DOD tries to find the right mix of control and flexibility in procurement

One of the key characteristics of the post-procurement reform era is contracting options — lots of them.

Recent years have seen a proliferation of blanket purchase agreements (BPAs), governmentwide acquisition contracts (GWACs) and multiple-award contracts. Military program managers and contracting officers have availed themselves of the choices, as have their counterparts at civilian agencies.

The military services, however, are beginning to provide more direction on when and how the vehicles are to be used. The Navy, for example, has modeled much of its

information technology requirements on its Navy Marine Corps Intranet (NMCI) pact. The Army recently formed the Network Enterprise Technology Command (Netcom) to establish IT standards and manage network configurations. The Air Force encourages buyers to use its AFWay purchasing portal.

Another push for greater control comes from the Pentagon. The Defense Department late last year stepped up its regulation of multiple-award services contracts. Some procurement experts believe the agency may seek to further rein in the services' purchasing habits, particularly when it comes to civilian contract vehicles.

"We will see a transition over the next year or so," said Catherine Poole, a principal at Acquisition Solutions Inc., a consulting firm in Oakton, Va. She predicts a greater use of DOD vehicles as opposed to civilian deals and General Services Administration contracts.

That said, military contracting is still far from monolithic. Contracting officers will continue to tap a range of contracts to meet customer requirements, according to government and industry executives. Procurement officers weigh such variables as product availability, delivery time and payment policies.

Defense directives and service-specific policies are likely to influence that decision-

making process, however. How much they

do so remains to be seen. In the meantime, the forces of flexibility and control will seek equilibrium.

Setting Standards

The ability to maintain IT standards is one reason the services want to assert more control over IT purchasing. That was among the rationales behind the $8.8 billion NMCI contract, awarded to EDS in 2000. According to the Navy, NMCI will provide an "enterprisewide network and computing environment with a standard architecture."

The contract, which had been rolled out to 59,000 seats as of February, is perhaps the most ambitious attempt to corral purchasing and achieve standards. But the impulse is surfacing elsewhere.

Netcom officials are working with the Army's chief information officer to develop a standard enterprise "infostructure" that ensures consistency in all the Army's networks. And the services' contracting organizations are developing vehicles that offer standards-compliant gear.

The Army Small Computer Program (ASCP), for example, is preparing to provide system configurations and network approaches that comply with the Army's emerging standards, according to Thomas Leahy, ASCP's deputy assistant project manager. Customers "wouldn't get that readily outside the Army program," he said, adding that the objective is to eliminate the guesswork for buyers seeking standards-compliant solutions.

In addition, the Army Contracting Agency's IT E-Commerce and Commercial Contracting Center (ITEC4) now has oversight of open-

market purchases conducted in the field, Leahy said. Such purchases will be channeled through ITEC4, which will determine whether an Army contract can meet a given IT requirement. "That will change the amount of open-market purchasing the Army will be doing," he said.

Not to be left out, the Air Force is positioning AFWay as a one-stop shop for Air Force customers. "The Air Force is moving toward the AFWay as a way of moving business through its own approved set of contracts," an IT executive said. Service officials plan to make use of the portal mandatory.

The services' efforts have a common thread: to "buy products that are similar and easier to maintain across the entire installed base," said Jack Littley, senior vice president of program and information services at GTSI Corp. The contracts, he added, have "controlled configurations" to cut down on "configurations that are hard to support in the field."

Kevin Durkin, senior vice president of sales and marketing for EDS' government solutions division, believes the services are taking a cue from the commercial sector. In the corporate environment, enterprisewide standards drive the purchase of desktop computers, networks and applications.

"Everything is standardized" so that an employee can sit down and be immediately productive, he said. "Gone are the days when every unit or group developed [its] own

applications."

Another motivation for tighter procurement control: keeping program administration dollars close to home. Some contracts have user fees that help fund the contracting organization that manages them.

"Congress is starting to ask questions about how much money is moving out of

DOD and into civilian agencies for user fees," Poole said.

The Case for Flexibility

But there's room for flexibility even in a more disciplined contracting environment, industry and government executives say. The military may want to exert control over items it plans to maintain as standard configurations, but that same rigor may not be necessary for items that are purchased only occasionally or fit a niche requirement.

That's where GWACs and BPAs play a role, according to Littley. For IT gear that doesn't need to be maintained globally, a BPA is "an easy way to get products at a good price" without going through the expense of a formal procurement, he said. Time constraints, meanwhile, may drive organizations to GWACs that have a reputation for quickly adding products to the list.

Col. Dave McKinney, director of contracting at the Air Force's Standard Systems Group, said he looks at internal vehicles first, but will turn to other sources depending on circumstances. He said the Air Force has fast-turnaround vehicles, but if a particular requirement can be better satisfied elsewhere, "we won't hold up a customer's needs."

Even the more tightly managed IT buys provide some wiggle room. NMCI's Web site states that "GSA/BPAs will remain" for items such as offices supplies and "hardware, software and services not covered by NMCI."

"There are certain services not contemplated by NMCI, including office supplies and other types of technical and warfare equipment," notes Debra Streufert, principal contracting officer in the NMCI Director's Office.

In addition, NASA's Scientific and Engineering Workstation Procurement (SEWP) III is identified as a buying vehicle, under the Navy's Information Technology Umbrella Program. In general, DOD agencies have been keen to make IT buys through such GWACs.

"They gravitate toward ones that are easy to use and have the right kind of equipment," Littley said. He noted that 60 percent of the business generated on GTSI's SEWP contract is from DOD agencies.

ASCP, meanwhile, has designated National Institutes of Health contracts as preferred GWACs. Officials signed a memorandum of understanding last year with the NIH Information Technology Acquisition and Assessment Center (NITAAC). NITAAC contracts include Electronic Commodity Store III and Chief Information Officer Solutions and Partners.

ASCP, however, is broadening the scope of its offerings and thereby reducing the Army's use of NITAAC vehicles, according to ASCP. The upcoming IT Enterprise Solutions procurement, slated for award this summer, "will answer a lot of the requirements that we had missed," he said.

The contract will encompass the service

elements of the Army Consolidated Enterprise Solutions-1 BPAs and the product orientation of Infrastructure Solutions-1 and the Standard Army Management Information Systems

contracts.

Adopting Ease of Use

Military IT vehicles, however, are not just emulating GWACs' breadth. They also are trying to adopt GWACs' ease-of-use attributes. Improving online ordering systems is a step in this direction. The Air Force has AFway, and ASCP is developing MarketPlace Direct.

"We are trying to make our marketplace more personalized and more robust," said Olga Lawrence, assistant project manager at ASCP. A version of MarketPlace Direct is now active on the program's Web site, but it will move under the Army Knowledge Online portal later this year.

GWACs also have a reputation for speed when it comes to updating contracts. Lawrence said her group is looking to improve in this area by moving toward catalog-based purchasing, for example.

But even with the services' new and improved vehicles, most observers expect the military to use a range of contracts to meet IT buying requirements. The services may well exert more control over strategic IT buys, but broader-based contracts offering an array of equipment also will play a role.

DOD buyers can expect an environment in which order and flexibility co-exist. "There's a need for both," Littley said.

Moore is a freelance writer based in Syracuse, N.Y.