DOD inches toward $1B SPS contract

The Defense Department is close to awarding the $1 billion Standard Procurement System although the Pentagon now appears likely to miss its March target for awarding the contract.

SPS is intended to provide DOD contracting offices with a standard procurement application that takes advantage of commercial off-the-shelf software and open-systems hardware. By current estimates DOD operates 76 procurement systems some based on 1970s mainframe technology. The transition from these legacy systems to SPS will take three to five years DOD estimates.

American Management Systems Inc. and DynCorp are competing for SPS.

"It's a tremendous opportunity " said Zipora Brown a vice president with AMS' Management Systems and Technology unit. AMS is thought to be basing its SPS bid on its Procurement Desktop automated acquisition software [FCW Sept. 2 1996].

DynCorp meanwhile is bidding a system based on software the company developed for the Naval Sea Systems Command. DynCorp officials could not be reached for comment.

DOD last August selected AMS and DynCorp to compete for the development and deployment of SPS. The companies have spent the past few months demonstrating and validating their solutions. An award is now likely in mid- to late April according to sources close to the contract.

The potential scope of SPS includes about 1 000 sites worldwide but some observers question whether the system will be widely accepted. CACI Inc. which markets its own procurement package dropped out during the early stages of the SPS procurement citing concerns over financial and user support for SPS. CACI questioned the "funding or commitment on the part of DOD and DOD users " said Harry Quast executive vice president of business development at CACI. He added that SPS has not been an "inhibiting factor" in marketing CACI's procurement solution.

Others wondered whether SPS would take into account the sweeping changes in federal procurement that have introduced credit card purchasing and on-line catalogs. "The big question mark is whether this SPS is the right system for DOD procurement in light of all the changes from FASA FARA [and] Clinger-Cohen " said one analyst who requested anonymity.

On the other hand DOD downsizing has increased the need for automation in contracting shops. In a February memo Elliott B. Branch executive director of acquisition and business management in the Navy's Office of the Assistant Secretary for Research Development and Acquisition wrote that the "Navy's acquisition community is the least automated of the three services and therefore will realize the greatest benefit from early implementation of SPS." The Navy expects to field SPS at 300 contracting sites.