Uncle Sam Wants You ... For $1.5B HR System

Wanted: Major integrator to build world's largest payroll personnel system. Requirements: Experience in PeopleSoft solutions and knowledge of Defense Department personnel systems. "We're looking for an integrator with proven experience at implementing PeopleSoft at a corporate level, and this is one case where the government will be checking references," said Navy Capt. Valerie Carpenter, program manager for the Defense Integrated Military Human Resource System, known as DIMHRS. The long-awaited DIMHRS system, estimated to be worth between $500 million and $1.5 billion, will unify the personnel records and processes for all the military's active and reserve components. In March, the Navy Space and Naval Warfare Systems Command, the contracting office for DIMHRS, selected PeopleSoft human resource management software Version 8 to outfit the payroll system under a contract worth about $6.5 million. Now the Navy wants an integrator to put it all together. "This is going to the largest deployment of an off-the-shelf human resource software, either commercial or military," Carpenter said. The system will support 3.1 million service personnel and, during times of conflict, one-third more. It will replace at least 81 legacy systems. "It will be a challenge to orchestrate all the needs of each of the services, the Department of Defense and various agencies," said Ron Sullivan, general manager of federal government sales for PeopleSoft Inc., Pleasanton, Calif. "Bringing together the different agency guidelines, command directives, departmental policies and procedures is a huge change management task."Carpenter said integrators have shown strong interest in the landmark payroll system. Lockheed Martin Corp., Bethesda, Md.,; Northrop Grumman Corp., Los Angeles; and Computer Sciences Corp., El Segundo, Calif., have told Washington Technology they are bidding on the contract. CSC has picked SRA International Inc., Fairfax, Va., as a partner.Other potential bidders include CACI International Inc., Arlington Va., and Raytheon Co., Lexington, Mass. The request for proposal for DIMHRS is to be released no later than Jan. 2, 2002, with the final award expected around June or July 2002. On Nov. 26, the Navy delayed the release of the RFP from Dec. 10 in order to make changes in the acquisition strategy ? namely eliminate the requirement for the three finalists to build prototype systems and allow the winning contractor to select the database that will support the PeopleSoft program. "What that does is allow integrators more control over the solution," said David Kriegman, senior vice president and director, defense information systems at SRA. Carpenter would not disclose the value of DIMHRS, but Payton Smith, an analyst with research company Input Inc., Chantilly, Va., estimated the integration portion to be about $500 million. However, Smith said the bill could easily run up to $1 billion or more, given the size of the system. Paul Ryan, president of business technology services for Affiliated Computer Services Inc. of Dallas, said ACS estimates the potential contract value of DIMHRS to be worth as much as $1.5 billion. ACS is "looking real closely" at bidding for DIMHRS, either as a prime contractor or a subcontractor, he said. Although few potential bidders disclosed details of their strategies at this stage, several can tout expertise in PeopleSoft and extensive Pentagon personnel systems experience.Lockheed Martin is the prime contractor on the Navy Standard Integrated Personnel System, a PeopleSoft-based implementation that is helping the Navy prepare its records for DIMHRS. That $225 million system is scheduled to become operational by 2004. CSC is using PeopleSoft as part of its modernization program for the Internal Revenue Service and for a $6.9 million task order to modernize the Coast Guard's military pay and personnel system. SRA's Kriegman said his company is partnering with CSC in part to take advantage of CSC's PeopleSoft unit. In return, SRA will bring in its extensive experience in Defense Department personnel and payroll systems. SRA has been helping with personnel integration projects by the undersecretary of Defense for personnel and readiness and the Defense Manpower Data Center."We've done some enterprise resource planning functions, but we're not a large PeopleSoft implementer, so we were looking for a prime with federal government and commercial best practices to combine with our Department of Defense functional expertise," Kriegman said.DIMHRS sprang from a 1997 Defense Department initiative to unify the personnel system architecture of all armed services active and reserve components. This system will allow military personnel and administrators to check benefits and update records via a Web-based portal system, Carpenter said. It will allow the Defense Department to keep track of personnel as they go up through the ranks, into reserved units, retire or even re-enter into other military branches. In addition, DIMHRS will offer unit and even senior commanders instant snapshots of how well-prepared their charges are, Sullivan said."In the old world, there was a spreadsheet or even 3 x 5 cards that would rate individuals' readiness," Sullivan said. The readiness evaluations included the soldiers' skills, immunizations, dependents and availability for combat. "All of those things have been difficult to get a picture of," he said. DIMHRS aggregates that data into commandwide summaries. The new acquisition strategy memo, along with other DIMHRS related documents, can be found at e-commerce.spawar.navy.mil in the "Headquarters" folder under "Future Opportunity" as solicitation N00039-01-R-1010.