Eight worthy contenders
San Diego County's mega outsourcing deal attracts industry heavyweights
"The last-minute discussions and mating dances are going on right now amongst some of the companies that are qualified as primes." ? John Nyland, IBM
San Diego County has qualified eight systems integrators to compete for the renewal of its seven-year, $875 million enterprisewide IT outsourcing project scheduled for award later this year.
The companies are Accenture Ltd., Affiliated Computer Services Inc., CGI-AMS, Computer Sciences Corp., EDS Corp., IBM Corp., Northrop Grumman Corp. and Unisys Corp.
The county ultimately expects to get bids from five or fewer teams, said San Diego County Chief Information Officer Michael Moore.
"Some of the companies may elect not to bid as primes and join other teams. They don't have to declare their team until they submit their bids," he said.
In addition to the primes, another group of contractors are expected to enter the fray as subcontractors, Moore said.
John Nyland, public sector general manager for IBM Global Services, said he expects to see the field narrow to three to five teams.
"We're getting fairly far along in the schedule," he said. "The last-minute discussions and mating dances are going on right now amongst some of the companies that are qualified as primes."
Nyland said IBM will bid as a prime contractor, but he declined to name its partners.
Proposals for the project are due by Aug. 30. Industry observers expect the primes to begin announcing their teams in June.
CSC is the incumbent prime contractor, and Science Applications International Corp. of San Diego is a key subcontractor on the current outsourcing project, a seven-year deal that will expire next year.
Moore said the scope of work for the county's new outsourcing contract is essentially the same as the last one, including areas such as networks, applications, desktops, help desk and data center support services. However, the focus on the new contract has shifted away from infrastructure consolidation to business process transformation, he said.
San Diego County will evaluate the teams not only on how well they can manage the county's portfolio of more than 600 applications, but also on how they plan to transform business processes associated with mobile computing, enterprise applications and back office functions.
Based on its discussions with the county and its review of the request for proposal, IBM believes San Diego County is looking for a contracting team that knows local government inside out, and can help the county improve service delivery to citizens as well as business processes, Nyland said.
"This is a very forward-thinking customer," he said. "They are trying to take their business to the next level and are looking for creative ideas and innovation to do that."
To qualify as primes, each company had to have more than $1 billion in annual sales and certify that neither the company nor its officers had been criminally charged or indicted in the last three years, nor had the company defaulted on a government contract in the same period.
They also had to have an active state and local IT outsourcing contract worth more than $20 million over the past year, and experience in two of the five IT outsourcing "frameworks": desktop, network, applications, help desk and data center support services.
The winning team will be selected Dec. 5, and the contract signed Jan. 6, 2006, in conjunction with the County Board of Supervisors' first meeting of the year, San Diego's Moore said.
CSC initially told county officials it was not going to bid again on the project when the request for information was released in February, but "had a change of heart during the RFI period," Moore said.
CSC declined to comment for this story or say whether it will bid as a prime in August.
Moore said he believed the reason the company initially wasn't going to pursue the opportunity was that it was already flush with federal IT contracting work. But the company may have changed its mind because it was so heavily invested in the project and because IT outsourcing remains a profitable business line.
"I believe it was a strategic business decision on their part," he said.
Senior Writer William Welsh can be reached at email@example.com.