Thin Client on the Hardware Menu
ARMY DEVELOPS NEW HARDWARE PROCUREMENT VEHICLE
WITH EXPANDED FUNDING AND A THIN-CLIENT FOCUS.
Army officials are working on a new version of a popular hardware procurement vehicle that reflects the drive by Lieutenant General Steven Boutelle, the Army chief information officer/G-6, to achieve cost savings and other efficiencies through expanded use of thin-client computing technology.
The Information Technology Enterprise Solutions 2 Hardware (ITES-2H) procurement offers a significant opportunity for providers of computer and network hardware to the Army. A request for proposal was released by the Army Information Technology, E-Commerce and Commercial Contracting Center (ITEC4) in June.
ITES-2H represents the second iteration of an umbrella hardware contract for the Army’s Information Technology Enterprise Solutions program. The program is important for several reasons, analysts say. It will cover a spending level 10 times that of the original program, will be made available to more contractors than the first go-around, and will be focusing on implementing the Army’s migration towards thin-client technologies.
The first version of ITES-2H, known as ITES Functional Area 1 (FA-1), was awarded in September 2003 to four contractors—Dell Computer, GTSI, Hewlett-Packard and Lockheed Martin Integrated Systems. It had a spending ceiling of $500 million, but that procurement level was soon exhausted.
The new ITES-2H, which will boast a total purchasing level of $5 billion over five years, is expected to be awarded to seven contractors, including two small businesses. The contract includes a threeyear base period and two one-year extension options. The originally anticipated $10-billion, 10-year level of procurement was reduced by the Army Small Computer Program (ASCP), the sponsoring agency, primarily because it anticipates changes to the Army’s technology requirements in general, and to its thin-client requirements in particular.
“This will be a follow-on contract to the FA-1,” said Michelina LaForgia, ASCP assistant project manager. “That contract was one of our success stories. We expected FA-1 to last for many years, but the $500-million ceiling was soon reached. We realized a while ago that we needed to put a follow-on contract in place.”
ITES-2H is one of several Army enterprise technology contracts. ITES-2H is focused on higher end servers, networking equipment and thin-client technology, while others cover enterprise software licensing, and commodity items such as desktops, notebooks and printers.
ITES-2S, the software vehicle, is on hold until at least August pending resolution of a contract protest by companies not selected in a competitive process to participate. (See MIT, Volume 10, Issue 5, page 24.)
ENTERPRISE SOLUTIONS
ASCA’s statement of work divides the hardware to be acquired under ITES-2H into eight groups, or “catalogs.” They are:
• UNIX platforms with RISC-based servers
• Windows-based servers
• Workstations, thin clients, desktops and notebooks
• Storage systems
• Networking equipment
• Network printers
• Accessories
• Video equipment
The program also contemplates the provision of services under the contract, to the extent that they are directly related to the hardware procurement. These include system configuration and integration, site analysis and equipment installation and relocation.
“What they are looking for in this contract is for vendors to provide solutions that the Army needs to solve the problems they have within the Army enterprise,” said Clay Higgins, program general manager for Department of Defense programs at GTSI, an ITES FA-1 incumbent contractor. “They want to move from many different base setups to a single Army program.”
Army Knowledge Online (AKO) is one application that Higgins foresees as benefiting from ITES-2H. “AKO allows soldiers to log in and pick up e-mail anywhere,” he said. “There is an effort now underway to get all Army units to use this concept. Thus is an illustration of the single Army enterprise and this contract is designed to make these kinds of things happen.”
LaForgia expects ITES-2H to serve as a major vehicle for acquiring thin-client technologies. “Thin-client technologies are expected to achieve longterm cost savings,” she said. “Thin client is a major CIO/G-6 initiative. General Boutelle is behind it.”
With thin clients, “You lose your personal hard drive and store data on megaservers,” LaForgia explained. All of the armed services invested in thin clients to one degree or another. Boutelle recently announced a major drive toward migrating Army desktops to thin clients. (See MIT, Volume 10, Issue 4, page 40.)
Thin-client technologies encompass a combination of hardware and software. On the software side, thin clients are best thought of as Internet browsers, a program that pulls information stored elsewhere but which offers little or no computing power of its own. Thin-client hardware typically include smart computer screens that lack disk drives or moving parts, and are entirely reliant on the network for their computing power.
Thin client’s cost advantages include cheaper hardware and maintenance efficiency. It is also thought to enhance security by having security managed centrally, by trained information security professionals, rather than by end users.
Besides the specific cost benefits of technologies like thin client, ITES-2H aims at saving Army customers money through the power of strategic sourcing and centralized contract administration.
