Navy mulls outsourcing ashore IT

Senior Navy officials in Washington D.C. will unveil this week a program to evaluate the potential cost savings from turning the Atlantic and Pacific fleets' ashore information technology operations over to private contractors.

These Navy officials plan to piggyback the outsourcing program on the recently announced fast-track Information Technology for the 21st Century (IT-21) project which will create a seamless worldwide ship-to-shore architecture for the fleets. If cost-effective the Navy would outsource the fleets' ashore IT infrastructure.

Under the IT-21 Ashore Acquisition Proof-of-Concept program the Navy plans to outsource all onshore Navy IT resources and services on the island of Oahu Hawaii and in the Norfolk Va. area to provide a turnkey integrated voice video and data solution.

The outsourcing would include the cable plant Metropolitan Area Networks (MAN) and telephone service as well as servers and PCs. IT equipment would be owned and operated by the Navy contractors.

Industry Participation Sought

The Navy and the Defense Information Systems Agency will host an industry meeting May 2 at Fort Belvoir Va. to outline the project and to solicit widespread industry participation. Marvin Langston deputy assistant secretary of the Navy for command control communications computers and intelligence is expected to argue that outsourcing is necessary to fund IT-21 though the Pacific and Atlantic fleets disagree.

The Navy wants to deploy industry and government teams to Oahu and Virginia over the next two months to conduct business case studies on the feasibility of outsourcing vs. outright ownership of IT systems by shore-based fleet units said Cmdr. Steve Vetter an assistant to Langston. "We're going to take a look at the true cost of ownership and prove whether or not outsourcing is valuable " Vetter said. "And if we can't then we'll go to Congress [which has pushed outsourcing] and say it is not a panacea."

Langston's office has signed Booz-Allen & Hamilton Inc. Coopers & Lybrand and Bellcore Research to help with the studies Vetter said.

Vendors who have undertaken similar projects in the commercial sector have long advocated that DOD do the same. But some Navy commanders resist the idea of outsourcing because they "fear the loss of control " according to an industry source. Langston may be using IT-21 which was conceived by Adm. Archie Clemins commander in chief of the Pacific Fleet to push the proposal through to see whether it will float.Under the pilot a number of statements of work will be issued for pieces of the IT infrastructure in Oahu and Virginia the resulting contracts could run from eight to 10 years.

DISA will play a key role in the pilot programs. "It may turn out that DISA could become the entity that does the metropolitan networks " Vetter said. "It is in our best interests to help DISA succeed."

Currently DISA delivers long-haul voice video and data communications through its Defense Information Systems Network to bases where the services have responsibility for development management and maintenance of the base infrastructure. An industry source said DISA would "relish" the opportunity to control MANs.

One outsourcing vendor observed that the complexity of the outsourcing projects will limit the number of vendors that get involved.


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