German army plans outsourcing of logistics: paper

BERLIN (Reuters) - The German army plans to outsource logistics work to domestic companies under a new 10-year contract worth up to 5 billion euros ($7.40 billion), German weekly Welt am Sonntag reported.

A preliminary decision to proceed with the plan is expected on Tuesday and the contract should be awarded by the summer of 2008, the newspaper said.

A spokesman in the defense ministry confirmed that an outsourcing of certain logistics work was under consideration.

According to the newspaper, bidders for the contract will include Deutsche Post unit DHL, Deutsche Bahn through its logistics arm Schenker, and Bertelsmann services subsidiary Arvato.

A consortium of Bremen-based Hellmann Logistics, EADS and consulting firm Accenture is also a contender.

For national security reasons, foreign firms are not being considered for the contract, the paper said.

The work includes the transportation and storage of a wide range of army materials, excluding weapons and medical supplies, both in Germany and abroad.

(Writing by Noah Barkin, Reporting by Markus Krah)