Clinton's Cyber-Security Plan Takes Shape

Horn Blasts Year 2000 Progress

Rep. Steve Horn, R-Calif., this week blasted federal agencies on their lack of progress in addressing their year 2000 software problems and called on President Clinton to address the issue in a national speech.

Horn, who has earned the reputation as the most vocal lawmaker in Congress on
the year 2000 issue, gave the government an F in his quarterly report card issued this week.

"Underlying this dismal grade is a
disturbing slowdown in the government's rate of progress," said Horn, whose last quarterly report gave the government a D.

BTG Bleeds Red Ink

Edward Bersoff, president of BTG Inc., Fairfax, Va., blamed restructuring costs for the bulk of the $35.2 million loss his company suffered during its 1998 fiscal year, which ended March 31.

Selling BTG's product division to Government Technology Services Inc., Chantilly, Va., cost BTG about $32.9 million, he told analysts this week. BTG also closed Community Networks Inc., its cable Internet venture, which has been a continuing drag on earnings, Bersoff said.

For the year, BTG had $589 million in revenue, compared to about $400 million in 1997. With the sale of its product division, analysts are projecting BTG to have about $260 million in 1999 sales.

But those revenues will be coming from higher margin services work, Bersoff said. Despite the heavy loss, Bersoff said the systems integrator is on track to return to profitability this year.

Defense Travel System Stalled

Work on the Defense Travel System contract won by a team led by TRW Inc. has been halted because of a protest filed with the General Accounting Office by losing bidder Electronic Data Systems.

The contract, awarded by the Department of Defense last month, covers development of a paperless travel authorization, reservation and reimbursement system. If the government exercises all its options, the contract is potentially worth $264 million over eight years.

"The protest will push us back on a day-by-day basis," said Cmdr. William Schworer, DTS deputy project manager. GAO is expected to resolve the matter within 70 to 100 days.

EDS maintains the Pentagon did not follow the requirements in the request for proposals, failed to engage in meaningful discussions with the company, and ignored hundreds of millions of dollars in savings represented by its proposal, said company spokesman Randy Dove.

Sterling Swallows Mystech

Dallas-based Sterling Software Inc. plans to acquire Mystech Associates Inc., Falls Church, Va., in a stock swap valued at $25 million.

The deal, expected to close in July, will give Sterling a valuable customer in the federal government - the Army. Sterling wants to expand its customer base in the intelligence and command and control markets.

Sterling has 3,100 employees and reported revenue of $489 million in 1997. Employee-owned Mystech has about 300 employees and revenues of $31 million in 1997.

Transportation Eager to Serve

The Department of Transportation and the National Institutes of Health are working on a pact that would allow the contracting office for Transportation's Information Technology Omnibus Procurement (ITOP) to provide contracting services to users of three NIH contracts. Those contracts - Chief Information Officer Solutions and Partners, ImageWorld, and Electronic Computer Store II - are open to all government agencies.

NIH does not provide services such as contract administration, aid in developing statements of work and acquisition support, said Del Berry, ITOP program manager.

Under the pact expected to be finalized by the end of June, ITOP will provide those services to users of NIH contracts for 1 percent to 2 percent of the task order value depending on the services needed. NIH charges an additional 1 percent for use of the vehicles.

Distributor Readies Stock Offer

Miami Computer Supply Corp., a computer distribution company that sells 1,800 products to the government and commercial companies worldwide, plans to raise up to $42 million from the sale of 2.4 million shares of common stock.

Proceeds from the stock offering will be used to repay debt related to eight acquisitions the company has made in the last 15 months, according to its May 27 prospectus. MCSC, Dayton, Ohio, trades on the Nasdaq National Market.

Softworks Plans IPO

Softworks Inc., an Alexandria, Va.-based company that makes business software, is going public and looking to raise $48.2 million for general corporate purposes.

The company, a subsidiary of Computer Concepts Corp., Bohemia, N.Y., plans to sell 4.2 million shares of common stock around mid-July.

SoundView Financial Group, a Stamford, Conn. investment banking firm specializing in IT companies, is underwriting the deal. Softworks has not disclosed its asking price for the shares.

The company filed its prospectus with the Securities and Exchange Commission May 29.

Sprint Shakes Things Up

Sprint Corp., Westwood, Kan., announced plans this week to offer an advanced telecommunications network that will allow customers to make phone calls, send and receive faxes and cruise the Internet simultaneously and over a single phone line.

Sprint's Integrated On-Demand Network should be available to consumers and businesses beginning in 1999, the company said.

The new system will combine voice and data transmission services over an Asynchronous Transfer Mode backbone network. Sprint said it will partner with Bellcore, Cisco Systems Inc. and Tandy Corp.'s RadioShack.

Clinton's Cyber-Security Plan Takes Shape

Using the U.S. Naval Academy commencement address as his springboard, President Clinton recently spotlighted his new policy on critical infrastructure protection.

The plan calls for creating assignments in cabinet agencies and requires compliance studies and reports with a schedule as early as 180 days from issuing Presidential Decision Directive 63 on May 22.

Recognizing the importance of critical infrastructures, the directive specifically cites telecommunications, energy, banking and finance, transportation, water systems and emergency services in both the government and private industry.

The rationale for the directive is the interdependence of infrastructures resulting from advances in information technology. These advances have created "new vulnerabilities to equipment failures, human error, weather and other natural causes, and physical and cyber attacks."

Among the goals in the directive is "an initial operating capability" no later than 2000. Also called for in each major economic sector liaison officials from designated lead agencies who will work with private sector counterparts, known as a sector coordinators.

These individuals and the departments and corporations they represent will contribute to a National Infrastructure Assurance Plan.

While all federal departments and agencies are responsible for protecting their critical infrastructures, each is called upon to appoint a chief infrastructure assurance officer for that task. This may be additional duty assigned to the chief information officer.

- John Makulowich