Education looks for private IT partner

As it tries to comply with a legal mandate to improve its performance, a key office within the Education Department is moving swiftly to hire a single vendor to oversee its technology modernization program.

Education's Office of Student Financial Assistance Programs (OSFAP), which manages close to 80 percent of the department's annual $450 million information technology budget used to support student aid programs, announced in June to vendors who work for the department that it planned to hire a so-called modernization partner.

The partner would act as sort of a right-hand man for IT management to turn the office's Modernization Blueprint into a reality. The blueprint will function as a plan for offices to upgrade and integrate Education's maze of aging computers scattered throughout the department.

OSFAP has long been criticized for its patchwork of computer systems and its inefficient operations.

"I think you will agree with me that, unless and until the department integrates the various systems and reduces the number of contractors, the effective management of outstanding contracts must remain a priority of both the [performance-based organization, or PBO,] and of the subcommittee's oversight efforts," stated a February letter sent to OSFAP chief operating officer Greg Woods from Rep. Pete Hoekstra (R-Mich.), chairman of the Oversight and Investigations Subcommittee of the House Education and the Workforce Committee. The letter suggested that Education may have to operate with fewer contractors.

In an attempt to remedy the problem, Congress in October made OSFAP a PBO with passage of the Higher Education Amendments of 1998. As a PBO, the office must focus on setting and meeting goals for performance. To do that, the PBO gets more management flexibility and procurement flexibility.

Greg Woods, a former executive in the Clinton administration's National Partnership for Reinventing Government, and other Education officials plan to select the modernization partner this month. OSFAP late last month reduced the field of possible winners to three, including Computer Sciences Corp. (CSC), Electronic Data Systems Corp. and Andersen Consulting.

Education is shopping for a chief coordinator for major IT projects within the office. The vendor will coordinate work with other vendors, Woods said. He said he doubted that the partner would assign all of the modernization work to itself.

"I don't see any way on Earth that that could happen," he said, explaining that Education's various vendors all have needed expertise in particular programs within OSFAP. "It's conceivable that [the modernization partner] will be a doer, but what we're principally hiring is an integrator and a manager of the development process."

A staff member on the House Education and the Workforce Committee said the committee has no issues with how the partner relationship is set up. "We want them to move fast, and I think we've made that clear to them," the staff member said.

But some vendors are concerned by the way the new PBO is operating. Industry sources familiar with Education IT projects told FCW they fear that the schedule for the procurement has been too swift for responding thoroughly to Education's requests. They said they also fear that CSC may have an advantage in the contract because CSC developed Education's Modernization Blueprint. CSC modeled the blueprint after the Internal Revenue Service's Prime Systems Integration Services modernization program, on which CSC serves as the prime vendor.

"It works incredibly in [CSC's] favor," said one industry source familiar with IT projects at Education. "They were [ahead on their proposal] on Day One. They know what it is before it's even released."

Officials at CSC do not consider themselves a shoo-in for the contract. "If we do [have an advantage], it's minimal," said Pat Ways, senior vice president of CSC's civil group. CSC has been doing business with the department during only the past year and a half, he said. Ways said CSC, as developer of the blueprint, has no "significant advantage" in the procurement.

Frank Abramcheck, vice president and managing director at EDS' government and industry group, said, "Even for those of us who are working in the department today, the [request for proposals] came out pretty quickly.... We assume the department will run a fair procurement, as has been our experience in the past."