EDS, WorldCom lead chase for Ga. outsourcing

The award of Georgia's groundbreaking communications outsourcing contract has been pushed back six months so competitors can adjust their bids based on a new requirement for a data center. The Georgia Convergent Communications Outsourcing Project, originally scheduled for award this summer, will be awarded in either November or December, state officials said. The 10-year project is worth more than $1.8 billion, making it the largest state and local outsourcing deal to date.The competition has thinned to two teams from a field of five companies that were pre-qualified last October by the state to bid on the contract. They consist of some of the top systems integrators and telecommunications companies in the government market.Telecom provider WorldCom Inc., Clinton, Miss., is leading one team, called Georgia Advantage. Its partners include Accenture Ltd. of Hamilton, Bermuda; IBM Corp. of Armonk, N.Y.; and IT/TS Telecom Inc., said Natasha Haubold, a WorldCom spokeswoman.Electronic Data Systems Corp., Plano, Texas, is leading the Connect Georgia team. Its partners are AT&T Corp. of New York; Bell South Telecommunications Inc. of Atlanta; and Lockheed Martin Corp. of Bethesda, Md., said Dana Bolden, an EDS spokesman.The Georgia project is expected to include voice communications, data communications, distributed computing, video communications, high-speed data access, mobile short messaging, television and radio broadcast distribution, two-way radio and mobile data communications, according to the market research firm Federal Sources Inc. of McLean, Va."It's a very bold move on the state of Georgia's part," said Nancy Kaplan, a vice president with the management consulting firm of Adventis Inc. of Boston.Convergent communications is the bundling of telecommunications and information technology services into one contract. What sets the Georgia project apart from similar ones is that Georgia wants the winning team to be responsible for the entire telecommunications infrastructure, Kaplan said.Larry Singer, Georgia's chief information officer, said states around the country are watching the contract."It's always a point of fascination when somebody does a project this large for people to identify lessons learned from it," he said.Among the states that have approached Georgia for advice on similar projects are Alaska, New York and West Virginia, Singer said.New York is scheduled to award a statewide wireless communications contract worth about $400 million in January 2003, James Dillon, New York's CIO, told Washington Technology.The contractors chasing the Georgia contract also are seeing opportunities in other states. Nancy Collins, head of WorldCom's state and local team, said WorldCom is tracking about six initiatives that include some of the requirements of the Georgia project."We're certainly aware that other states are looking at large outsourcing procurements," said Craig Rogers, head of EDS' Connect Georgia project team.Kaplan, however, cautioned that such large outsourcing projects will spread slowly through the state and local market because of the large price tag they carry.State officials are still identifying how many state telecommunications jobs will be affected by the outsourcing project, said Michael Clark, a Georgia Technology Authority spokesman. A number of state IT employees have multiple responsibilities, he said.State officials have stressed that the winning team should retain the existing work force, and the RFP requires that the contractor retain the workers for at least one year with pay and benefits comparable to what they receive now.The three companies no longer pursuing the Georgia contract as primes are Science Applications International Corp., San Diego; Motorola Corp.; Schaumberg, Ill.; and TRW Inc., Cleveland, state officials said.TRW has withdrawn from the competition entirely, but Motorola and SAIC are participating as subcontractors, said team spokespersons. Motorola is participating on both teams, while SAIC has joined the EDS team.TRW decided not to bid on the contract in order to concentrate on public safety and homeland security projects after Sept. 11, said Brian Fitzpatrick, director of marketing for state and local governments at TRW's Civil Systems Division.The consolidation of the prequalified companies has followed a typical pattern for large outsourcing projects in the public and private sectors, Singer said. "At a maximum, we never anticipated more than four companies or teams, and when they partnered up, we expected it to come down to two or three," Singer said. "Based on the experience of other large outsourcing deals in the public and private sectors, there aren't that many firms that have the wherewithal to do it."Each team has taken a different approach to the contract during the bid process, Kaplan said. While Connect Georgia responded to the request for qualified contractors as a team, WorldCom has positioned itself as the team leader throughout most of the bidding, she said.In their bids, the teams will adjust to a revised annual cost of $182.3 million for the convergent communications outsourcing, which the state previously had estimated to be $200 million annually, Clark said. In addition, the new bids must incorporate the new requirement for a data center, which will add another $18 million to the contract, said Clark."We have been researching and refining these numbers to get them as accurate as possible," Clark said. "As the process went forward, the numbers came down a bit."The state is contracting for a new data center facility and not for data center operations, he said. However, the state plans to periodically purchase equipment upgrades from the contractor for the data center, he said.Several of the available data centers are owned by companies bidding on the outsourcing project. By combining the two procurements, state officials said they hope to avoid the appearance of giving any of the contractors on the winning team a competitive advantage if the procurement were held after the award.Among the key requirements of the outsourcing project are affordability, availability, high-speed access, reliability, security and geographic diversity, whereby the same level of service is provided throughout the state regardless of location, Singer said."Availability is one of the key service models the vendor has to reach," Singer said. "Availability is not less important in times of emergency, but even more important in times of emergency. So there's no relief [from the requirement] in the case of ... disaster."Collins said WorldCom has a wealth of experience with convergent communications and is familiar with the state government contracting from projects in Florida, Georgia, New York and Virginia. "This is right in our strike zone," she said.WorldCom chose to partner with Accenture for its expertise in applications and solutions development, IBM for its expertise with distributed computing and e-business and IT/TS Telecom for its expertise in telecommunications, she said.The EDS-led Connect Georgia team was formed almost a year ago, before the request for qualified contractors was issued, Rogers said.Lockheed Martin introduced the idea of the team, Bolden said. As the team moved forward, EDS was assigned responsibility for contact with the state and media, he said.The Connect Georgia partners were chosen on the basis of their existing resources in Georgia and their financial strength and technical expertise to meet the contract requirements, Rogers said.Rogers said EDS and its partners have successfully implemented projects that are similar in scope and size to Georgia's outsourcing project. The most obvious example is the $6.9 billion Navy-Marine Corps Intranet project awarded in October 2000."We want to play off NMCI," Rogers said.