The Ministry of Defence has forced IT services giant EDS to sign a "failure clause" before it will let the company to continue its bid for the £4bn Defence Information Infrastructure contract. EDS has signed an undertaking saying that it will hand over control of the systems to the MoD if it causes a computer failure, The Telegraph reports.

Graham Lay, EDS Defence managing director, told the paper: "If the system crashes and EDS is deemed incompetent the MoD has the ability to take the work away from us and give it to our second partner, Fujitsu."

EDS is a member of one of two coalitions bidding for the work. The project will change the way the MoD does business, uniting the back-end systems of all three armed forces for the first time. It is also the biggest IT contract ever proposed in the UK.

However, EDS has been associated with some of the most spectacular IT system failures in recent years, including the "upgrade" of the Department for Work and Pensions' computers, the Inland Revenue's fun with tax credits and the Child Support Agency email system that went so wrong, the CSA's boss was forced to resign.

EDS is heading up the Atlas consortium, along with Fujitsu and General Dynamics. Its competitor, the Radii consortium, comprises Computer Sciences Corporation (CSC), BT and Thales. Radii said in December last year that it regards the track records of its members as one of its biggest advantages over Atlas. ®

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