Air Force to expand IT2 program
- By Bob Brewin, Dan Verton
- Sep 05, 1999
MONTGOMERY, Ala. - The Air Force's Standard Systems Group this fall plans to ramp up its procurement of information technology products and services by adding a throng of new contracts to a recently created streamlined computer procurement program.
SSG plans to add more products to its Information Technology Tools (IT2) program, which uses the General Services Administration schedule to reduce the amount of time it takes to purchase computers, servers and laptops. SSG also plans to encourage closer cooperation with product suppliers, which will allow for a quicker process of integrating the latest technological developments into existing product lines.
SSG plans in November to add blanket purchase agreements for local- and wide-area network products, and it is considering a strategy for adding a BPA for software products, according to officials from SSG's Commercial Information Technology Product Area Directorate (CIT-PAD). Other plans call for issuing a BPA by February that will cover computer supplies and accessories, such as monitors and backup devices, and a BPA the following May for video teleconferencing and workstations.
The planned expansion of the IT2 program falls into what CIT-PAD director Lt. Col. Glenn Taylor called SSG's "Air Force Information Technology Superstore" strategy. "We're kind of like the Amazon.com of Air Force IT," said Taylor, referring to the popular online vendor that sells books, music and other commercial products via the Internet. According to Taylor, who spoke to attendees at the 13th annual Air Force Information Technology Conference (AFITC) here, SSG sold about $400 million worth of IT products last year. Taylor estimated that this year's sales would be $500 million to $550 million.
Taylor credited the Air Force's buying power and IT2's streamlined acquisition process as the two primary factors contributing to SSG's ability to provide its customers with state of the art IT products at prices well below GSA's Federal Supply Schedule. "We sell 100,000 computers per year, so we [should] get pricing and support that is commensurate with that kind of buying power," said Taylor, adding that the Air Force is still only about 7 percent of Micron Electronics Inc.'s total business.
To date, SSG has been successful in delivering on its promise of low prices. For example, the average price on the GSA schedule for a desktop system with an Intel Corp. Pentium II 450 MHz processor and 128M of memory is $2,135, according to Taylor. The average price for a similar system on IT2 is $1,431, he said. When those discounts are multiplied across all of CIT-PAD's product categories, the savings to the Air Force exceed $70 million, Taylor said.
Other contract vehicles, such as the Army Small Computer Program's PC-3 contract, have felt the heat from IT2's aggressive pricing strategy. IT2 offers better prices on similar desktop and laptop systems than PC-3, GTSI's GSA schedule and GSA Advantage, according to Taylor (see box).
"I can say we have the best prices without any reservation," Taylor said. However, "the vendor who's the worst today will be the best tomorrow," he said.
However, "price is important only to a point," said Robert Guerra, president of Robert J. Guerra and Associates. "The direct sales model works in the commercial world, and in the long term, it will win in the federal space. The Air Force buyers are [very] sophisticated. They've been at this PC stuff since Desktop I in the early '80s, [and] they want that personal touch that Zenith Data Systems made them come to expect over a 12-year period."
Lt. Col. Dan Altobelli, chief of the hardware division within CIT-PAD, said the World Wide Web is doing a lot of the IT2 work and that the contracting efficiencies being realized by IT2 have been "mind-boggling," with some contracts and modifications taking one week or less to complete. SSG's online E-Mall is scheduled to undergo upgrades later this year, including enhanced search capability, side-by-side pricing and configuration and simplified ordering procedures. Savings realized by IT2 is "real money" that can be spent by commanders throughout the Air Force for other mission-critical needs, Altobelli said.
William Gormley, assistant commissioner for the Office of Acquisition at GSA's Federal Supply Service, said the Air Force has "done an outstanding job" in reducing costs to its users through the use of BPAs.GSA's IT schedule continues to grow, with about 1,800 companies currently holding contracts, Gormley said in his keynote speech at AFITC. He said GSA anticipates that it will do about $7 billion in business on those IT contracts in the fiscal year ending Sept. 30, with service-related IT contracts accounting for $2.5 billion to $3 billion, compared with a negligible amount of service-related business in previous years.
Gormley predicted that large organizations such as the Air Force will start to consolidate the buying power now spread across many BPAs into larger, enterprisewide BPAs, such as Microsoft Corp.'s Air Force-wide contract. "We are starting to see fewer BPAs [and] a movement toward enterprisewide BPAs.... It's the right way to go," Gormley said.