Unisys Corp. has won a follow-on contract potentially worth $128 million from the Defense Department to continue radio frequency identification tracking for the worldwide military logistics supply chain.

Unisys of Blue Bell, Pa., said providing almost instant visibility of the location of shipments enables the military to more quickly dispatch critical supplies to soldiers, focus on mission-critical activities and respond rapidly to mission changes.

Unisys has been working with DOD for 13 years to develop and enhance an in-transit visibility system utilizing RFID technology.

The four-year contract is worth roughly $28 million in the base year and about $112 million if all options are exercised and DOD continues to order time and materials work at the current level, Unisys said.

The contract also provides for additional fees if performance benchmarks are exceeded and penalties if they are not met on time.

Unisys said it tracks about 125,000 DOD truck, rail, ship and air shipments each week, which include ammunition, food rations and water, medical supplies, vehicles, parts and aircraft. Each shipment has an RFID tag that stores information vital to military personnel.

Fixed and hand-held readers send and receive radio signals to and from the tags. Because data written to each tag is replicated on five servers, users worldwide have access to the same information on each item, the company said. Consequently, decision-makers at all levels of command and throughout the supply chain can collaboratively plan, prioritize and redirect shipments as needed.

Unisys is being assisted by partners L-3 Communications Corp. of New York and WFI Government Services Inc. of San Diego.

Unisys has 31,500 employees and had $5.6 billion in revenue in 2006. The company ranks No. 27 on Washington Technology’s 2007 Top 100 list of the largest federal government prime contractors.