GSA to end seat task order

Agency rethinks desktop outsourcing

GSA FTS Seat Management

Officials at the General Services Administration, one of the federal government's biggest champions for desktop outsourcing, decided this month they would not extend their own task order under the agency's governmentwide Seat Management contract.

Officials have not determined what contract will replace its Seat Management task order, said Michael Carleton, GSA's chief information officer. GSA manages one of two multibillion-dollar contracts that agencies can use to outsource hardware, software, help-desk and desktop support services.

The decision represents a major shift from GSA's initial plans when the agency's CIO first awarded the task order to PRC Inc. in December 1998.

Officials issued that task order for three years with seven one-year options and initially valued it at $114 million for 2,500 seats within the Federal Technology Service and GSA headquarters. They planned by now to have expanded seat management agencywide to 14,000 seats for about $600 million.

"The fact that we're only that far along implies that people don't believe this is the best way to go," Carleton said.

GSA sources said a full rollout of desktop outsourcing never occurred because the individual GSA offices believed they already had adequate support for desktop services and were skeptical about what would happen to networks if they turned them over to an outside vendor. Ultimately, the agency did not provide enough direction from the top, sources said.

Among other options, GSA officials are considering allowing individual organizations in the agency to decide how to buy support services. Staff in the CIO's office have developed a baseline set of service-level agreements that must be built into future support contracts.

GSA contracting officer Lydia Dawson wrote a letter to PRC dated May 16 informing the company that the agency would not extend the task order when the initial term expires this December. She directs the company to submit by July 2 a transition plan that ensures that GSA employees are not disrupted by the transfer.

PRC is not solely to blame for the failure of the task order, said Charles Self, deputy commissioner of FTS.

Self helped create the Seat Management contract while he was FTS assistant commissioner for IT integration. He said GSA officials moved too quickly to award the task order and did not consider all the factors that agency managers should examine before moving to a contract that would disrupt long-established contracts and IT management practices.

After awarding the governmentwide Seat Management contract in 1998, GSA officials felt pressured to quickly award a task order to show other agencies that the new concept could work, sources said.

Many were skeptical about seat management from the beginning because it would replace management policies and require cultural changes, employee buy-in and service-level agreements for vendor performance. None of that really happened at GSA, according to a GSA official. GSA and PRC, which was acquired by Northrop Grumman Corp. in December 2000, had different expectations for the contract, but now "I believe that the customer has a better handle on their requirements," said Bob Koch, director of corporate communications at Northrop's Logicon Inc. unit. PRC will merge into the Logicon subsidiary next month. Logicon will draw on the resources of the larger company to compete for replacement contracts, Koch said.

Although GSA's decision is not a "nail in the coffin" for the seat management concept, it could hurt the potential for new task orders on the FTS Seat Management contract, said Paul Wohlleben, a partner at Grant Thornton LLP and a former senior government IT official.

Officials at GSA, PRC and other companies argue that decisions should come on a case-by-base basis. Agencies should look to GSA for lessons on "how to do it well and how not to," Carleton said.

But industry and government officials said managers at several agencies are unhappy with the performance of their Seat Management task orders, too. "The results of seat management contracts in the government have, at best, been mixed," said Chip Mather, senior vice president of Acquisition Solutions Inc.

Dan Caterinicchia and Christopher J. Dorobek contributed to this story.

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