NIH Readies Sequel to Contract Hit

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NIH Readies Sequel to Contract Hit

In the executive offices of the National Institutes of Health, a poster depicts a soaring American bald eagle and touts the agency's governmentwide information technology contracts with the slogan "Fast to Task.''

In the case of the NIH's Electronic Computer Store contract, federal IT customers have been fast to task indeed. The contract has racked up more than $350 million in sales for 17 prime vendors since its initial award two years ago, NIH officials reported this month.

And, like any monster success, there's much anticipation for the sequel. The Electronic Computer Store II contract is expected to be awarded in the coming weeks.

With 20 to 25 prime contractors expected to be named, Electronic Computer Store II will carry an estimated value of $350 million per year over five years.

"That's a conservative estimate,'' said Patrick J. Williams, a supervisor overseeing IT contracts for NIH.

There's no doubt that NIH is on a hot streak, taking the lead in procurement reform changes to exploit indefinite-delivery, indefinite-quantity IT contracts,
industry leaders say.

In addition to the Electronic Computer Store, the agency's Chief Information Officer - Solutions and Partners contract has posted more than $217 million in sales since it was awarded to 20 prime vendors a year ago, NIH officials say.

SRA photo Jeffrey Westerhoff, vice president overseeing the CIO-SP contract for SRA International Inc.

NIH, especially with the CIO-SP vehicle, has been so formidable that it was a major factor in the decision by Steven Kelman, administrator of the Office of Management and Budget Federal Procurement Policy, to hold meetings with IT services contract officials last spring. Those meetings are expected to produce what will be called the "Mayflower'' agreement, a voluntary pact in which agencies agree to ground rules for fair competition practices. That agreement is expected to be signed before Kelman leaves office in September.

"It sounds bizarre to people that you can't murder your competitors,'' Kelman said. "My thought was to get the agencies themselves to agree to certain rules of the road that would govern competition.''

Only NIH's Image World contract, designed to provide document imaging technology to government users, has yielded modest sales, totaling $26.5 million since it was awarded to 20 prime contractors in August 1996. However, Image World is still ahead of its original estimated value of $100 million over a five-year period.

Both industry and NIH officials attribute Image World's relative slow start to the tendency of government agencies to be reluctant to adopt new technology until it's proven as a winner with other agencies. Those officials expect Image World eventually to take off.

"When the federal government is required to do less work on paper, when there are more solicitations and contracts posted on the World Wide Web, Image World will see more traffic,'' said Melanie Woodson, marketing director for McLean, Va.-based Compusearch Software Systems Inc., a prime contractor on Image World that has posted no sales on the vehicle this year.

Larry Manning, NIH contract officer for Image World, said it is simply a matter of getting out in the field and promoting the vehicle to federal customers.

"We're talking marketing,'' Manning said. "If you don't get out and make the end user aware, they won't know it's in place. Paper reduction is still relatively knew. As time goes forward, everything will be done on computer. You won't have these filing systems anymore.''

Industry and government officials cite several factors why NIH has been out in front on governmentwide IDIQ contracts: With the agency rooted in scientific advancement, contract officials seek the most state-of-the-art technology and services for its customers. Also, NIH eliminates the middleman with respect to sales on all three contracts, allowing non-NIH agency customers to deal directly with the vendor instead of an in-house contract officer.

"It speeds things up,'' said Tammy Taylor, program manager for NIH business for Chantilly, Va.-based Government Technology Services Inc., which has totaled more than $13 million in sales this year through the Electronic Computer Store. "There's better communication in terms of getting things right because you're not going through the middleman. It's up-to-date information.''

The Computer Store and CIO-SP contracts are neatly broken out as well, officials say, with the Computer Store mainly used to address hardware and software needs and CIO-SP designed to address integration, technology security, year 2000 code compliance and other solution needs. (However, CIO-SP customers can buy hardware and software off the contract as part of a solution package.)

These qualities combine for a federal customer base that is as much as 90 percent non-NIH, agency officials say, contributing a 1 percent surcharge to NIH for administering the contract.

As the agency plans to provide Internet-based IT orders through Electronic Computer Store II, NIH officials see the business as only growing.

"I don't think we've reached all the government markets,'' NIH's Williams said. "We haven't reached all the IT markets. There will still be growth and other contracts for the business. But competition is good among the agencies. It keeps prices down.''