“Funding is a huge issue in the Army right now,” said LaForgia. “By centralizing the contracting like this, we get our customers great economies of scale and reductions in their total costs. We are applying bulk buying power and doing consolidated strategic sourcing on commodity contracts and we are applying those principles to this contract as well. As thin-client solutions become more standardized, we will be able to offer common buying power on those items.”
ASCP also endeavors to adapt commodity bulk-buying principles to the non-commodity items with which it deals. “We do this by tracking our customers’ buying trends,” LaForgia explained. “If we notice a trend toward buying particular items or configurations, then we can offer that as a commodity item. If we notice that several customers are ordering similar items, we will do a requirements validation survey throughout the Army to see if there is sufficient interest to write an enterprise agreement so that our customers can get economies of scale.”
Ultimately, however, the individual Army customers are the ones that must come up with the funding for their purchases. “All acquisitions are funded by our customers,” said LaForgia, meaning the individual Army agency is doing the actual buying. “For example, we will make thin-client technology available under this contract. We will also suggest to our customers, depending on their size, some ideas about what might work for their installations, but then they have to find the funding for it.”
TIMING BALANCE
The ITES-2H purchasing level and contract duration are designed to find an equilibrium between being able to provide Army customers with both cost reductions and up-to-date technologies. ITES-2H is now written at a five-year, $5-billion level, much higher than FA-1’s $500 million but well less than the $10 billion, 10-year contract that was originally anticipated.
The increased contract level and time period eases the administrative burden on ASCP and its customers, since they do not have to write new requirements and contracting vehicles as often. At the same time, LaForgia said, ASCP officials concluded that a 10-year contract period was too long, because of the anticipated acceleration of the technology refresh cycle, particularly in the area of thin clients.
“If the contract were limited to $500 million, we’d just have to do this again in another couple of years,” she said. “On the other hand, if this were a 10-year contract, it might not be able to accommodate technology changes, especially in the thin-client area. The technology market is changing every day. Since our contract is catalog based, our customers can buy products they are interested in as long as the vendor is offering them to the public.
“We took a look and decided we didn’t now what we would want in 10 years, so we didn’t want to lock the contract into that long of a time period. By that time, some technologies could be obsolete. We decided to go with a three-year base, and if we find that technology has outstripped our scope, we would not exercise the contract options. We anticipate using five years, but we wanted flexibility.”
LaForgia anticipates that seven vendors, including two small businesses, will receive indefinite delivery/indefinite quantity contracts under ITES-2H. As is the trend with other large umbrella government contracts, the winning vendors will then have to compete against each other to receive individual task orders. This double-tiered competition for task orders, in which the first contest takes place to be eligible to participate in the program, while the second involves competition among the contractors for actual delivery orders, is designed to deliver a combination of value and speed to the Army.
As a result, price competition will be considered, but de-emphasized, in the first round of competition under the RFP. “The three areas we are considering are mission support, past performance and price,” LaForgia explained. “Because we will have competition at the task-order level, price is the last factor to be considered. We expect to get good competition at the task-order level.”
MISSION SUPPORT
Mission support is the number one factor the government will consider when awarding contracts, according to LaForgia. “We didn’t want to go with a product with a low price that is merely technically acceptable. We want technical superiority,” she emphasized. “Management is also an incredibly important factor involved in mission support. We are looking for the ability to respond to change. It’s great if a vendor was able to deliver 300 desktops on time and at a very good price. But if they have no processes in place and no ability to manage changing technologies, they’re not going to be able to respond to the Army’s future requirements.”
The mission support factor, including a potential contractor’s management processes, will be evaluated based on the proposal submitted by the company.
For Clay Higgins and GTSI, the key to succeeding in getting an ITES contract award is the ability to accommodate the Army’s diverse needs and global reach.
“We have the financial capability to service the Army around the globe, wherever the army is now and wherever it might be in the future,” he said. “GTSI has been providing technology solutions to the government since its very beginning. For years we have provided thousands of products to the government through many contract vehicles. We provide more product than anyone in the government marketplace. We don’t deal with the private sector. We have a large range and scope of products and we deal with a large number of original equipment manufacturers. A contract like ITES-2H just falls right into our area of business.”
LaForgia said she anticipates that the ITES-FA1 incumbents will all be bidding on the ITES-2H contract, but notes that other vendors should not be discouraged, specially since the number of contract awards this time will be greater. “Other vendors definitely have a shot at getting in there,” she said. “Since we intend to make more awards, by definition there will be more business to go around.”
“We want to be able to continue to offer our Army customers anything and everything that will satisfy their technology requirements, at a reasonable price,” she concluded. ♦
