

Away from the US public sector, and May 2010 saw Indian vendor HCL Technologies announce one of the biggest contract wins in its history: a $500m award from pharmaceutical giant Merck. The deal extends an existing relationship between the two companies, dating back to 2004, and will see HCL provide a range of services including applications support, remote infrastructure management, engineering and business and knowledge process services.

IBM’s contract with Brazilian business conglomerate SulAmerica was actually signed in April this year, but not announced until the end of May. The 12-year contract, which the vendor valued at a minimum of $200m, covers IT services, maintenance of legacy applications and construction of a dedicated service center in the city of Barueri for the client’s life and pensions insurance operation.

(Source: Ovum’s IT Services Contracts Analytics)