DOD software stock going slow

Although the Defense Department purchased $19 million in Microsoft Corp. server software last June — anticipating great demand under a cooperative buying arrangement — the services have ordered just $5 million of the supply, according to Rex Bolton, the DOD Enterprise Software Initiative Working Group chairman.

"We're gonna find a way to make it work," said Bolton, an Office of the Secretary of Defense computer specialist who spends one day a week working on ESI. "If we don't, we won't have any money" for future, prepaid software agreements, which are the best method of getting low prices, he said.

Formally launched in 1999, ESI is the Pentagon's program to eliminate any unnecessary software licensing costs by enabling Defense agencies and services to use blanket purchase agreements with discounted prices.

Through the Navy, the Pentagon paid Microsoft $19 million to get the best prices on 31,000 software licenses for 18 months. Any amount less than the $19 million ordered by December would be lost money, Bolton said.

ASAP Software, CDW-G Inc., Dell Computer Corp. and GTSI Corp. hold BPAs to sell the software to DOD through the companies' General Services Administration contracts. Bolton compared the Microsoft BPAs to large requirements-based contracts, which vendors usually take a year to market effectively.

"When you think we started out with zero awareness in the department," things aren't so bad, he said. One large order could eliminate the problem, he said.

Although ESI has had high-level support at the Pentagon, Bolton has no marketing budget. He works with service representatives who usually can only give about one day a week to the project.

"All of DOD isn't aware as they could be of all the great deals they can get through ESI," said Keith Hodson, a spokesman for Microsoft Government.

However, the Navy is putting it to use. The service may sign an ESI agreement with Microsoft for premier consulting support by June, Bolton said. "This is like super-smart techies," he said. The contract would be a sole-source agreement, because Microsoft is the only company that can provide such high-level support. The Navy also plans to recompete its Microsoft desktop BPA for ESI.

And because some government software licenses can include contractors, it's possible that Electronic Data Systems Corp. could use the Navy's ESI agreement to make its own software purchase.

Floyd Groce, the Navy Chief Information Office's lead for software licensing, did not return phone calls seeking comment for this report.

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