DOD says SPS costs rise $100 million

Defense Department officials last week confirmed that the $326 million Standard Procurement System, a vital yet troubled part of the Pentagon's paperless contracting initiative, will need an additional $100 million to fix software problems and to sustain existing automated procurement systems.

Late last month Congress expressed concern about the program's ability to deliver on its promises and called on DOD to suspend deployment of any additional hardware, software and networking equipment needed to run the system [FCW, Aug 2].

SPS is intended to automate the often tedious and complicated process that DOD procurement shops use to buy supplies. American Management Systems Inc. won the SPS contract in 1997 and based the development of SPS on a version of its commercial Procurement Desktop software that was modified to serve the DOD contracting community. DOD plans to deploy the system to 44,000 users at 860 locations worldwide.

Gary Thurston, the SPS program manager at the Defense Logistics Agency, said he is asking for $67 million to further enhance the software with features users have been requesting.

DLA also will need an additional $33 million to sustain the Mechanization of Contract Administration Services contract payment system until SPS is ready to replace it, Thurston said. "Awaiting the fielding of these enhancements, funding for current legacy procurement systems must continue," Thurston said.

In response to SPS-related language found in the House report on the fiscal 2000 Defense Appropriations Bill, Thurston on July 29 met with members of both the House Appropriations and Armed Services committees to lay out for them the goals and timeline of the SPS program.

In addition to informing the committee "of the successful deployment to date and the road map to reach [full operational capability]," Thurston also agreed to "improve communications and refine testing processes to increase user satisfaction."

However, user satisfaction continues to be an elusive target for the SPS program.

Sources within the SPS user community, all of whom have requested anonymity because of fears of being reprimanded, continue to lash out at what they believe are significant shortfalls in capability.

According to several sources, some sites throughout the Navy and Army have experienced "enormous difficulties" getting SPS to work. Other sites have been forced to keep their legacy systems running through the end of the fiscal year because SPS problems have reduced the number of contracts they can process by up to 25 percent.

Sources also have accused AMS of charging an inordinate amount of money for configuration and training services once the system is installed. One source said the Army has spent as much as

$11 million during the past year for post-installation and training support - a figure not included in the cost of the overall SPS program. A single Navy command has spent $6 million, the source said.

AMS declined FCW's request for comment and deferred all questions to DOD.

"The Army decided to utilize the support services of AMS Inc. rather than in-house resources to expedite the learning process," Thurston said, adding that the $11 million price is not a recurring annual cost. Thurston said he did not have any information on Navy expenditures.

"Training is going to be a huge issue and may, in fact, be the central issue," said Payton Smith, manager of strategic studies for Federal Sources Inc. "SPS is different than anything [procurement officials] have seen before," he said. As far as the functional problems that users continue to report, software features are "a challenge that AMS is just going to have to overcome," Smith said.