Government Demand
By Ed McKenna IT consulting revenues from government work swell as outsourcing projects proliferate at all levels. Over the next three years, 90 percent of government organizations worldwide will be looking to external service providers for information technology support ranging from consulting to outsourcing, according to an analyst with the Gartner Group of Stanfor
By Ed McKenna
Over the next three years, 90 percent of government organizations worldwide will be looking to external service providers for information technology support ranging from consulting to outsourcing, according to an analyst with the Gartner Group of Stanford, Conn. "IT skills are at a premium," said analyst Linda Cohen. Under continuing pressure to reduce budgets, federal or national governments will not be able to pay for the management needed for their information technology structure, she added. Donald Brown, vice president of CSC's Integrated Systems Division "Where typically in a federal bid you get a very rigid specification that everybody bids to, in this procurement the IRS has established a vision [and] a blueprint [showing] how to get from here to there," said Brown. "But beyond that, they want to bring on a partner who is capable of helping them get there." Consulting is an important component in the contract as the IRS blueprint requires the contractor "not just to automate what [the IRS is] doing now, but to actually look at the IRS in terms of re-engineering," said Brown. For this procurement, contractors must include in their initial bids a plan for doing business process re-engineering, he said. The final request for proposals will be released Jan. 15, 1998, with proposals due by May 1. Slated to be awarded in October, the entire project is expected to be worth between $2 billion and $8 billion, industry officials say. Consulting also played a key role in EDS' effort to help the Immigration and Naturalization Service streamline its border-crossing operations. Begun two years ago as part of a multi-agency effort, the task called for re-engineering the processes used to control the flow of people in and out of the United States, said Girard. Many technology changes were implemented through the project to speed up operations, he said. For example, some travelers can register with customs by simply putting their palm print on a machine, he said. "As it turned out, we were the consulting organization and have done much of the border-based technology changes," Girard added. Exclusive of the consulting fees, the project is valued at roughly $350 million over five years. "The consulting efforts involved a few million dollars over time, but it doesn't take a lot of dollars to have a major impact," he said. Also, the General Services Administration has introduced contract vehicles that allow agencies to select from a variety of pre-approved private-sector services. Under the GSA Federal Telecommunications Service Technical and Management Support Services contract, agencies throughout the government can use the services of several major vendors, including Booz-Allen. Valued at about $3 billion, the large indefinite-delivery, indefinite-quantity contract offers agencies a much wider variety of choices than if a contract shop put out its own RFP, said Doughty. Spending at the state and local level for IT consulting is expected to grow from $377 million in 1996 to $729 million by 2001, said Marianne Hedin, an analyst with International Data Corp., Framingham, Mass. Much of that spending will be for year 2000 computer software work and changes associated with sweeping welfare reform, but state governments and their agencies also are exploring ways to use IT to improve their performance and cut costs. "Like many other states with large, multiple data centers, Pennsylvania has an initiative underway to consolidate the data centers and outsource part of that process," said Thomas Davies, vice president of state and local government for Federal Sources, McLean, Va. Currently being bid, the Pennsylvania plan is based on an in-depth study by KPMG Peat Marwick LLP. Other states, including New York and New Jersey, are considering similar plans. California, for example, is now considering recommendations by Deloitte and Touche Consulting Group contained in a study of the state's Department of Information Technology data centers. At least half of the states are exploring this kind of centralized effort, but at the same time individual agencies are working on separate IT scenarios to meet their own needs, said Rob Bowell, a partner in the state and local practice at Coopers & Lybrand, Arlington, Va. For example, Coopers is helping Virginia's Department of Transportation coordinate its IT initiatives. Among other things, the department is reducing dozens of systems to a core few and building a data warehouse. Bowell said his firm is acting in a quality assurance role. The Minnesota Department of Transportation turned to IntraNet Solutions Inc., Minneapolis, Minn., for help in consolidating millions of differently formatted documents on a geographic information system-based digital library. The resulting system will be Web-based so it can be distributed to libraries outside the firewall, and documents, such as environmental impact statements, can be viewed by the public, said Keith Slater, right of way manager, Minnesota DOT Metro Division. Management solution specialist Robbins & Gioia Inc., Alexandria, Va., is helping Michigan's Department of Transportation cut time and costs associated with planning its road programs, said Jim Karwel, the company's executive vice president for business development. The firm also is involved in identifying the agency's requirements for federal dollars