Attention in Washington often focuses on big federal contracts. But Electronic Data Systems Corp., the Plano, Tex., company that has its government solutions division in Herndon, knows there's big money in state government, too.

Today, EDS will announce it won a $73 million, seven-year contract to design, implement and maintain a Medicaid management information system for Oregon.

Medicaid makes up a sizable chunk of every state's budget. Oregon's system, for example, provides health care benefits to 600,000 residents through 31,000 providers. The state has to process more than 26 million Medicaid-related transactions a year.

Many states have handed over administration of Medicaid to contractors, which has created a small, but competitive and lucrative market for this work. The big players are EDS, Affiliated Computer Services of Dallas and Unisys Corp. of Blue Bell, Pa.

ACS does Medicaid systems work for 22 states, including Colorado, Mississippi, Georgia and Texas, said Joe Barrett, an ACS spokesman.

With the addition of Oregon, EDS manages Medicaid for 18 states. "We process more than a billion claims a year," said Bill Ritz, an EDS spokesman.

Unisys is the fiscal agent for four states. "There's some active bids going on, and some big contracts coming down the pike," said Susan Beck, a Unisys spokeswoman. "We contend we're a strong player here."

-- Elissa Silverman

With the addition of Oregon, Electronic Data Systems now manages Medicaid systems for 18 states. EDS, based in Texas, has its government solutions division in Herndon.