SAIC joins growing roster of NATO suppliers

Science Applications International Corp. (SAIC) this month announced it had joined a group of about 30 information technology vendors that have enlisted to provide products and services to all member countries of the North Atlantic Treaty Organization.

SAIC officials described the NATO program, which apparently is open to U.S. federal agencies, as an alternative to the General Services Administration schedule.

SAIC signed a Basic Ordering Agreement (BOA) with NATO that will allow the company to provide virtually any IT product or service to any agency operating within a NATO country or to any contractor serving those agencies.

Company officials said the BOA will cover all the company's service offerings— from telecommunications to health care— and will also allow SAIC to resell equipment to users of the BOA.

Frank Jenkins, a group senior vice president at SAIC, said he thinks the BOA has "tremendous potential" as an avenue for selling products and service. But he said its success depends on the company's ability to market its offering to potential customers. "It will be quite a marketing burden for us to go out and make things happen [on the BOA]," Jenkins said. "I don't know that people will be standing in line waiting to place orders."

Jenkins said SAIC will focus first on potential customers within the European Community, but he added that the company will welcome customers from the federal government. "There's no legal basis for the U.S. government not to use it," he said. "It could be that we will find agencies in our own federal government will want to climb on board."

SAIC applied for the BOA on its own initiative and did not have to compete with other vendors for the award, Jenkins said. He said the deal expires after a year but automatically "self-renews" unless it is specifically canceled by NATO.

Jill Akin, SAIC's program manager for the NATO BOA, said SAIC does not list equipment such as PCs on the BOA, but the company can add them at customers' requests.

"Additionally, if a customer has a request for a piece of equipment, they can purchase it without it being listed," she said.

Mike Rowland, a senior associate for Navy programs at Booz-Allen & Hamilton Inc., said his company won a NATO BOA for IT support services less than a month before SAIC's announcement. Rowland said his company was interested in participating in the program because of the huge range of potential customers.

"We have proposed this as an alternate vehicle to some of the work we have with the Navy," he said. "I think the benefit of this is that it is comprehensive, and the labor rates are competitive with any other [acquisition] instrument in the field. It is also a means of facilitating work overseas to give the impression to the host nation that at least this contract has an international flavor."

But the experience of one company, whose officials spoke on the condition of anonymity, indicated that the lofty expectations of SAIC and Booz-Allen may go unrewarded. The company won a NATO BOA in 1992 but has since allowed the deal to lapse.

An official from this company said the BOA produced revenues of about $20 million, but the company found it difficult to get NATO customers to pay.

"It was like pulling teeth," the official said. "The deals were fairly small, and getting customers to pay a bill for $100,000 took months and months. It just wasn't cost-effective. The smaller the deal, the farther down the customers' payment lists you were."

NATO officials did not respond to requests for comments on the BOA program.


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