'Seat' sows confusion
- By Diane Frank
- Apr 24, 2000
One year after agencies began signing up for the General Services Administration's
desktop outsourcing program, most customers remain focused on — and befuddled
by — the costs involved.
The GSA Seat Management program, through which eight vendors are offering
desktop management services, is designed as a services procurement, but
agencies approach it more as a hardware buy, said Christopher Wren, Seat
Management program director at the GSA Federal Technology Service's Office
of Information Technology Integration.
"People are still focused on the hardware costs," Wren said. "The federal
government has gotten very good at buying boxes...but that's not the real
issue here."
The Seat contract does include new hardware and software, as well as
"refresh" clauses to bring in new technology as it becomes available. But
the costs are based on the support services associated with managing those
systems. So what the agency is spending per seat is not so much an issue
of the hardware but of the supporting services.
For example, one agency can specify a computer with an Intel Corp. Pentium
III 500 MHz processor and pay $200 less per seat than an agency that asked
for a system with a lower-grade Intel Celeron 450 MHz processor. Why? The
first agency has told the vendor that its systems can be monitored remotely,
which costs less than the second agency's requirement that the vendor have
three technicians on site.
"The price is a function of what goes into the "seat,' " Wren said. "So
is a $2,000 seat right for you? It depends on what your needs are."
Phil Kiviat, a federal market consultant helping agencies make their
Seat Management decisions, agreed. But the problem with understanding seat
management costs is exacerbated by the fact that agencies "do not have a
good way of measuring [the] value" of the management services, he said.
That lack of understanding is something that GSA and consultants have
been trying to explain to agencies for more than a year, Kiviat said. But
agencies often are focusing on the hardware costs because those are much
easier to comprehend. "It's easy to count the cost of things and products;
it's hard to calculate the value of a service," Kiviat said.
Another problem is that agencies still do not know how much they are spending
now nor what they are spending it on, Wren said. In the past year, more
than 60 agencies have gone through total cost of ownership studies, and
many plan to use these studies as a benchmark against which to measure future
IT spending.
"To get a good "warm fuzzy,' you want to know what you're paying today;
where your strengths and weaknesses are," Wren said.
Agencies still need to understand that spending less money is not always
the best business plan. "A low cost of ownership may not be a good thing — it may mean you are under-invested," Wren said.
Five agencies have signed up for services that the eight vendors on the
contract offer, and others are looking. Earlier this month, the Peace Corps
awarded Federal Data Corp. a five-year, $16.9 million task order for managing
885 seats.