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DHS readies contract to outsource data center services

DHS eventually wants to outsource the center's entire operations to the private sector. According to a source currently bidding on the opportunity as a subcontractor who asked to not be identified, DHS has issued a solicitation under its own Enterprise Acquisition Gateway for Leading Edge Solutions contract, which was created to purchase IT services and equipment.
By Jill R. Aitoro
December 20, 2007

The Homeland Security Department is expected to award a contract in the next couple of months to outsource its data center services with the expectation that it will receive up-to-date applications and services faster than if it owned the data center.

Last year, DHS began consolidating its 18 data centers into two megacenters. The department first transitioned systems to a primary data center called the National Center for Critical Information Processing and Storage, which is based at NASA's Stennis Space Center in Mississippi.

The Navy acts as co-contractor and program manager for the center with prime contractor Science Applications International Corp. managing the center under an award it received through the Millennia Lite program, a General Services Administration governmentwide acquisition contract. That contract is scheduled to expire in the spring.

DHS eventually wants to outsource the center's entire operations to the private sector. According to a source currently bidding on the opportunity as a subcontractor who asked to not be identified, DHS has issued a solicitation under its own Enterprise Acquisition Gateway for Leading Edge Solutions contract, which was created to purchase IT services and equipment.

The contract, which has a term of seven-and-half years, calls for DHS to transition over five years the data center's equipment and managed services from a government-furnished model to a contractor-furnished model. The winner will charge DHS for the use of the data center using a utility pay-per-use model.

SAIC and Computer Sciences Corp. are competing for the contract, according to the source. Officials with the two systems integrators could not be reached for comment.

Earlier this year, EDS won an eight-year $800 million contract to run the secondary data center, which will act as a backup in case the primary center is inoperable due to a disaster or attack and during times when the primary center cannot fully handle DHS' loads.

DHS "is keeping the option to have equipment and managed services go from" a government furnished model to a contractor-furnished model, "but not necessarily all equipment and services," said DHS spokesperson Larry Orluskie.

Consolidating data centers will give DHS a common computer platform that should allow its individual offices and agencies use of more advanced software applications and the ability to better share information, Orluskie said. A collection of computer networks that could not easily share information, the result of merging 22 disparate agencies into one department as DHS did, has been one of the primary obstacles to its ability to work seamlessly and effectively as one since it was formed in 2002.

Purchasing data center services on a utility-style model is a good approach for DHS "if the requirements can be satisfied at acceptable risk," said Lee Holcomb, vice president of advanced solutions in Lockheed Martin's Business Process Solutions group and former DHS chief technology officer. The utility-model shifts much of the risk of providing the services to a contractor, which must maintain the applications and meet stringent parameters such as continuing services when usage spikes. The contractor also must provide services through a defined infrastructure as outlined in DHS' enterprise architecture and common operating environment framework.

"I know that the DHS [Office of the Chief Information Officer] management was inclined to move toward this model in the future, and I am pleased to see they are [doing so]," Holcomb said.

How fast the initiative rolls out will depend in part on funding. The fiscal 2008 DHS appropriations bill, which was rolled into the omnibus spending measure passed By Congress this week, includes $72.3 million for expanding data storage capabilities at the Navy data center, according to the document.

"At the end of the day it's all about funding," said an IT expert familiar with the project. Gaining support for "a program like this is always a battle, but it's vital. To successfully create one information-sharing department out of a collection of former standalone agencies, there needs to be a common infrastructure."

 http://www.govexec.com/story_page.cfm?articleid=38904&dcn=e_gvet