NSA outsourcing deal seen as key to IT modernization

The US$2 billion outsourcing contract that the National Security Agency (NSA) awarded yesterday to a vendor team led by Computer Sciences Corp. is expected to help revitalize the communications intelligence agency's Cold War-era IT infrastructure.

The 10-year contract, called Project Groundbreaker and due to take effect in November, is the result of a 15-month feasibility study conducted to determine whether IT needs that aren't central to the NSA's intelligence activities could be met more efficiently through a massive outsourcing agreement. The deal is one of the largest government outsourcing moves to date and is due to result in the transfer of at least 750 IT workers from the NSA to El Segundo, California-based CSC.

The NSA operates the world's largest pool of supercomputers as part of its mission to intercept and analyze foreign electronic communications. While analysts said Project Groundbreaker may provide indirect benefits to the agency's espionage and intelligence-processing capabilities, the outsourcing agreement will focus primarily on filling gaps in day-to-day support functions such as enterprise security and network management.

The new contract should help the agency to upgrade its IT infrastructure more quickly and allow it to focus more efficiently on its core functions," said Steven Aftergood, an intelligence analyst at the Federation of American Scientists in Washington. "The whole NSA modernization program is a work in progress."

For the NSA, Groundbreaker is more than just another outsourcing deal. It's a key part of a major overhaul of the agency that was kick-started two years ago by its reform-minded leader, Lt. Gen. Michael Hayden. "In order to remain successful in our foreign signals intelligence and information assurance missions, we must immediately begin to invest in our IT infrastructure to secure NSA's agility and adaptability in the Information Age," Hayden said recently.

"Hayden knew that he needed to concentrate on NSA's core mission but had an aging [IT] infrastructure," said Olga Grkavac, executive vice president of the Enterprise Solutions Division at the Information Technology Association of America (ITAA), an industry trade group in Arlington, Virginia.

As part of the deal, the NSA will hand over responsibility for design, implementation and management of its telephony, distributed computing, enterprise management and network operations to the team put together by CSC. A classified request for proposals was issued in March to CSC's group and two others led by AT&T Corp. and OAO Corp., an IT services provider in Greenbelt, Maryland.

How CSC plans to handle the transition of NSA employees remains a sensitive issue. Although the details of the transition plan are being put together by the agency, CSC spokesman James Sullivan said the company has "clearly been incentivized by the NSA to do this well."

As part of yesterday's announcement, NSA characterized the outsourcing contract as "an employee-friendly approach" that will provide CSC and its partners with "monetary incentives to hire a significant number of agency employees and offer them comparable or better pay, benefits and opportunities." An NSA spokesman said today that more than the 750 workers due to transfer could shift to the contractor workforce "voluntarily" if they want to do so.

On the other hand, Grkavac said she was told that the employees targeted for transfer to CSC can apply for other available jobs within the NSA if they prefer to stay with the agency. The NSA spokesman confirmed that and said no IT workers at the agency "will lose their employment under the Groundbeaker program."

"It's not the technology, it's the cultural issues that are going to be most difficult," said Chip Mather, senior vice president at Acquisition Solutions Inc., a federal procurement consulting firm in Chantilly, Virginia. Contracts of this size "add such a degree of complexity that they require extraordinary effort on top of all of the cultural issues," he said.

For example, CSC two years ago managed an often-contentious transition of more than 275 workers as part of the U.S. Army's $6.8 billion Wholesale Logistics Modernization Program (WLMP). During the contract negotiations, CSC was forced to deal with an array of touchy issues, including employee retirement benefits and guarantees of continued employment.

John Garber, a former NSA official who's now vice president and chief strategic officer at Chantilly-based Cryptek Secure Communications LLC, said the cultural issues that can affect "closed communities" such as the intelligence agency may create similar challenges for CSC in this case.

Still, CSC managed the WLMP "very successfully," Mather said. And the company has a 22-year working relationship with the NSA in various capacities, most recently as the prime contractor for a 1998 pilot program called Project Breakthrough that involved the outsourcing of 20 legacy software systems.

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