DOD leans on leasing, outsourcing

The Defense Department, the largest government buyer of advanced technology,

intends to rely more on leasing to avoid owning equipment that is obsolete,

Assistant Defense Secretary Arthur Money said Thursday.

"Technology is moving at a rate faster than we can assimilate," Money told

a convention of defense contractors. To keep up with the rapid rate of change,

the military is increasingly inclined to lease services rather than buy

equipment, said Money, who oversees the Defense Department's highly technical

realm of command, control, communications and intelligence.

From seat management, in which a contractor supplies computer equipment

and maintenance services, to improving military computer system security,

"we're looking to buy services, not hardware," Money said. Thus there are

increasing opportunities for civilian businesses to take on work for the

military, he said.

The shift is largely a matter of necessity. The shortage of high-tech workers

is hitting the armed services especially hard. "Retention is a problem,"

Money said, so the armed services and the Defense agencies that serve them

are "outsourcing as much as we can."

When not shopping for services, the military is mainly in the market for

commercial off-the-shelf hardware. The days of having equipment specially

built to military specifications have largely disappeared. Less than 1 percent

of the information technology DOD buys is not commercially available equipment,

Money said. Cost, and the length of time it takes to produce equipment to

military specifications, make it impractical.

And when it shops, the military intends to shop more online. Electronic

commerce "is a more efficient way of buying," Money said. Electronic ordering

and tracking of purchases reduces the cost of logistics and the likelihood

that items will be lost during shipping, he said.

The military's top information technology priority is now to protect its

computer and communications networks, and DOD also is turning to contractors

for help with that, Money said. DOD will be incorporating public-key infrastructure,

digital signatures and several levels of encryption into its computer practices,

he said.


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