Telos nabs $380M Army network pact

Telos Corp. won the Army's $380 million next-generation network infrastructure contract, retaining its position as the service's major local-area network provider until 2003.

Telos will supply advanced servers and LAN components to the Army through the Infrastructure Solutions-1 contract awarded last week. IS-1 is the follow-on to the Army's $907 million Small Multiuser Computer II contract, awarded to Telos in 1995.

The IS-1 product offerings include high-powered Xeon Pentium II quad- and eight-chip servers from Hewlett-Packard Co., according to Gerald Jones, a computer specialist with the Army's Communications-Electronics Command Acquisition Center-Washington, which awarded the contract last week.

Jones added that some of the products Telos offered to provide the Army are so advanced "that they're still in the prototype stage." Jones declined to provide any more details until the Army finishes debriefing the losing bidders on the fiercely competed contract. Those bidders include Government Technology Services Inc., Litton/PRC Inc. and Vanstar Government Systems Inc.

Jones said Army customers can start ordering from IS-1 in early February 1999, when SMC II expires. IS-1 is open to buyers throughout the Defense Department as well as civilian agencies and, in a new twist for an Army computer and communications vehicle, Foreign Military Sales customers. Users will "experience a seamless transition" from SMC II to IS-1, Jones said.

Don Fernandez, Telos' marketing vice president, described the award of IS-1 as "a validation of all the work we have done with the Army on SMC II and other contacts. We also believe we won because we know where the Army is trying to drive their business...which is with big platforms for data access."

Jones said HP will supply desktop and thin client PCs as well as the high-powered servers on IS-1, with Sun Microsystems Inc. tapped to supply reduced instruction-set computing-based Unix servers. Thin clients, Fernandez said, will help support the Army's move toward a networking environment in which needed data and applications reside on the server and not on a desktop's hard drive. Telos selected Cisco Systems Inc. as its router supplier for IS-1, with 3Com Corp. supplying other major networking hardware, such as hubs.

Telos teamed with the best of the service, support and training vendor community, Fernandez said, allowing IS-1 customers to choose from Electronic Data Systems Corp., Federal Data Corp., Science Applications International Corp. or Wang Government Services for their support services.

Industry sources described the Telos bid as being on the "low end" of the competition for a contract originally valued at more than $900 million. Based on SMC II sales, sources also said the company might not reach the estimated $380 million "maximum value" of the award. An Army spokeswoman said Telos has done $109.2 million worth of business on SMC II.

Eben Townes, vice president of Acquisition Solutions Inc., said the success Telos will have with IS-1, like all other indefinite-delivery, indefinite-quantity contacts, depends "on their ability to market it."

But Fernandez said Telos does "not see any problem at all" in hitting the $380 million maximum value of IS-1 over a five-year period, "based on what we know on Army buying habits" and projected requirements.

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