Surveying the Changing Landscape
y all accounts, it has been a landmark year for federal information technology (IT) managers. Besides dealing with computer industry trends such as business process reengineering and moving from mainframes to desktop machines, IT executives have grappled with issues raised by the National Performance Review, the Republican Revolution, government shutdowns, procurement reform and electronic commerce-not to mention a string of IT directives from the Office of Management and Budget and procurement legislation. For many federal executives, the events of 1996 will change forever the way information technology is acquired and implemented.
Throughout government, mainframe legacy systems are being replaced with modular, commercial, off-the-shelf, client-server systems. Likewise, gigantic, single-source procurements are being replaced with multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contracts. In addition, government buyers now can purchase professional IT services directly from General Services Administration schedules much as they would buy any equipment.
"The age of the single-source contract is gone," says Manny De Vera, director of the National Institutes of Health IT Acquisition and Assessment Center. De Vera's observation echoes the sentiments of many in government who see multiple-award IDIQs as the wave of the future. In a $100 million award last August, for example, NIH awarded the Chief Information Officer Solutions and Partners contract to a record 20 firms-all prime contractors.
Another multiple-award IDIQ contract, the Defense Information Systems Agency's DEIS II program, soon will start pumping $3 billion into six major defense contractors-BDM, Boeing, Computer Sciences Corp., Electronic Data Systems, Lockheed Martin and Unisys-along with a whopping 245 subcontractors. Boeing alone has lined up 48 subcontractors to help it pursue DEIS II work.
Thanks to the enactment of this year's Information Technology Management Reform Act (ITMRA), which repealed the 30-year-old Brooks Act, agencies have more flexibility when acquiring IT services. Both purchasing thresholds and GSA procurement oversight built into the Brooks Act were eliminated under the ITMRA.
In addition, the law did away with the GSA's Board of Contract Appeals and its special protest jurisdiction, much to the consternation of some government contractors. This was a thorny issue because the government wanted to make sure that proper contracting procedures were followed for every award. However, contractor protests were tying up procurements for months and even years. Under the ITMRA, protests now will be handled by the General Accounting Office and the federal courts.
The ITMRA also created the chief information officer post for federal agencies, a position that has been popular in private industry for years. To bolster the importance of the position, President Clinton signed an executive order creating a deputy CIO. These new positions are expected to make outsourcing easier for agencies, since more authority is being shifted to the IT shops.
The prospect of farming out information technology services has been raised by every administration since 1955. However, the government has lagged behind in the outsourcing movement for various reasons. First, there is no standard definition for outsourcing, and there are many variations of the practice, ranging from contracting partnerships to wholesale privatization.
Outsourcing also has many negative connotations, especially when offered up in its most extreme form: privatization. When some government workers hear the word outsourcing, they assume their organizations or their jobs will disappear. Consequently, the word "outsourcing" is often replaced with euphemisms such as "rightsizing" and "reinvention reegineering."
"There's always a groundswell of support for not outsourcing core functions," says Ken Johnson, chairman of the Industry Advisory Council and president of Cordant. "But the savings associated with IT outsourcing will make the strategy attractive to more government managers."