Army privatizes logistics, seeks new system

Having privatized the Army's current logistics system operations, Computer Sciences Corp. and the service are now seeking bids from top information technology contractors to design the Army's future logistics system. "We are going to buy a commercial service that will allow us to keep pace with the marketplace," said Larry Asch, chief of the Army's business office for the wholesale logistics modernization program. In December, the Army's Communications and Electronics Command awarded CSC a $680 million, 10-year contract to operate the service's existing system. At the same time, CSC will oversee development of a new logistics system for the Army based on commercial technology. The Army's existing logistics system relies on outdated, 1970s technology. Under the deal, CSC was required to offer jobs to about 400 Army workers who were displaced by the privatization at comparable pay and benefits for at least three years. The employees worked at Army software centers in St. Louis and Chambersburg, Pa. On July 1, 210 former Army workers became CSC workers. Among the remaining workers, about 75 will continue as Army employees to oversee the contract, 15 have taken other federal jobs and the remainder took either regular or early retirement. "Last Friday, 210 employees went home as government employees. On Wednesday they came back to the same desk, doing the same work but wearing a CSC badge," said Susan Schreitmueller, an Army manger who helped oversee the transition. The National Federation of Federal Employees agreed to drop a lawsuit in May that could have delayed the transition after the service guaranteed 13 additional Army employees could keep their federal jobs. "As we modernize, [former Army workers] will either support this effort or go into other CSC endeavors," Schreitmueller said. The contractor's next Army endeavor will be selecting a company to design the new system. CSC had prequalified three enterprise-resource planning developers-SAP, PeopleSoft and Oracle-to bid for the work. The companies will receive a request for proposals on July 7 with bids due by September. Asch said CSC would select a winner in November and have a plan in place for fielding the new system by January. Industry has closely followed the "log mod" contract because it is viewed as model for other federal IT modernization projects. The contract's provision offering private-sector jobs to displaced workers gave the Army the political cover to waive a requirement to hold a public-private competition for the work. Federal outsourcing rules, outlined in Office of Management and Budget Circular A-76, require a competition between employees and a contractor before most jobs are privatized, with the work going to the lowest bidder. The Army is the first agency to waive a competition by claiming workers did not have the technical skills to compete with industry.
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