Intercepts

NSA Breaks Ground

The National Security Agency's announcement last week that it intends

to move forward with a 10-year, multibillion-dollar information technology

outsourcing project known as "Project Groundbreaker" has some people wondering

if the agency has learned anything about large-scale outsourcing deals from

its brethren in the Pentagon.

Congress has been pushing NSA to defrost itself from the Cold War. But

it's possible that certain parties on Capitol Hill won't view the loss of

several thousand government IT jobs as progress.

Industry observers said they hope NSA has taken a lesson from the Navy/

Marine Corps Intranet play book and will deliver a full business case analysis

before it asks Congress to fund the new deal.

"I applaud NSA's decision," said Ken Ammon, chief executive officer

of Network Security Technologies Inc. and a former NSA official. "My only

concern is pricing. My experience has been that many government agencies

set unrealistic pricing goals for the cost of IT services and receive substandard

support."

The Navy recently learned a lesson in pricing and has been forced to

"burn the midnight oil" to respond to an endless series of congressional

inquiries, another industry source said.

A source within one of the three contractors vying for the NSA deal,

which are Computer Sciences Corp., AT&T Corp. and OAO Corp., said the

lessons of N/MCI have not been lost on NSA. "They've done a better job"

than the Navy did on N/MCI, the source said.

There's No Place Like...

...N/MCI in August. Ron Turner, the Navy's deputy chief information

officer for infrastructure, systems and technology, told the Interceptor

last week that the Navy could still make its original award date of early

July for the N/MCI contract, but that it will be tough to achieve given

all of the hoops established in the March 8 Memorandum of Agreement between

Congress and the Navy.

"We could still be ready to make an award pretty much on our original

schedule. But when we look at the number of detailed answers we have agreed

to provide Congress, the Office of Management and Budget and [the Defense

Department], our completion time line is June 21," Turner said.

The Navy also has to brief Art Money, assistant secretary of Defense

for command, control and communications, in order for the business case

analysis to go forward. Turner said the Navy "appreciate[s]" the House Armed

Services Committee's proposed language in the fiscal 2001 authorization

bill for a 60-day hold on N/MCI and the requirement to have the General

Accounting Office review the Navy's business case.

"It would be unwise to not give them a chance to do that in [fiscal

2000] after we deliver all of that info to [the office of the secretary

of Defense] for approval," Turner said. " So, even though I'm not in the

acquisition chain...my crystal ball guess [on when the contract will be

awarded] is [about] August."

The House Appropriations Committee has agreed to "withhold judgment"

on N/MCI until the Navy can deliver the information.

The Great Breakup

After Judge Thomas Penfield Jackson of the U.S. District Court for

the District of Columbia decided last week to give the government the go-ahead

to erect a barbed wire fence through the middle of Microsoft's Redmond,

Wash., headquarters, my law school intercept station reports that current

antitrust laws give the software giant a better chance of success on appeal

than the Justice Department.

"I'd give Microsoft something like 63-35 odds of winning on appeal,"

said Anthony D'Amato, Leighton Professor of Law at Northwestern University.

"The original history of the Sherman Antitrust Act, at least on my reading

of it, does not show an economic motivation but rather a political motivation,"

he said.

But the government may have better odds if the case reaches all the

way to the Supreme Court, according to D'Amato.

"Translated to today's terms, the Supreme Court might actually look

at Microsoft as simply too big. Now bigness isn't a sin in itself, but

from the government point of view, it surely doesn't want Microsoft to

be a bigger player in international communications than, say, [DOD] or the

State Department. Microsoft is not there now, but who knows how big it could

grow?"