BAE Systems, a defense, security and aerospace company, has awarded a seven year procurement services contract to Xchanging, a business process and technology services provider. As part of this innovative arrangement, Xchanging will provide sourcing and supply base management services for $800M of BAE Systems, annual indirect procurement spend across most categories of indirect goods and services including Information Technology and Telecommunications, Transportation, Contract Labor, Industrial Supplies & Services, Utilities, some Professional Services and others. Xchanging will also provide procurement management activities related to reporting, supplier and contract management. The contract runs through July 2018 with an option to extend for an additional three years by mutual agreement.
Procurement service providers like Xchanging can help customers drive sustainable improvement in supplier costs and process efficiencies associated with the procurement process. The contract reflects Xchanging's strategy to establish a presence in the global procurement services market.
"We consistently seek opportunities to reduce cost, improve efficiency and increase speed to market," said Dennis Bent, Vice President Strategic Sourcing, BAE Systems. "Outsourcing indirect procurement to Xchanging enables us to access top procurement talent supported by a proven approach to sourcing that will provide value to our business."
Scott Dever, Managing Director for Xchanging Procurement Services in the Americas, said, "We are excited to be adding BAE Systems, Inc. to our broad customer portfolio and we are proud to be associated with such a high-performance, professional organization. This agreement opens up tremendous opportunities for growth and establishes Xchanging as a strong provider of procurement services in the Americas."
Ken Lever, Xchanging CEO commented, "We are delighted to extend our relationship with an existing customer of Xchanging. This contract not only enables us to deliver value to BAE Systems, Inc, it also acts as a springboard for Xchanging Procurement Services in the fastest growing procurement outsourcing market globally."
Source : Market Watch