Bill calls for DOD tocompete with vendors

The House last week overwhelmingly passed the 1998 Defense authorization bill (H.R. 1119) which calls for the Defense Information Systems Agency and the Defense Finance and Accounting Service to compete with the private sector by 2000 for operation of "inherently nongovernmental functions" such as data and payroll processing.

The House approved incorporation of these and other provisions in the Defense Reform Act of 1997 (H.R. 1778) which was attached as an amendment to the authorization bill. Another provision that called for slashing the Defense acquisition work force by 102 000 workers during the next three years remained intact [FCW June 23].

Looking at the cuts in the acquisition work force Bob Dornan senior vice president of Federal Sources Inc. McLean Va. said "these broad-brush cuts are the best solution for DOD to get rid of overhead."

However the Senate's version of the authorization bill which last week passed the Senate Armed Services Committee and will be taken up after the July 4 recess stated that any cuts in the acquisition work force should be done "in a rational manner." The bill which will have to be reconciled with the House version in conference omitted numerical goals.

Rep. Floyd Spence (R-S.C.) chairman of the House National Security Committee said the provisions requiring DFAS and DISA to compete do "not mandate privatization just competition. And in recognition of the fact that the private sector is not always more cost-effective than the public sector the bill ensures the existing work force will be able to compete."

DOD officials declined to comment on the bill.

Industry greeted the reform act with some skepticism. Dornan said outsourcing efforts date back to the 1950s yet few programs have been outsourced. He also questioned the provisions that would allow agencies to bid on the DFAS and DISA work. "Industry does not want to compete with the government " he said.

IMPAC CardOther key provisions of the reform act remained intact in the House version of the authorization bill including a section that mandates the use of a "governmentwide commercial purchase card" for commercial items that fall under the "micro purchase threshold" of $2 500. Federal employees currently can make small purchases with a government Visa card called the International Merchant Purchase Authorization Card (IMPAC) issued by Rocky Mountain Bancorp.

The White House objected strongly to this provision. The Office of Management and Budget said in a statement that "while the administration is vigorously promoting the use of purchase cards their mandatory use is objectionable because it removes the discretion of line officials to use other more economical methods."

The reform act does allow circumvention of the purchase card requirements. But to do so requires a written statement from a general flag officer or member of the Senior Executive Service saying the vendor will not accept the card or that the nature of the commercial item requires a contract or purchase order.

Other programs funded in the Senate bill included a sizable financial jump-start for the Navy's Information Technology for the 21st Century (IT-21) project a fast-track initiative to create a seamless computing environment between tactical and support systems throughout the Navy. The Senate bill would pump an additional $157 million into the Navy's overall 1998 budget for IT-21 even though the project was developed too late for inclusion in the normal budgeting process.

The Armed Services Committee said it was "impressed with the Navy's vision for IT-21 and the emphasis it places on commercial products."

The Senate bill did far more for IT-21 than just throw money at the Navy's key computer and communications project. Language in the bill portrayed IT-21 as "a coordinated budget initiative. Numerous programs with existing budget lines will be drawn together as IT-21 sub-elements."

These programs the bill said cover the waterfront of Navy IT projects from the switch- and cable-plant modernization program to the Challenge Athena commercial satellite program as well as the Afloat Telecommunications Services project.

The Senate like the House also sharply boosted funding for the Army's Force XXI program to create a digitized force capable of exchanging data between "smart" infantrymen vehicles and aircraft widely dispersed on the battlefield. The Force XXI program won a $150 million funding increase - far more than the $55 million increase the House pegged for the program.

But the committee wants the Army to subject the battlefield systems computers and computer gear to more rigorous testing in the future a position taken by outside critics of the project. Specifically the Senate directed the Army to develop plans to "include jamming and electronic countermeasures" in the division-level Force XXI test scheduled for this November.

Earlier this month Army Chief of Staff Dennis Reimer speaking at the Armed Forces Communications and Electronics Association conference conceded that the service had not yet tested how the system would hold up against such attacks.


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