Outsourcing: Read between the lines

The ongoing Defense Department effort to determine the feasibility of

outsourcing its $400 million printing organization appears, on the surface,

to be nothing more than a divestiture of "old information technology" whose

time and value have been super-ceded by the Internet, e-mail and other state-of-the-art

information dissemination technologies.

Most high-tech and integration companies have written off this A-76

initiative as something of interest to only a Xerox or a Kinko's or a Hewlett-Packard.

But this could be the first big mistake of the new millennium as far as

business with DOD is concerned. This privatization effort might contain

more infrastructure and profit potential than many of the solicitations

that major integrators and suppliers have declared a "must win."

Look at what the Defense Document Automation and Production Service

(DAPS) could be in the hands of the private sector, and we find an existing

infrastructure unique at DOD. No single DOD organization has a physical

presence on every major military installation.

Here is an information provider (albeit toner-on-paper-oriented) that

has a physical infrastructure that would be the envy of any corporation

doing business, or wanting to do business, with DOD. A presence on every

significant base worldwide has a potential value far beyond the existing

revenue base of the current DAPS.

What could or would an aggressive, private service provider do with such

an asset? How valuable would a local presence be to potential Internet providers

and application service providers? How important would it be to have a worldwide

network of locations — potential server sites — providing local wireless

access for Palm platforms and other handhelds?

The potential boggles the mind. Imagine what could be done with a customer

base of almost 2 million DOD military and civilian employees with around-the-clock,

easy and local access to their services. What an opportunity. Or is it?

There are still some unanswered questions. Will DOD allow the winning vendor

to exploit this infrastructure, or will the winning vendor be limited in

what services it can provide? Is potential revenue limited to what is, or

what could be? Can DOD prevent a private company — assuming that is the

result of the A-76 effort — from marketing goods, services and capabilities

to on-base customers?

Perhaps DOD doesn't realize the value of the asset it has, or maybe

it does. Perhaps the Pentagon would enjoy the aggressive marketing of IT

goods and services to its employees at a local level by a private company

without the rules, regulations and politics of being a DOD organization.

Perhaps DOD would be burying the hatchet with Congress and the Government

Printing Office by allowing them to take over the "as is" (printing and

copying) functions of these hundreds of "franchises" while allowing the

winning vendor to build an infrastructure for DOD that is second to none.

—Inkley is manager of federal sales at Palm Inc. He can be reached at jinkley@palm.com.

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