to support road construction within the state, he said. - Ed McKenna "There are probably 10 to 15 of these vehicles across all the different agencies," said Jack Winters, vice president of IBM global services, government industry. "We probably don't need a lot more vehicles but the thing we need is for agencies to begin to use them." And progress on that front has been slow. To date, only the Department of Education has placed a task order against the Virtual Data Center, said John P. "Pat" Ways, group vice president of business development for CSC's Systems Group, Falls Church, Va. "At senior levels of government - the secretary and deputy secretary levels - there is a great desire to put more work in the private sector," said Ways. "Where you run into problems is when you get down into midmanagement levels where there is a lot of protection of turf going on." Shying away from radical changes, agencies have been largely opting for a more tactical approach. "They really pick their spots to bring in IT consultants at the strategic level," said Debora Del Mar, vice president of business strategy at AMS. "They're trying to do it on their own and just look [outside] for people to help implement or do the detailed work," she said. "I think they really want to be more in partnership, but they don't really understand what that means. ... It's hard for them to embrace it the way it's done in the commercial world because of a lot of the legal and contractual issues." In addition, some government agencies have had trouble embracing commercial off-the-shelf technology, she said. Earlier this year, for instance, AMS pulled out of the bidding for NASA's new Integrated Financial Management Program contract because of that agency's resistance to off-the-shelf solutions, she said. However, in April, the company did land the Defense Department Standard Procurement System contract, valued at $235 million. Under the departmentwide contract, the company's Procurement Desktop product will be used at 1,000 DoD sites, she said. "The DoD is finally at a point where the rubber is meeting road for them," she explained. "We are seeing much more openness. ... There's a big job going on in the Army Materiel Command, for example, where they're modernizing their wholesale logistics program, and the Army is casting the net very wide within industry" and asking for feedback, she said. For small and medium-sized companies, Free of the "country club atmosphere" of the private market, the government has long been a fair market for smaller companies, he said. "As the procurement practices change, hopefully that element won't go away, because there is a lot of innovation and enterprise in small and medium-sized companies that needs to be fostered by the federal government," he added. Information Management Consultants is working on a number of government projects. As a subcontractor to EDS, for example, it developed the imaging application on the INS project. It also is helping the Veterans Administration re-platform its loan guarantee system to a modern architecture. Specializing in management solutions, Robbins-Gioia Inc., Alexandria, Va., has done work for the Patent and Trademark Office and the Jim Karwel, executive vice president for business development at Robbins-Gioia I/G Enterprises Inc. of West Chester, Pa., has provided electronic mail and messaging guidance to the Federal Drug Administration and Printing Office. "We are providing the Printing Office with one of our software solutions along with some consulting to help them migrate from one mail environment to another," said Tony Ioele, president and chief executive. A Microsoft solutions provider, QuickStart Technologies of Newport Beach, Calif., helped U.S. Army Fort Irwin, Calif., replace its outdated e-mail system with Microsoft Exchange Server and provided training through its technology mentoring services. "At Seal Beach Naval [Weapons Station, Calif.], we provided some Windows NT design and [Microsoft Systems Management Server] implementation strategies and tech mentoring as well," added Sal Manso, vice president of solutions consulting services at QuickStart.
For example, the IRS Modernization PRIME Integration Services Contract "is extremely open and flexible [and] different from the normal federal procurement," said Donald E. Brown, vice president of CSC's Integrated Systems Division, Falls Church, Va.
CSC photo
Currently offering similar vendor access for data center services under its Virtual Data Center program begun early this year, GSA is now considering bids for its Seat Management Program, a comparable program for the desktop environment. Contract awards are expected March 1, 1998. State government officials - deluged by high-tech problems, automation programs, outsourcing efforts and federal mandates - are staying afloat with help from the fast-growing technology consultant community.
the changes mean more opportunity, but also competition from "the big boys," said Suresh Shinoy, vice president of marketing at Information Management Consultants Inc. in McLean, Va.
Defense Department. For the latter, "we put in a solution called the Program Depot Maintenance Scheduling System, which is used to manage the overhaul and maintenance of every major weapons systems in the DoD inventory," said Jim Karwel, the company's executive vice president for business development.
Robbins-Gioia photo
IBM photo Jack Winters, vice president of IBM global services, government industry | CSC photo J. Pat Ways, group vice president of business development for CSC's Systems Group | IBM photo John Cherbini, vice president for global consulting services, global government industry, at IBM Corp. |
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