PLANO, Texas and STAMFORD, Conn., Nov. 28 -- EDS and Xerox Corporation today announced four major initiatives to broaden their business relationship, including an IT outsourcing contract extension for EDS and a preferred printer provider designation for Xerox. EDS today also announced it will dismiss its litigation against Xerox. The contract extension is valued at $1.5 billion for five years, including an initial service period of two years and a three-year option. Under the terms of the contract, EDS will continue to operate the Xerox worldwide computer and telecommunications network and expand the scope of services it provides to Xerox. In addition, EDS has selected Xerox as its preferred global provider of document solutions and awarded it a five-year contract valued at $50 million as part of the landmark EDS U.S. Navy Marine Corps Intranet (NMCI) contract. Xerox and EDS have also signed a memorandum of understanding to develop a formal alliance program designed to create and market integrated offerings combining Xerox's next-generation digital products and services with EDS' corporate IT infrastructure services. The alliance will target Fortune 500 customers and is expected to offer profitable growth opportunities for both companies. "In today's digital networked office, customers require the effective integration of technologies to simplify their workflow, reduce costs and improve business productivity,'' said Anne M. Mulcahy, Xerox president and chief executive officer. "Through our expanding relationship with EDS, Xerox is even better positioned to satisfy those requirements by combining our innovative digital printing technology with EDS' leading IT services.'' "The transformation of the document industry to the digital world brings the productivity enhancements necessary to improve the global economy. EDS and Xerox will combine their expertise to create joint offerings that will more closely integrate our hardware, software and services,'' added Dick Brown, EDS chairman and chief executive officer. "Both companies share a strong focus on digitization. We will continue to support Xerox's operations, and join them in developing relevant solutions for our clients and customers.'' The outsourcing agreement extends EDS' current contract up to 2009. The existing 10-year contract began in 1994. Scope of services includes support of global mainframe system processing, application maintenance, desktop and helpdesk support, voice and data network management and server management. As EDS' preferred printer provider, Xerox now serves as the primary source of document-related technologies -- including network printers, copiers and multifunction devices -- to meet EDS' internal needs as well as those of customers who use EDS for IT and document management services. Through EDS' $6.9 billion NMCI contract, Xerox will deliver and install its Phaser color and black-and-white network printers and Xerox Document Centre digital multifunction systems to about 300 military sites around the world supporting more than 360,000 sailors, Marines and civilian personnel.