IBM counting on services

The Army's Maxi-Minis and Databases-1 contract is no exception to IBM Corp.'s charge to transform itself from predominantly a hardware company to one that people will think of when they want services and systems integration.

Tim Meyer, the IBM sales manager for MMAD-1, said that agencies that purchase high-end 64-bit servers from the contract also will need engineering, installation, network connectivity and training services. "I'm hopeful that people will see we're more than a hardware company," Meyer said.

IBM compiled $33.1 billion in services revenue last year, making it No. 1 in that category, said Chris Collins, an IBM Public Sector spokesman.

Carole Dunn, GTSI's senior program manager for MMAD-1, said Army officials had estimated that 40 percent of the contract's orders would be service-related.

On its MMAD-1 contract, IBM is selling Hewlett-Packard Co. workstations running Microsoft Corp. Windows NT 4.0 and Unix, as well as IBM laser printers and servers.

IBM's competitor on the MMAD-1 contract, GTSI Corp., is selling Compaq Computer Corp. Windows NT 4.0- and Unix-based servers and workstations. GTSI received the notice to proceed on its MMAD contract in March, after winning it in 2000, and its contract has an $857 million ceiling.

GTSI's contract has an approximate value of $857 million, and IBM's is $618 million.

IBM Global Services-Federal won its five-year MMAD-1 contract in December 2000, and its contract has a $618 million ordering limit.

Both contracts feature a five-year worldwide on-site warranty, and they're open to all federal agencies. Both companies also are selling relational database software and related tools, as well as network management software and network router hardware and storage products.

GTSI would seem a worthy adversary for IBM because the Army is GTSI's top customer, according to a GTSI spokeswoman. But Meyer, a former Army intelligence officer, said he regards Litton PRC Inc.'s Navy Supermini contract as IBM's primary competition.

PRC, despite selling more than $1 billion through its Supermini contract, was not selected as a vendor under MMAD-1, which is the follow-on to Supermini. PRC's Supermini contract expires in May 2002, Meyer said.

Meanwhile, the Army Communications-Electronics Command Acquisition Center-Washington (CAC-W) is taking over the contract management for MMAD-1 from the CECOM Acquisition Center, Fort Monmouth, N.J., which awarded the contracts, said Vera Davis, division director at CAC-W. The move makes sense because CAC-W manages "about 99 percent" of the Army Small Computer Program's existing contracts, she said.