Education will test GSA's data center services

Education officials said they plan to use the General Services Administration's
governmentwide data center services contract to outsource the department's entire suite of
student loan and financial aid systems, starting with the National Student Loan Data
System (NSLDS).

Jerry Russomano, director of program systems service for Education's Office of Post
Secondary Education, said NSLDS currently runs on an IBM Corp. mainframe environment
managed by Raytheon E-Systems Inc. of St. Petersburg, Fla.

NSLDS is Education's central student aid database. It contains more than 1 billion
records covering more than 34 million past and current student loans and 14 million Pell

Agency officials use it to screen student loan applicants and electronically collect
loan transaction data from schools, lenders and guaranty agencies.

Russomano said Education's overhead savings may be limited because a vendor already
runs NSLDS. But the agency wants to cut its data processing expenses and follow through on
its strategy for integrating all student financial aid systems.

"Integration becomes a lot simpler when you shorten the wires. We'll let the three
vendors compete for it and eventually migrate to it," Russomano said. "We do
expect to garner significant savings from lower rates for basic computer reserve units and
by the volume of transactions. Commercial centers are very efficient and we expect the
economies of scale to generate savings."

Russomano said the new NSLDS vendor would gather all of the loan transaction reports
and handle such routine data center tasks as managing the database, copying records and
arranging for hot-site support. But Education officials will retain control over program
management duties, he said.

GSA's data center contractors are Computer Sciences Corp., SunGard Data Systems Inc. of
Philadelphiaand Unisys Corp. The companies all won indefinite-delivery,
indefinite-quantity contracts to provide agencies with a complete array of mainframe
processing services for agencies that run Unisys, IBM Corp., Digital Equipment Corp. and
Honeywell Corp. systems.

Using a physical consolidation, logical separation model, the vendors will divide
mainframes at their processing facilities into domains for each agency customer. Within a
particular section, an agency will run its data processing operations like a standalone

John Ortego, deputy GSA commissioner for information technology integration, said the
program is designed to help agencies meet the White House mandate for slicing the number
of government data centers in half to about 100 by next June.

Ortego said a number of agencies have expressed interest in the contract, but Education
is the first to sign up.

Yet more customers are likely after agencies finalize their data center consolidation
plans, Ortego said.

"The contract is attractive because of its speed, pricing and consistency with the
Office of Management and Budget's guidelines," Ortego said. "But some agencies
may be tentative because they have to be prepared to give up a data center. It's partly a
psychological issue."

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