What's hot in 2003?

Projects to watch


Information Technology

Enterprise Solutions


Agency: Army

RFP: February

Value: $500 million over five years

Purpose: Consolidate the requirements of the Army Small Computer Program into an enterprise solutions contract vehicle. The contract will have multiple winners in two areas: hardware and mission support services. The contract will consolidate several existing contracts, including the Consolidated Enterprise Solutions blanket purchase agreements, the Infrastructure Support I contract and the Standard Army Management Information Systems Computer Contract II. Incumbents on these contracts include Computer Sciences Corp., Electronic Data Systems Corp., GTSI Corp., Telos Corp. and Unisys Corp.

 

Global Information Technology Support Services

Agency: Veterans Affairs

RFP: February

Value: $3 billion over 8 years

Purpose: Create a fast and flexible contract vehicle for VA and other agencies to use to acquire IT services. Ten companies will win contracts, with three of those being small businesses.

 

Air Force Full Range of Information Technology Services

Agency: Air Force

RFP: June

Value: $500 million

Purpose: Provide strategic outsourcing of unclassified and classified mission essential information technology services to Department of Defense users in the National Capital Region. The length of the contract and the structure of the competition have not yet been determined.

U.S. Entry-Exit System

Agency: Justice Department

RFP: April

Value: $380 million

Purpose: Build a system that can verify and record the identities of people who enter and exit the United States. The system will be used by the departments of Justice, State, Treasury and Transportation and integrate with 26 legacy systems. The length and structure of the contract have not yet been determined.

 

Starlight

Agency: Justice Department

RFP: January

Value: $1.2 billion over five years

Purpose: A multiple award contract that is available to all government agencies. The Immigration and Naturalization Service has been the primary user of the contract, which offers a broad range of IT services. Starlight will replace the Service Technology Alliance Resources contract held by CSC, EDS, Lockheed Martin Corp. and Science Applications International Corp.

 

Broad Information Technology Services II

Agency: Transportation Department

RFP: February

Value: $1.2 billion over five years

Purpose: A multiple award contract to provide a broad range of IT services to government agencies. BITS II is a follow on to BITS, which is held by 15 companies.

 

*These projects are listed according to the number of hits each receives on Input Inc.'s database of government contracts.

These are the markets that spurred companies to make acquisitions, restructure operations and invest new resources. Here's where IT executives expect to make money.

HOMELAND SECURITY

This hasn't turned into the booming market that everyone first predicted and, except for a few large projects at the new Transportation Security Administration, there haven't been many high-dollar programs.

But the promise remains. The Homeland Security Department alone will spend $2.1 billion on IT in fiscal 2003, and that doesn't count new initiatives. Other agencies are spending money to shore up their own security plans. Plus there is the $3.1 billion earmarked for the states in fiscal 2003, a good chunk of which involves IT and communications upgrades.

More spending is sure to come. The growth isn't sky rocketing, but in this day and age, steady, predictable growth qualifies as a hot market.

And there are numerous opportunities that are byproducts of the homeland security push. During the Persian Gulf War, for example, many reservists were called to active duty, which put a strain on families. As part of the war on terrorism, reservists again are being called up in large numbers. So that there isn't a repeat of some of the problems from a decade ago, the Army Reserves and the National Guard have contracted with Resource Consultants Inc. to provide family support services, including counseling, predeployment services and other services during and after deployment.

The contracts are worth several million dollars a year. "It is an interesting and unexpected sidelight to homeland security," RCI's William Warren said.

OUTSOURCING

Several factors are coming together in 2003 that will make outsourcing a stronger market opportunity.

First is the Bush administration's Management Agenda, which includes two initiatives -- human capital management and competitive sourcing -- that should promote more outsourcing. Second, with the increasing rates of retirement of its workers, the government will need more help from the private sector. According to the management agenda report, about 71 percent of the government's employees are eligible to retire, and 40 percent of those are expected to retire.

The proposed A-76 rules also will make competitions between the government and private sector easier and faster.

There also is a trend, which is being reinforced by the management agenda, of the government looking to outsource more business processes rather than just administrative and support functions.

"There is a transformation of government under way," said CSC's Paul Cofoni.

SMALL BUSINESS

The Bush administration is taking steps to curb the growing practice of bundling smaller contracts into larger ones. The White House released a policy in October calling for the unbundling of large federal contracts where possible and, when bundling is justified, for agencies to strengthen subcontracting goals.

The Small Business Administration and General Services Administration also are working to close a loophole that allows large businesses to retain the small business designation, even if they've outgrown the criteria, as they win option clauses on long-term contracts, such as the GSA schedule.

Under the direction set by the administration, large businesses will have to be more of a "true partner" to their small businesses, said James Bogarty, vice president and chief operating officer of American Technology Services Inc., Reston, Va.

"That's a good change, but I don't think we'll see the full affect until 2004," he said.

SPACE

When Northrop Grumman acquired TRW, the Los Angeles-based defense company picked up major new capabilities that created "a third major player in the space marketplace," according to Vance Coffman of Lockheed Martin, which along with the Boeing Co. have been the dominant space players.

Space will be integral in satellite communications, missile defense and remote sensing, Coffman said. The Navy and Air Force are working on next-generation systems for satellite communications and global positioning systems that are likely to be multibillion-dollar projects.

The market potential is attracting the attention of other companies that don't launch satellites.

CACI has been one of the more aggressive acquirers of companies in areas such as network services and information assurance, and now CACI is setting its sights on space-related businesses, J.P. "Jack" London said. *

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