DOD leans on leasing, outsourcing
- By William Matthews
- Mar 09, 2000
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intends to rely more on leasing to avoid owning equipment that is obsolete,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,