Agencies still wary of seat management

The government has run seat management programs for nearly four years, but agencies still are sitting on task orders that could get the program moving.Agencies continue to wait for the desktop outsourcing concept to be proven on an agencywide level. That is why the massive Navy-Marine Corps Intranet project quickly is becoming the last ray of hope for federal supporters.Many in government and industry point to the 100,000 NMCI seats the Defense Department authorized the Navy to order last month as the make-or-break point for governmentwide seat management use.'NMCI's 100,000-seat order was the largest embracing of pure seat management in government,' said Charlie Self, deputy commissioner for the General Services Administration's Federal Technology Service and a longtime seat management proponent. 'Whether or not NMCI works will send a clear signal to the whole system. It must be working, otherwise the decision to move forward would not have been made.'NMCI, which could cost $6.9 billion for 350,000 to 400,000 seats over five years, is being closely watched not only by other agencies, but also by Defense Department officials and Congress. Defense CIO John Stenbit has expressed concern about program delays, legacy system migration and user satisfaction.And should NMCI fail or prove too difficult to implement, many government officials and industry experts said it would be the death knell for desktop outsourcing.Seat management has not enjoyed a great track record. Even with NMCI's recent progress, agencies still are not flocking to the governmentwide acquisition contracts providing these services.GSA's seat management program, which includes 10-year contracts potentially worth $9 billion to eight vendors, lists only seven agencies that have taken task orders out against it for a total of 9,000 seats.Meanwhile, the Outsourcing Desktop Initiative for NASA has found success internally with 39,000 seats moved to contractors, but only one outside agency'the Centers for Medicare and Medicaid Services at the Health and Human Services Department'has bought desktop services through ODIN.'The government hasn't had many successful examples of implementation to use as guidelines of how these contracts should be set up,' said Payton Smith, public-sector market analysis manager for Input of Chantilly, Va. 'It is an intriguing concept, but a lot of agencies seem to be waiting to see it proven before they are willing to take steps to invest in it.'Even with limited successes at NASA and the Navy, agency reluctance continues. Self said he has talked with 15 to 20 agencies that expressed interest in seat management but are unwilling to commit to trying it. NASA and NMCI officials routinely field calls about their efforts, too.For those agencies that took the plunge'including the Bureau of Alcohol, Tobacco and Firearms, Federal Highway Administration, Peace Corps and State Department'seat management has worked. A recent General Accounting Office report concluded that desktop outsourcing improves agency IT management and user support.Marguerite Moccia, CIO of ATF, said seat management has let the bureau standardize hardware and software and upgrade to the latest technologies. The Treasury Department bureau bought 6,400 seats under a blanket purchasing agreement with Unisys Corp. through GSA's IT Schedule.The flexibility the schedule offers, such as buying only what ATF wanted and having one-year contracts, was important to the agency, Moccia said.NASA CIO Lee Holcomb said the space agency's centers have renewed the first five delivery orders placed under ODIN.'We did a business case assessment last December and found that 80 percent of those interviewed agree that ODIN has generally met its objectives,' he said. 'Our costs are down, we have improved facility interoperability, and we have improved service delivery to the customer.'But whether more agencies jump on the seat management bandwagon depends on NMCI's success, many government and industry officials said.Input's Smith predicted desktop outsourcing will continue to grow. Input estimated agencies will spend about $880 million on desktop outsourcing services this year, up from $590 million last year. He added that spending would increase by 19 percent a year through 2007.Other analysts agreed with Input's estimates that seat management will continue to grow as long as NMCI is successful.'The seat management concept has a lot of appeal for the government,' said Richard Matlus, research director for the external service provider group at Gartner Inc. of Stamford, Conn. 'It allows you to stay more in tune with technology.'Larry Allen, executive director of the Coalition for Government Procurement of Washington, said agencies may proceed more cautiously because of security concerns.Agencies continue to face the same barriers to desktop outsourcing, such as employee displacement and resistance to change.Officials implementing NMCI and the National Security Agency's $2 billion Groundbreaker contract, which includes desktop outsourcing, have had to deal with the problem of IT workers who are displaced when a contractor takes over.The Navy and NSA put provisions in their contracts to let displaced employees move to other positions within the organization or work for the contractor. The NMCI contract requires Electronic Data Systems Corp. to hire displaced workers and offer them a 15 percent pay increase and three years of guaranteed employment.ATF dealt with the problem by retraining IT workers to become project managers and oversee hardware maintenance. Moccia said that because ATF is a small bureau, the personnel issue was easier to resolve. To deal with the culture change, she recommended giving workers information on any desktop outsourcing plan as early as possible.Some agencies using seat management have found that the contracts are not agency-friendly.Bob Woods, president of education services for the government services group of Affiliated Computer Services Inc. of Dallas, and a former FTS commissioner, said GSA's seat program ended up being too rigid because organizations had to outsource all their systems instead of just the pieces they wanted.'GSA did a lot of research before putting out the contract, and it looked like people would head in that direction,' he said. 'We underestimated how slowly people would be to transition to seat. GSA needs to do another survey of the market and update the contract.'Self said GSA is looking at FTS' service contracts to try to broaden seat management's scope and eliminate duplicative offerings.Woods, Allen and others also point to GSA's cancellation of the seat contract for the agency's Washington headquarters as a momentum killer.'I really thought GSA should have done it to ourselves before we sold it to someone else,' Woods said. 'If it can't work in your own house, how can you sell it to someone else?'By default, NMCI has become the new model to follow, or not. Capt. Chris Christopher, deputy for programs, plans and oversight for NMCI, said the Navy understands its program is the test bed for many agencies.'If the Navy is successful in implementing NMCI, others will want to follow suit,' he said. 'We certainly looked at what GSA and NASA did and built on their experiences. They were the pioneers in this, and now we took the next step. Others will follow and build on what we did.'