DOD tests BPAs for leasing pilot

In what the Defense Department views as a stepping stone to a new era of computer acquisition, DOD's Health Affairs branch this year plans to award multiple blanket purchase agreements for leasing hundreds of millions of dollars worth of hardware a year.

If the program proves successful, Health Affairs, and potentially the rest of DOD, may expand the program to include seat management, a practice in which the responsibility of acquiring, managing and upgrading computer systems and networks is handed off to a private vendor.

In the future, "purchase will be the exception," not the norm, said Randy Koran, director of acquisition management for DOD Health Affairs. Koran guessed that his agency might spend as much as $250 million a year leasing equipment through the BPAs it intends to award to holders of the General Services Administration leasing schedules.

Anthony Valletta, acting assistant secretary of Defense for command, control, communications and intelligence, said the department is seriously considering options for leasing and seat management. If the Health Affairs program plays out well, "you will see a lot more of this taking place," Valletta said.

Last week, Health Affairs, which has close to 100,000 workstations and 10,000 servers, collected quotes from holders of GSA leasing schedules for a pilot project at DOD's Tricare Support Office in Denver, where as many as 400 workstations may be leased.

DOD expects to sign equipment leases for the Denver office by the middle of October and then apply the lessons it learns in the pilot to leasing with the planned BPAs. "This is a prototype, and we're going to learn a lot - like pricing," Koran said. He also said he hopes to have BPA offers in hand by late November and agreements inked in the first quarter of the fiscal year.

Partial Solution

However, industry analysts said federal agencies may find leasing is only part of the solution for reducing the cost of keeping up-to-date technology on the desktop.

"If you're going to view leasing as a magic pill, you're going to be disappointed," warned Joseph Pucciarelli, research director of the IT Asset Management Research Center at consulting firm Gartner Group Inc. "[Leasing] is one of the tools to create an infrastructure," but it is not sufficient in itself, he said.

Roxanne H. Dobrynski, president of Herndon, Va.-based consulting firm Federal Schedules Inc., said leasing can permit agencies to regularly replace technology that - once obsolete - can slow down agency work and impede efficiency. But bottom-line results from leasing may not show up on the books for a few years and will still depend on effective leasing and IT policy, she said.

For DOD, the endgame is seat management. "Seat management is being briefed as the ultimate objective," said Koran, who added that some vendors may include seat management in bids for DOD Health Affairs' Defense Medical Information Management/Systems Integration, Design, Development, Operations and Maintenance Service II procurement, which will provide the military with electronic access to patients' medical histories. The contract is scheduled to be awarded in the first quarter of fiscal 1998.