Attacks Spur Changing Procurement Patterns

In the 10 months after Electronic Data Systems Corp. won the Navy-Marine Corps Intranet project, the company had installed only the first five seats in the program, as the Navy and Congress took a cautious approach to the massive outsourcing effort. But following the Sept. 11 attack on the Pentagon, the Navy used the NMCI program to quickly provide computer service to displaced personnel. NMCI contractors, for example, were able to offer computers and support in less than 48 hours to 70 Navy flag staff personnel who moved from the Pentagon to other locations in Arlington, Va., said Eric Mazzacone, public affairs consultant for the Navy program executive office for information technology.Within a week after the attack, the EDS team had put in place about 400 seats; within two weeks, 1,000 seats were up and running as the Navy worked to bring displaced workers and others online, Mazzacone said.The NMCI program is but one of many government contracts that has been forced to shift gears as a result of the terrorist attacks in New York and at the Pentagon. Industry officials report that agencies are bypassing traditional procurement procedures and, in some cases, relying on emergency procurement regulations to respond to new national security priorities.James Payne, senior vice president of government systems for Qwest Communications International Inc. of Denver, said his group is already fielding urgent requests for pricing and services."[Federal agencies] are asking in some cases ... to be more aggressive on shipping," Payne said. "We've done some of the things really out of the box and been told to worry about the paperwork later."Kay Goss, senior emergency management consultant with EDS, said the government also will want to move quickly to tap into the private sector's expertise in areas such as cybersecurity, bioterrorism and information security."Some [federal] programs have been downsized in the past, so it may take the government longer to get restarted, while over the past several years private industry has been building expertise" in these areas, Goss said."I have a feeling that a lot of programs [now in the works] are going to be accelerated, or a lot of current programs are going to be extended in 'the best interests of the government' or due to 'urgent and compelling circumstances,' " said James Fontana, vice president of corporate development and law with Getronics Government Solutions LLC, McLean, Va. Dave Nadler, a partner with Dickstein Shapiro Morin & Oshinsky LLP, a Washington law firm, said he expects increased use of General Services Administration schedules, indefinite delivery, indefinite quantity contracts, governmentwide contracts and existing vehicles."Because of unique circumstances, there is going to be a push for fast, efficient procurements through fast and efficient procurement vehicles," Nadler said. "The days of the six-month procurement cycle, at least for critical systems, are over."While some programs have been accelerated in the wake of the attacks, others have been postponed or delayed. The Navy, for example, has stepped up implementation of the NMCI program in some locations, but has slowed it down at other sites because increased security has limited contractor access, Mazzacone said.The $6.9 billion seat management program, spearheaded by EDS of Plano, Texas, will create a network for more than 400,000 sailors and Marines. The National Imagery and Mapping Agency also delayed a huge outsourcing project due to the attacks. NIMA announced Sept. 19 it would defer until December signing a $2 billion outsourcing contract with two Native Alaskan firms to take over elements of its photographic intelligence responsibilities.Rep. Tom Davis, R-Va., chairman of the House Government Reform subcommittee on technology and procurement policy, has long been an advocate of increased competition for federal contracts. His spokesman, David Marin, said the flurry of activity in different directions on outsourcing contracts, for instance, suggests a lack of strategic planning on the part of the agencies."I don't think we have a concrete answer [about procurement changes] other than agencies are struggling to get a better handle on their IT resources and needs after Sept. 11," Marin said. "Some agencies are halting all outsourcing to take stock of their needs, and others, such as the Navy, are rushing forward with outsourcing to try and meet their technology needs. Overall, these changes highlight the need for better acquisition planning."Bruce Leinster, director of contract relations and acquisition policy with IBM Corp., said agencies are making purchasing decisions on the fly."I think agencies are going to ask companies to provide what they need and worry about the contracts later," he said. The agencies won't get a completely free hand, Leinster said. They will have to come back and be able to justify their actions within the exceptions in the acquisition regulations.Marin said he wouldn't be surprised to see some sole sourcing in the name of national security. "Right now, the sole criterion should be what is in the best interests of America," he said.XXXSPLITXXX-The federal government will spend more than $75 million on replacement hardware and services as a direct result of the Sept. 11 terrorist attacks, according to Input Inc., a Vienna, Va.-based IT market research company. And many of these items are already being shipped, thanks to the Defense Priority Allocation System, a federal program requiring U.S. companies to respond with higher urgency and priority to orders considered crucial for national security. Ingram Micro Inc., a wholesale distributor of microcomputer products in Santa Ana, Calif., has seen an influx of Defense Priority Allocation System orders since the attacks."We're seeing about six to 12 DPAS orders a day," said Robert Laclede, Ingram Micro's vice president for government and educational sales.For distributors, an emergency DPAS means taking a product out of a commercial order and shipping it to the government instead. For manufacturers, Laclede said, this may even mean refitting the assembly line to produce more of the required item. "If it's a common order that's in stock, we don't even record that it was a DPAS order," Laclede said. "For an order of, say, a hundred printers, if the back stock is in the thousands, they'll go out on the next truck anyway." Since Sept. 11, Ingram Micro has seen increased orders and inquiries from the government for videoconferencing systems and wireless technologies such as two-way pagers and personal digital assistants. But the highest demand has been for security products, such as firewalls, fingerprint identification devices and software."The security products are way up in sales," Laclede said.