DLA taps Andersen for systems revamp

A hot competition to modernize information systems at the Defense Logistics Agency ended Aug. 10 when the agency tapped Andersen Consulting to provide up to $389 million in systems integration services for the Business Systems Modernization program.

BSM is designed to allow the agency to achieve its long-range business objectives (see sidebar) while also supporting improved military readiness through rapid access of logistics information.

The first focus is to replace the agency's primary materiel management systems, including the Standard Automated Materiel Management System and the Defense Integrated Subsistence Management System. Other legacy systems will follow.

"The BSM contract is a key enabler for us to get our re-engineered processes in order for the next century and is really about re- engineering the way we do business more than anything," said David Falvey, BSM program manager.

An example of industry best practices that the agency will adopt under the program is taking greater advantage of World Wide Web-based business-to-business capabilities, Falvey said.

Along with Andersen, an $8.3 billion global management and technology consulting company, the competition drew heavy hitters such as Electronic Data Systems Corp., Hewlett-Packard Co., Computer Sciences Corp., IBM Corp.'s Global Systems division and Price WaterhouseCoopers. The competition closed after a tough fight between Res-ton, Va.-based Andersen and Plano, Texas-based EDS, said sources close to the process. Officials at Andersen were unable to comment by press time.

Andersen will receive an initial $38 million and the rest if all contract options are exercised. The entire implementation is expected to take five years. "We were obviously dealing with top-tier integrators," Falvey said. "We made the selection based on the best-value proposal for the agency from a technical and business standpoint."

"This effort will provide us with the necessary leading- edge technology to allow us to focus on our core business: supply chain management," said Rear Adm. Ray Archer, DLA vice director.

In addition to systems integration services, the contract with Andersen includes enterprise resource planning and other software license costs, software maintenance and training.