Disputed CIOSP style earns Kelman's support

The Clinton administration has thrown its support behind the process under which the National Institutes of Health is preparing its controversial Chief Information Officers Solutions & Partners (CIOSP) governmentwide contract.

The administration's support, which is not an endorsement or approval of the contract itself, is a victory for the $100 million, five-year contract, which has been criticized for going beyond the scope of procurement reform laws that opened up government acquisition.

"This contract is consistent with the administration's reform agenda and policies, especially in the collaborative way it works with industry in establishing the [request for proposals]," said Steven Kelman, administrator of the Office of Federal Procurement Policy, who recently met for nearly an hour and a half with a group of pro-spective CIOSP bidders. "This shows broad, open communi-cation between government and the private sector that establishes a new lev-el for federal procurement. This is something we hope to see more often."

In developing the first governmentwide contract that embraces some of the reforms in the Information Technology Management Reform Act (ITMRA), NIH officials and a group of about 30 vendors have been meeting for weeks to discuss the requirements of CIOSP, a multiple-award contract that will offer civilian agencies a broad array of hardware, software and technology services, ranging from telecommunications to data-center services to Year 2000 solutions.

CIOSP is targeted to help the CIO, which ITMRA requires every agency to appoint by Aug. 8, to quickly assemble IT systems and products to meet an agency's needs.

Coziness Draws Criticism

But some observers have criticized the close relationship between NIH and vendors for going beyond the scope of procurement reform laws that allow closer working relationships between government and the private sector.

To combat those criticisms, vendors told Kelman and his staff that the process to develop a request for proposals for CIOSP has reduced vendors' costs, which run into the millions of dollars, by up to 90 percent. The lower costs to contractors will translate into lower costs to government and therefore taxpayers, the vendors said. They added that working closely with NIH to define CIOSP's requirements has given them a greater understanding of NIH's needs, which could lead to more innovative solutions. The process also has led to greater cooperation among vendors.

Kelman's response greatly pleased vendors. "It was a great meeting; that's the only way to describe it," said Roger Cooper, vice president of information-network services for I-NET Inc.

But Bob Dornan, senior vice president of Federal Sources Inc. and a critic of contracts similar to CIOSP, still was not convinced by Kelman's statements. He said bold experiments in reforms ultimately may improve the system but that CIOSP, as with other multiple-award contracts, has gone too far.

"It goes way beyond what Congress intended and has the potential of screwing up a good thing," he said. "This alone will not call for the repeal of reform, but an accumulation of these will cause people to question reform, which could cause a backlash."

Dornan added that the multiple CIOSP awards, expected to go to 12 to 15 vendors by next month, "make a mockery out of the reform laws [by] giving anyone who can walk through the door an award."

By awarding a contract to so many vendors, NIH weakens the fundamental rule of a contract as a binding agreement between the government and a vendor, he said. The federal government has indicated it expects little from the contract.

Kelman dismissed those complaints as part of the risks of reform. "Let's push the envelope and see what happens," he said. "As a general matter, some innovations will succeed and some will fail.

"When CIOSP's [RFP] comes out," Kelman said, procurement specialists will determine if vendors had too much influence in shaping it. If so, then NIH should admit mistakes were made and move on. "But we shouldn't shout down the innovators," he added.

For vendors, the process is the first crack at trying to figure out what Congress intended in reform laws. "The only way you're going to define ITMRA is go out and do it instead of waiting for grass to grow," Cooper said.

Kelman asked vendors to work with NIH on a white paper detailing lessons learned in developing CIOSP, which could be distributed to other agencies.