Range Consolidation Contracts Draw Crowd
Range Consolidation Contracts Draw Crowd
By Nick Wakeman
Major information technology players in the systems integration and services arena plan to bid on a pair of contracts potentially worth $4 billion to consolidate operations at a host of Air Force test ranges in California, Nevada and Utah.
Companies expected to field teams for the contracts include Brown & Root Inc. of Houston; Computer Sciences Corp. of El Segundo, Calif.; DynCorp of Reston, Va.; Litton-PRC Inc. of McLean, Va.; Lockheed Martin Corp. of Bethesda, Md.; Logicon Inc., a unit of Northrop Grumman Corp. of Los Angeles; and TRW Inc. of Cleveland.
"We see this as the consolidation of consolidations," said Mike Elliott, vice president of Defense Department marketing for PRC.
The Air Force is counting on cost savings and better services from rolling up into major contracts the technical support services at numerous facilities.
One contract, called the Joint Technical Test and Training Support, or J-Tech, will cover services at the Nevada Test and Training Range near Las Vegas, the air traffic flight test center at Edwards Air Force Base in California, the Utah Test and Training Range in Ogden, and the Navy's China Lake electronic combat range in California. Work under this effort could be worth $2 billion to $3 billion over 15 years, sources said.
A second effort, called the Range Support Services contract, will cover support services at the Tonopah Test Range in Nevada, Indian Springs Air Force Auxiliary Airfield in Nevada and parts of Nellis Air Force Base in Nevada. It could be worth $1 billion over 15 years, sources said.
"We'd like to win both, but so does everyone else," said Greg Donley, president of Logicon Inc.'s Operations and Services Division.
The Air Force is looking for synergies by combining the operations of the ranges, said Mike McDonough, contracting officer for the J-Tech contract. "It's easier to buy for five stores at once than to buy for them one at a time, and you get a better price," he said.
Among the services the Air Force will buy are systems integration, project management, range maintenance, systems engineering, software development and modeling and simulation. The prime on each contract also will develop the procedures for operating the test ranges together.
"The Air Force is really looking for interoperability to get these stovepiped ranges to play together," PRC's Elliott said.
Plans call for the Air Force to finalize its contracting approach by midmonth, McDonough said. A draft request for proposals is expected in early summer, leading to a final RFP by August. Proposals likely will be due in October of November, according to a tentative Air Force schedule. The contracts could be awarded in June 2000.
The pressure is on contractors, some of whom already hold contracts at the ranges, to win because of the scope and length of the contracts, company officials said.
"If you don't bid and win, you are out for a long time," Logicon's Donley said.
Austin Yerks, senior vice president of business development for CSC's defense group, said that being an incumbent is not much of security blanket. CSC is one of the largest incumbents, with nearly 1,000 employees at Edwards Air Force Base.
"If you are an incumbent with a string of 100 percent award fee awards and strong past performance, it can't hurt, but [the Air Force] already knows exactly what you have," Yerks said. "You are very visible."
Although the acquisition strategy for the contracts has not been finalized, past performance will play a major role in picking the winners, industry officials said.
Logicon, which does not hold one of the existing contracts for services to be consolidated by the service, will rely on work at other military facilities for its past performance references, company officials said.
The company has been providing support services for 27 years to the weapons ranges at Vance Air Force Base in Enid, Okla. It also won a $2.2 billion Joint Base Operations Support contract last year to provide the Air Force and NASA services in Florida.
Logicon still is reviewing whether it will pursue the Air Force range services contracts with the team it assembled for the joint base operations support contract, which runs for 10 years.
Consolidating contracts is on the upswing in the government, particularly with the Department of Defense, Yerks said.
For example, the Air Force also is consolidating range services for Patrick Air Force Base and Cape Canaveral Air Station as part of a $700 million, seven-year contract. CSC, Logicon and Lockheed Martin are pursuing that contract, which is expected to be awarded in February 2000.
"They can run one procurement rather than four or five, so there are some inherent efficiencies right there," Yerks said.
More savings are gained by outsourcing functions to the private sector, Yerks said. "If they decide to run this like a commercial outsourcing venture and use service level agreements, that is when they are really going to gain some savings," he said.
Yerks estimated that the Air Force could save 30 percent over current operating costs.
Coordinating disparate operations at the ranges will provide some of the biggest benefits to the Air Force, said Steve Kimmel, vice president of business development for TRW's Information and Technology Services unit.
"This is a unique opportunity for the government to pull together testing and training under one umbrella contract," he said. "They'll be able to make much better use of the ranges."
"The government is looking for a partner to work with them over a long period of time," Donley said.
To foster the partner approach, the Air Force will develop the requirements for the contracts with industry, McDonough said. "We are trying to involve industry very early," he said.
The Air Force also wants to use a new concept called the award-term incentive approach. This will allow the winning contractor to earn points based on performance to lengthen the term of the contract, said Sharon Fleming, contracting officer for the Range Support Services contract.
The concept is similar to the award fee approach, but instead of just earning more dollars, the contractor earns a longer contract, she said.
"We like that concept," Elliott said. "If you do well, you get to keep your work."