EDS U.S. Government in Herndon won a $92 million contract from the Centers for Medicare and Medicaid Services (CMS) to administer and manage software applications that process Medicare claims in 12 states.

EDS's task order is part of the agency's migration to an "enterprise" data center approach that consolidates and connects information technology resources across all aspects of CMS operations.

CMS ultimately will reduce its number of data centers from 20 to four under the modernization initiative. Data centers are facilities that house computer and network equipment that support operation of agency programs.

Under the contract, EDS will provide application hosting and production support at its data center for about 180 million Medicare claims from states in the West, Midwest and Northeast.

EDS is one of the three companies competing for task orders under the 10-year, $1.9 billion Enterprise Data Center contract that CMS, an agency of the Health and Human Services Department, awarded last year. IBM and Companion Data Services, a subsidiary of Blue Cross-Blue Shield of South Carolina, are the other contractors.

The latest task order is the third that CMS has awarded EDS under the indefinite-delivery, indefinite-quantity procurement vehicle and will last for one year with five one-year options.

With the enterprise data centers, CMS intends to standardize how it puts in place policy changes, establish better control of IT processes and procedures and reduce security risks.

CMS said it will gradually move software applications and hosting operations for Medicare, Medicaid and the states' children's health insurance programs to the new data centers over the next five years.

EDS U.S. Government, which has about 10,000 employees, is part of EDS Corp. of Plano, Tex. The parent company has 119,400 employees and had $21.3 billion of revenue in 2006. EDS administers $8.9 billion in Medicare benefits annually and processes about 316 million Medicare fee-for-service claims each year.

Mary Mosquera is a staff writer with Government Computer News. For information on this and other contracts, go to http://www.gcn.com.