Spy agency extends massive contract for IT support

The National Security Agency is planning to exercise the remaining option years of a $2 billion contract for information technology support services signed six years ago with a group of companies.

In an announcement Wednesday, the El Segundo, Calif.-based Computer Sciences Corp. said its Eagle Alliance joint venture has received notification that NSA plans to exercise the final three years of the contract, known as Groundbreaker. The value of the extension is $528 million. The group's work on the contract will continue through Sept. 30, 2011.

The team of more than 50 companies, which includes Northrop Grumman Corp., Raytheon Systems Corp. and BAE Systems, operates NSA's IT infrastructure. This includes telephone services, network services, computer support and security management at the agency's headquarters and offices.

"Exercising this option underscores NSA's confidence in the Eagle Alliance's experience and ability to deliver state-of-the-art information technology solutions that result in sound operational performance for the agency," said James Sheaffer, president of CSC's North American public sector business unit.

Groundbreaker is one of the largest IT outsourcing efforts the federal government has undertaken. The project was launched in late 2001, when 750 workers who provided IT support for the agency moved from being federal employees to contractors.

"Outstanding customer service is the hallmark of Eagle Alliance's strategy with Groundbreaker," said Tim Slusser, vice president of the Eagle Alliance. "We look forward to continuing to provide world-class, innovative technology solutions to the NSA."

According to CSC, more than half of the work goes to small businesses.

Groundbreaker was one of several management reforms implemented by former NSA director Air Force Lt. Gen. Michael Hayden, who now directs the CIA. At the time, he cited concerns that the agency would not be able to continue its mission of collecting electronic intelligence without making changes. He also said the agency could no longer afford to employ workers for basic technical tasks such as maintaining e-mail systems and operating help desks.

In more recent years, other agencies also have been working to outsource their back-end IT systems in an effort to improve efficiency and performance. At the Housing and Urban Development Department, for instance, contracts with Electronic Data Systems and Lockheed Martin Corp. each worth $400 million have reduced infrastructure expenses 20 percent and cut the department's IT staff from 385 to 280, officials have said.

But the Internal Revenue Service announced in November 2006 that it would not go forward with a public-private competition for computer service jobs. The contest was going to be conducted under the rules in the Office of Management and Budget's Circular A-76 and could have encompassed more than 2,000 positions.