Army readies ITES2

The Army's follow-up to the $1 billion Information Technology Enterprise Solutions (ITES) program will likely involve only IT services, Army officials said.

Army IT and contracting officials are working on guidelines for ITES 2 because the service will hit the $500 million limit for the ITES Functional Area-2 services' work sooner than expected. ITES 2 requirements should be ready this fall, said Kevin Carroll, program executive officer in the Program Executive Office-Enterprise Information Systems (PEO-EIS).

PEO-EIS officials erred by not putting higher financial ceilings on ITES, said Carroll, the organization's top IT program official. He candidly took responsibility.

"We learned our lesson," said Col. Tom Hogan, PEO-EIS' project manager for enterprise infostructure, the organization's top enterprise IT program official. "We have to do something new,"

The decision to create ITES 2 comes about six months after the service awarded the first ITES FA-1 products' and FA-2 services' contracts. Northrop Grumman Corp. received the first ITES task order in March, a six-month, $175,000 project to update U.S. Military Academy computers to Microsoft Corp. Windows 2000 and newer operating systems and Active Directory.

ITES products' work totals $32.5 million. ITES services' jobs total $16.8 million, but with options, the number could reach $152.8 million, said Col. Mark Barnette, chief of information infrastructure modernization in the Office of the Chief Information Officer.

Officials in the Army's Network Enterprise Technology Command at Fort Huachuca, Ariz., want to hire a vendor by Aug. 1 to install a network storage solution and provide personnel to operate the Continental U.S. Theater Network Operations and Security Center, which manages the service's domestic computer systems. The winning company will also analyze and fix network security problems, according to the project's statement of objectives.

Army officials expect to award 16 additional ITES FA-2 services task orders worth $50.7 million that could reach $395 million, Barnette said. Those dollar figures justify ITES 2, said service IT and contracting officials.

They would not divulge the financial ceiling planned for ITES 2. But it could range from $2 billion to $5 billion, industry officials say.

Analysts criticized Army IT officials for not putting higher dollar limits on ITES. They said the service cannot do anything enterprisewide for $1 billion during a five-year period.

Army IT officials admitted they took a cautious approach to ITES because it represents their first attempt at a servicewide, performance-based contract. They said they also wanted a low public profile after congressional, industry and media scrutiny of other military enterprise IT procurements and programs including the Navy Marine Corps Intranet.

But Army IT and contracting officials said another performance-based procurement initiative does not represent a major mistake. They said ITES' popularity demonstrated the need for enterprise projects and industry-devised IT solutions and gave the service experience managing a performance-based contract.