DOD reining in software buys

The Defense Department has approved a draft version of a policy that would

direct the DOD information technology community to first consider using

existing Pentagon programs for all commercial software purchases before

orchestrating major acquisitions.

The draft version of the new policy — signed last week by Arthur Money,

assistant secretary of Defense for command, control, communications and

intelligence, and scheduled to be released within the next few days — would

make licensing agreements set up through DOD's Enterprise Software Initiative

the first choice for commercial software purchases.

DOD launched ESI in May 1999 when it awarded a $9.8 million task order to

Oracle Corp. for database software, development tools and services. DOD

also completed a second round of database awards and a series of "quick

hit" software agreements covering office automation, enterprise management,

records management and information assurance.

Word of the new ESI policy came on the heels of a massive deal between the

federal government and Microsoft Corp. The company negotiated a $20 million

deal with ASAP Software Express, CDW-G Inc., Dell Computer Corp. and GTSI

Corp. for 31,000 licenses covering its entire line of server products.

The contract represents the "single largest server deal that the government

has ever done with Microsoft and one of the largest global deals" for the

company, said John Adamson, DOD account manager for Microsoft Federal.

Floyd Groce, team leader for enterprise solutions in the Navy's Office

of the Chief Information Officer and architect of the Microsoft deal, said

the contract is the first such deal for Microsoft server products and will

"be a valuable tool for DOD customers as they choose to deploy the latest

Microsoft server technology."

"It is our entire server line-up.... We also guaranteed the DOD the

best server cost that we've ever done," Adamson said, noting that the ESI

contract offers customers prices that are 15 percent to 25 percent less

than what's available on the General Services Administration schedule.

He added that Microsoft's SQL Server software will be made available

at special promotional prices that fall at the higher end of the discount

range.

The Microsoft deal also should provide DOD with more affordable upgrades

and enhanced configuration management, Adamson said. Configuration management

is a term used to describe how organizations track changes to hardware and

software so that maintenance and operation of a system can be conducted

without major problems.

"We needed to create an upgrade vehicle for the DOD IT community to

get access to the next generation of Microsoft server technology," he said.

"This is the best upgrade vehicle for that."

He added that the contract "will help standardize the configuration for

the end users." A DOD configuration guidance agreement is also in the works.

Chip Mather, senior vice president of Acquisition Solutions Inc., a

federal procurement consulting company, applauded the role ESI has played

in boosting DOD's buying power.

"Aggregate requirements act like a smart buyer and leverage your buying

power, and you may save [several] hundred million dollars," Mather said.

"Not only do you obtain the savings, but you are now in a strategic relationship

where you are that provider's largest customer. There is a program manager

at that firm worried to death about how happy you are."