Getting what you want
- By Megan Lisagor
- Sep 02, 2002
During the weeks leading up to the award of a billion-dollar contract for its information technology infrastructure, the Transportation Security Administration and interested vendors publicly plugged the procurement as innovative. Until recently, however, details of the deal remained sketchy.
As one of several agencies slated to join the proposed Homeland Security Department, TSA needed the approval of an investment review board before it or Unisys Corp., the chosen prime contractor, could publicly discuss the program's finer points.
On the evening of Aug. 12, the agency got the go-ahead, and the following morning officials were talking. So what is really behind the buzz? Just the approach, the solution and the ramifications for government contracting, according to analysts and TSA and Unisys officials.
TSA issued a statement of objectives for its Information Technology Managed Services (ITMS) program in June. Two months later, it tapped Unisys to lead the effort to provide the agency's core information systems and services. A week and a half after that, TSA officially awarded the first two work orders, valued at about $245 million.
In all, the procurement process took three and a half months from start to finish, according to Patrick Schambach, TSA's associate undersecretary for information and security technology. That pace is typical of TSA, which has been running to meet congressional mandates since its creation after the Sept. 11 terrorist attacks.
But in the larger context of federal outsourcing, it is an unusual procurement, according to market research firm Gartner Inc. analysts and Ira Kirsch, president of the federal government group at Unisys, who estimates that the turnaround time would normally have been six to eight months. They credited the ITMS statement, which laid out business goals rather than specific requirements, with the shorter cycle.
There were "innovative approaches introduced here. [The agency] created a unique model in terms of acquisition [with] flexibility and scalability," Kirsch said, noting the open communication between TSA and industry. "This really could revolutionize the whole procurement process."
ITMS emphasizes managed services, a relatively new procurement strategy in which an agency pays a company for technology solutions that help solve a problem — in this case, securing the nation's transportation systems. The plan is more than mere rhetoric. Its performance-based nature demands that Unisys deliver or pay the price.
Here's how Schambach, also TSA's chief information officer, recently explained it to an audience of federal IT contractors: If TSA and Unisys meet their performance goals, Unisys earns a 5 percent bonus. If only TSA succeeds, Unisys loses 2.5 percent, and if both fail, Unisys loses 5 percent. And getting to the heart of the matter, if Unisys satisfies the ITMS requirements but TSA doesn't fulfill its mission, there is no reward.
"We're tied to them all the way, and it's all predicated on fulfilling a mission," Kirsch said. "We really put our money where our mouth is" (see box).
Although TSA has Unisys' sole attention, the company's solution could soon reach a larger arena. The creation of the Homeland Security Department is looming, and officials from both sectors agree that the fledgling TSA's infrastructure could serve as an example.
That could be a boon for managed services contracting, which has received cautious praise from the federal IT community. "On the government side of the equation, I still don't think they get it," Schambach said.
Still others will follow suit, according to Gartner analysts, who believe this trend will continue and expect "to see the model used by TSA in future procurements," the research firm concluded in an Aug. 19 report.
The utility approach
Unisys Corp.'s solution for the Transportation Security Administration's Information Technology Managed Services program relies on a model that emphasizes scalability and flexibility.
TSA is "really not purchasing anything from us other than services and products, kind of like a utility bill," said Ira Kirsch, president of the federal government group at Unisys. The company offers a menu of options. For instance, TSA can order a workstation now then later add other capabilities; it's like setting up a phone line and ordering call waiting in the future.
"They understand it. They get it," Patrick Schambach, TSA associate undersecretary for information and security technology, said of Unisys, which beat out EDS for the high-profile job.