Senate seeks better Wang deal

Dissatisfied with a five-year services contract it awarded to Wang/I-Net Government
Services in 1992, the Senate last year renegotiated the contract based on the fixed-priced
model.


The McLean, Va., company provides installation, maintenance, help desk, LAN
administration and troubleshooting services for all Senate hardware and software. Senators
buy their own equipment but rely on Wang/I-Net for support.


A Senate staff member said the original contract had three pricing components. Under
the scheme, the Senate paid a flat fee for every PC installed, a separate price for help
desk support and another price for specific support work done in Senators' district
offices.


"For one thing, it created a huge billing process so complex that the Senate and
Wang/I-Net each allocated the equivalent of two full-time employees just for
invoicing," a Senate staff member said. "For another, because they were being
paid per piece, they had no incentive to improve."


Another Senate staff member complained that sometimes maintenance and installations
took too long.


The renegotiated contract is based on the dollar amount of the contract in previous
years but requires the vendor to perform a minimum level of service for a fixed price.


That minimum level is set based on the average level of work the vendor performed in
previous years.


"What we said was: 'We know how much and what type of work you get, and we know
how much it costs you to do it.' We also said, 'We know what your profit margin is and we
agree to factor in that margin in the renegotiated contract.' But we said that is the
maximum the Senate will pay," the staff member said.


To sweeten the deal and give the company incentive to provide the most efficient
service possible, the Senate agreed to pay a bonus if Wang/I-Net performed the same amount
of work with fewer employees.


Under the renegotiated contract, the Senate and the vendor also agreed that Wang/I-Net
would reimburse the Senate 50 percent of the difference between anything above its
agreed-upon profit margin and the total dollar amount of the contract.


For fiscal 1996, the Senate's share totalled $231,000. Senate staff members said the
Senate is pumping its savings back into administrative services.


Reggie Edmonds, Wang/I-Net Government Services' program manager for the Senate project,
said his company plans to recompete for the contract when it expires in October.


One Senate staff member said the Senate likely will delay putting out a new request for
proposals for a few months because the office of Sergeant at Arms is reorganizing its
support staff.


He said the Senate likely will extend Wang/I-Net's contract until it awards the
follow-on contract.


Wang/I-Net has 50 employees in Washington working on the Senate contract.


District offices receive assistance from Wang's nationwide hotline and can also get
on-site help from a Wang support office, usually within a couple of hundred miles, Edmonds
said.


The contract covers the Senate's 9,000 Compaq Corp. PCs and Apple Macintoshes, and
2,100 IBM Corp., Apple Computer Inc. and Hewlett-Packard Co. printers. Almost 8,500 of the
PCs are connected via LANs.


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