News Article -- August 06, 2001

NSA Outsourcing Deal Seen as Key to IT Modernization

News Story by Dan Verton

AUGUST 06, 2001 (COMPUTERWORLD) - A $2 billion-plus outsourcing contract that the National Security Agency (NSA) awarded last week to a vendor team led by Computer Sciences Corp. (CSC) is expected to play a key role in the effort to revitalize the intelligence agency's Cold War-era IT infrastructure.

Breaking Ground
The NSA’s IT outsourcing deal Project Groundbreaker is set to take effect in November. It includes the following highlights: Planned duration: 10 years
Projected value: At least $2 billion, and potentially as much as $5 billion
Number of affected IT workers: 750
IT activities being outsourced: Distributed computing, enterprise/security management, network operations and telephony
Expected benefits: Quality of service improvements, continuous modernization of systems and cost savings

The 10-year deal, called Project Groundbreaker, is due to take effect in November. It's one of the largest government outsourcing moves to date and will result in the transfer of at least 750 IT workers from the NSA to CSC and its partners.

As part of the deal, the NSA will hand over responsibility for four major IT functions to the team put together by El Segundo, Calif.-based CSC. The scope of the contract may also be expanded, the company said. Groundbreaker was originally envisioned as a $5 billion initiative, and CSC said its value could still reach that level.

The NSA, which operates the world's largest pool of supercomputers, will continue to manage the systems that are central to its role of intercepting and analyzing foreign electronic communications. The outsourcing deal will focus mainly on filling gaps in day-to-day IT support activities such as 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."

Groundbreaker is an important component of a major overhaul of the NSA that was kick-started two years ago by its reform-minded director, Lt. Gen. Michael Hayden. He said late last year that the agency "must immediately begin to invest in our IT infrastructure" in order to remain successful in its signals intelligence and information security work.

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

The agency last year said it planned to pursue an outsourcing deal, and it issued a classified request for proposals in March. CSC and its team won the contract over two other groups led by AT&T Corp. and OAO Corp., an IT services provider in Greenbelt, Md.

The planned transition of the 750 NSA employees to CSC remains a sensitive issue. CSC spokesman James Sullivan said the company has "clearly been incentivized by the NSA to do this well." The contract announcement specified that CSC will receive monetary incentives to hire the workers and offer salaries and benefits that are equal to or better than what they currently receive.

An NSA spokesman said more workers could shift to the CSC team's workforce voluntarily if they want to do so. But targeted employees can also apply for other available jobs within the NSA, and no one at the agency "will lose their employment," he added.

"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, Va. Contracts of this size "add such a degree of complexity that they require extraordinary effort," he noted.