AMS winsDOD-wide,$238M pact

The Defense Department has given the nod to American Management Systems Inc. to field a DOD-wide procurement automation system valued at about $238 million. Under DOD's Standard Procurement System AMS will provide procurement software software support and related products and services.

DOD last August awarded contracts to AMS and DynCorp to demonstrate competing SPS solutions. After a seven-month evaluation DOD last week notified AMS that it would extend the company's initial contract into implementation.

The intent of SPS is to provide a DOD-wide solution for procurement automation based on commercial off-the-shelf technology. Mike Long a vice president and SPS program manager at AMS said the award could signal a trend toward COTS products for business applications.

"DOD has made a conscious decision to buy COTS for a business application " Long said. "It's probably the beginning of a trend toward using commercial products to support business applications" within large federal agencies.

AMS based its SPS bid on the company's Procurement Desktop-Defense product. That software product already is in use within DOD at sites including the Naval Air Warfare Center's Weapons Division and the Naval Facilities Engineering Command. The product supports Microsoft Corp.'s Windows 3.1 and Windows 95 on client devices and nine server platforms including multiple flavors of Unix and Microsoft's Windows NT.

Although the contract is designed to support DOD-wide procurement automation requirements the Navy is expected to be a key initial user. A recent Navy memo acknowledged that the Navy is the least automated of the services in terms of procurement.

"The intent is to deploy to a large number of Navy sites and other [sites] without large legacy systems that need to be replaced " Long said. He said SPS will initially focus on sites with no or limited automation because those sites offer the greatest potential payback. Those sites he added also involve a lower level of complexity than sites with legacy procurement systems.

Long said the majority of the contract's value will be concentrated in a four-year deployment phase. The remaining five years will involve upgrades and support.

SPS' total $238 million value is considerably lower than published estimates of $1 billion. Long said the project's delegation of procurement authority (DPA) had always been $241 million. AMS' $238 million total is somewhat lower than the DPA because the base year of DynCorp's contract worth $3.3 million is subtracted from the DPA ceiling.

A Defense Logistics Agency budget estimate however pegged SPS' life-cycle costs at $1.1 billion at one point according to Federal Sources Inc. But that estimate reflects the government's costs for administering SPS over and above the contract's costs.

AMS subcontractors on SPS include Digital Systems Research Inc. Sybase Inc. and Electronic Data Systems Corp.

DynCorp president Paul Lombardi said his company will continue to market its procurement software product on which its SPS bid was based. He said the company has proposals involving that software product throughout the government. "We have a business here."

The Navy's SPS contract office declined to comment on the award.

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