Lockheed tapped for CMS deal

OMB Performance Goals

The Centers for Medicare and Medicaid Services this month awarded Lockheed Martin Corp. a $401 million, performance-based contract to streamline and operate the agency's computer networks and systems nationwide.

The pact, signed May 2 and good for seven and a half years, is the agency's first performance-based contract and requires Lockheed Martin to manage and run all aspects of the project. In previous contracts, CMS was the government's general contractor with federal employees working alongside the vendor and subcontractors.

"This is a shift, a different mind-set," said Ed Cummins, Lockheed's program manager for the project. "They were looking for a single responsible entity."

Lockheed Martin Information Technology will assume responsibility for operating the agency's main data center — which is located in Woodlawn, Md., and processes doctors' claims for Medicare and Medicaid services — and will institute a seat management contract to manage 6,500 desktops nationwide, including servers. The company also will manage, operate and maintain all voice, video and data communications.

The scope of the contract calls for a full range of security and privacy services, help-desk support, database management, Webcasting and hosting, and disaster recovery. "We are looking to provide them with a higher level of services," Cummins said.

Ron Graham, acting director of the technology management group in the CMS Office of Information Services, said the new contract would consolidate systems and provide more efficient services to employees. Under the previous contracting arrangement, Graham said the government acted as the general contractor, and when problems occurred, there were cost overruns. "It caused problems, and that inefficiency cost money," he said.

The contract is CMS' first in which Lockheed must meet certain goals to receive payment. For example, Lockheed must successfully consolidate platforms, and CMS must be able to process claims more quickly.

"It's easier for the government to recognize a good idea than to invent one," said Bob Welch, a partner at Acquisition Solutions Inc. "Industry is given an opportunity to do what they do best: propose solutions."

"This will be as good a challenge as any to see how performance-based contracting can work and what the benefits can be," said Larry Allen, executive vice president of the Coalition for Government Procurement.

Although all of the subcontractors have not been selected, they will include Government Network Solutions for engineering help and Integic Corp. for Webcasting and hosting.

Graham said that although the contract is not technically part of the ongoing modernization effort at the Department of Health and Human Services, which oversees CMS, it will help move the IT infrastructure toward a more efficient and stable environment.

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What's on tap

The Centers for Medicare and Medicaid Services (CMS) contract to consolidate networks and systems includes:

* Operating CMS' main data center.

* A contract to manage 6,500 desktops and servers nationwide and provide help-desk support.

* Managing, operating and maintaining voice, video and data communications.

* A full range of security and privacy services.

* Database management.

* Webcasting and Web hosting.

* Disaster recovery services.

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