AMS pulls out of NASA financial system bid

American Management Systems Inc. has withdrawn from the competition for a 15-year NASA contract to develop an agencywide financial management system claiming the procurement is too risky a venture.

AMS selected along with KPMG Peat Marwick and Lockheed Martin Corp. in a February down-select announced May 1 that it was withdrawing from the Integrated Financial Management Program (IFMP) bidding because of questions that the company had about NASA's acquisition strategy.

Under the IFMP contract NASA will acquire commercial off-the-shelf (COTS) software that will be used to support NASA's entire 20 000-member civil service population and its centers and to manage its annual budget appropriation of $13 billion. IFMP which an AMS official valued at $50 million to $100 million is scheduled to be awarded in August.

Harry Barschdorf vice president of AMS' financial management and administration practice said the company had been very eager to bid on the project when it was first announced believing that its products would have been a good fit for the agency's technical requirements.

However company officials were concerned about the feasibility of NASA's aggressive timetable and the contract structure as a firm-fixed-price procurement. NASA officials he said had not adequately addressed these concerns. "We felt the entire shape of the deal was too high-risk for us and the government and that the government would not be successful in implementation " Barschdorf said.

NASA officials Cindy Stoltz the IFMP contract officer and David Howell the source evaluation board chairman declined to discuss AMS' withdrawal from the procurement. "I'm in the middle of a competition and I can't discuss any of that " Stoltz said.

However one source close to the bidding process who asked not to be named said AMS' withdrawal may also have been prompted by the company's recent loss of a protest to be allowed to bid a new software product for the program rather than the product the company offered when the program was launched.

Combination of Elements

Barschdorf said the company was concerned about "a combination of elements to this project that are relatively high-risk." The project involves not only complex client/server applications but a change in the "fundamental business practices " he said.

While AMS does do fixed-price work Barschdorf said such work is usually only done when the scope of the work is very well-defined and when the government absorbs a portion of the risk involved in the project. This project he said does not adequately define the scope of the work nor does it balance any of the risk between the government and the contractor. Adopting a more reasonable timetable and a more flexible cost structure are techniques that other agencies - such as the Internal Revenue Service and the departments of the Interior Veterans Affairs and Housing and Urban Development - have used when moving to implement a new financial system Barschdorf said.

KPMG remains committed to the procurement said David Halwig a KPMG partner and the concern's point man for the project. KPMG does not share the concerns of AMS he said.

"You can't be that restrictive in this kind of technology environment " Halwig said.

"You have to figure out how to meet client objectives and manage risk. Are we supporting this? Absolutely. Is it a doable program? Absolutely. We remain firmly in the competition. No doubt about it " he said.

AMS' NASA bid included financial management software already in use by Interior the Bureau of Alcohol Tobacco and Firearms and several intelligence agencies according to AMS officials. The company also proposed its acquisition management software which was the basis of its successful bid on the Defense Department's $238 million Standard Procurement System.


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