Army Awards HP Three-Year Deal

Hewlett-Packard Co. said Wednesday it won a three-year contract worth as much as $500 million to provide the U.S. Army with computer equipment and services.

The Army will purchase an array of PCs, notebooks, server computers, printers and software, and HP specialists will be responsible for installation, equipment maintenance and other service functions, according to a statement by the Palo Alto-based computer giant. The contract includes options for two two-year extensions.

The Army is in the midst of a program to integrate its various computer systems. Last week it granted Dell Inc. an order for computers, software and related services that could be worth as much as $500 million to the Round Rock, Texas-based PC maker.

“The Army is addressing many of the same challenges facing commercial enterprises today,” said HP, which was awarded its first military contract more than 60 years ago.

HP officials have welcomed business from the government in the face of weak spending from corporate customers. Anne Livermore, HP’s executive vice president for services, said in July that the $70-billion market for supplying computer systems and services to the government was expanding three times faster than the information-technology industry as a whole.

HP and its main rivals -- Dell and IBM Corp. -- are fighting aggressively to land big-ticket contracts as the economy remains sluggish.

In May, HP announced a 10-year, $3-billion deal to manage the computer infrastructure of consumer products behemoth Procter & Gamble Co. It was one of HP’s largest technology outsourcing projects ever.

HP shares gained 24 cents to close at $19.60 on the New York Stock Exchange.

Bloomberg News contributed to this report.