OAO Wins Groundbreaking JPL Contract

OAO photo Ed Blanchard, vice president of OAO Corp.'s desktop network support services division

OAO Wins Groundbreaking JPL Contract

By John Makulowich
Contributing Writer

In a key contract for outsourcing services that could have wide-ranging effects on future efforts, NASA's Jet Propulsion Laboratory is in the final stages of negotiations with OAO Corp., Greenbelt, Md., to assume the care and feeding of what could amount to 11,000 desktop computers and users.

The Desktop and Network Services contract, which industry officials say could be a bellwether for how customer support centers operate, is a $200 million five-year agreement with five one-year options.

Under the contract, OAO will furnish an integrated, managed solution to support JPL's varied computing environment, which includes 7,000 PCs and Macintoshes; support could extend to all JPL's desktop computers, about 11,000 seats.

For the contract, OAO formed the so-called DNS Alliance, made up of Digital Equipment Corp., Maynard, Mass.; Hewlett-Packard Co., Palo Alto, Calif.; and User Technology Associates, Arlington, Va.

Ed Blanchard, vice president of the desktop network support services division and soon to be program manager for the DNS contract, says this is the dream job come true.

"If you grew up in the IT environment like I did, this is a dream job," says Blanchard. "Not only because it's performance-based, which means we're not told how to do our jobs, but also because it's turnkey, with responsibility for replenishment and technology refreshment. I believe it's the first of its kind for the government."

Under the outsourcing contract, OAO will meet JPL's desktop computing needs with a help desk, systems administration, computer hardware maintenance and hardware replenishment, and software refreshment. The goal is to keep JPL users at the cutting edge of desktop computing.

The request for proposals appeared in the Commerce Business Daily Jan. 10 and the selection by JPL officials was made Aug. 4. Contract negotiations are expected to conclude by Oct. 31.

JPL photo Richard R. Green, deputy manager of JPL's Institutional Computing and Information Services office

Green said this work will also aid in scaling down the size of JPL, an objective of Edward Stone, the director of the Pasadena, Calif.-based NASA facility and vice president of California Institute of Technology.

"With this contract, we expect customer support to dramatically improve for JPL staff. In fact, we would like to have the desktop require no more time than a telephone does. Obviously it's more complex, but this is an approach," says Green.

Blanchard admits the proposal process was among the most rigorous evaluations he has ever undergone for a contract. It involved four weeks of due diligence and 13 hours of orals during which the entire management team was interviewed.

The key difference in this fixed-price, performance-based contract compared to the traditional cost-plus contract is that OAO will receive full price for its services, but must return money if its performance does not meet specification. Further, OAO is responsible for getting the best value in replenishing and refreshing hardware and software, not just the best price.

"When we procure equipment, we'll look at the total cost of ownership, not just the cost of procurement. There are requirements to maintain a certain level of reliability, based, for example, on mean time between failures. We will have a dedicated laboratory to test equipment and the computing environment. One goal is the highest quality equipment with the lowest maintenance costs," says Blanchard.

Two aspects of the contract are unusual: a hiring requirement and the range of performance metrics.

"It was difficult to look JPL staff in the eye and tell them we were outsourcing their jobs after their years of service," admits Green. "So we made it a condition of the contract that whoever won would be required to make job offers to JPL staffers who were made redundant. It's about 50 people."

Specifically, OAO must offer these 50 people a job that pays the equivalent of their JPL salary plus benefits for a year; they must remain on the JPL contract for at least six months; and their JPL seniority must transfer to OAO.

The range of performance metrics are required by this type of contract because of the decrement or penalty clause, which exacts a financial price if the vendor fails to deliver on service quality. Among the metrics cited by Green were the first-call abandon rate, when a customer cannot get through to service assistance. Another is the percent of problems that should be resolved on the first call, which he estimated at greater than 75 percent. A third measures the response time compared to telephone support if the problem requires on-site work.