Navy to meld two IT pacts in $800M deal

The Navy plans to merge two high-profile information technology contracts for enterprise database and server technologies into a single contract worth $800 million.

The Navy's Information Technology Umbrella Program, which oversees all Navy IT contracts, plans to issue a request for proposals that will combine the $2.5 billion Superminicomputer contract— which offers high-performance networks, computers, software and peripherals— and the $328 million Database Machines contract— which the Navy primarily uses to purchase database products and services that will help agencies move from proprietary systems to open client/server environments.

The new contract, called the Systems and Database Technologies contract, is worth less than the combined total of the two contracts because the SDT contract includes only future requirements.

The Navy decided to combine the requirements of the two contracts because the agency lacked the resources to manage the contracts separately, and it needed to provide customers with more buying flexibility. "The requirements of the two contracts overlap so significantly that it doesn't make good business sense to continue with two separate projects," said Nikki Isfahani, program manager for SDT at the Space and Naval Warfare Systems Center.

The Navy plans to award a combination fixed-price, cost-plus indefinite-delivery, indefinite-quantity contract by the second quarter of 1999, Isfahani said. The Navy currently manages blanket purchase agreements that offer the same equipment, software and services that can be purchased off Supermini and Database Machines. But the naval agencies and offices that buy off the BPAs want to purchase systems integration services, which the BPAs do not offer and the Supermini and Database Machines contracts do, Isfahani said.

In the past, customers would have to tap different contracts to buy servers with different capabilities— an arrangement that "didn't work very well," according to Isfahani. The SDT contract, however, will target mid- to high-end servers, she said.

Isfahani also said SDT will take "more of a Database Machines approach and [will] limit [the amount] of communications equipment" offered. The Supermini contract is "very heavy in the communications area...[and] we feel we have enough communications contracts with Vivid, PC LAN+ and the Enterprise Solutions BPAs," she said.

Lauren Steinkolk, director of the Federal 500 contract program at Federal Sources Inc., McLean, Va., said, "It seems that the large contracts that were being awarded five years ago aren't going to fly anymore."

However, the Navy's choice of an IDIQ contract is strange, given the popularity of BPAs, she said. "A lot of people love BPAs because they're faster to negotiate," Steinkolk said. With an IDIQ, "it could take more than a year."

According to Isfahani, a recent survey indicated that most potential SDT customers prefer IDIQs. Also, she said, the Navy is on a fast track with SDT. "We're going to be on a very fast schedule...[and] we're hoping for an award by the second quarter of next year," she said.

Other improvements planned for the new contract include quicker and more efficient source-selection processes and a greater focus on the research and development and laboratory customers, Isfahani said.

The Navy plans to hold an industry briefing Sept. 9 to explain its plans for the new contract. "It's unclear at this point how this [new contract] is going to impact the vehicles we have in place," said Randy Belote, a spokesman for Litton/

PRC Inc. "Supermini is in place, and it [does not] come to an end until 2002." In 1997, the Navy extended the purchase period for Supermini until May 2002.

Officials from TMA Corp., which provides database machines, operating systems, relational databases, end-user tools, and training and maintenance services under Database Machines, declined to comment until the industry briefing.

Wang Government Services and NCR Corp., both of which hold Database Machines contracts, could not be reached for comment.

Once the contract is awarded, the Navy plans to make use of electronic ordering procedures to better streamline the contracting process, Isfahani said. "We fully plan to have as many functions automated as possible" by the time the contract is awarded, she said.