Service readies RFP for $1 billion logistics systems modernization

After months of delay, the Army soon will release a $1 billion request for proposals
for the modernization of its antiquated logistics systems.

At stake are the jobs of more than 500 civilian employees at the Army’s Industrial
Logistics Support Center in Chambersburg, Pa., and its Logistics Systems Support Center in
St. Louis. The centers support the service’s logistics systems.

Four vendors—Boeing Co., Electronic Data Systems Corp., Lockheed Martin Corp. and
Raytheon Co.—are expected to bid for the Wholesale Logistics Modernization contract
after the Army releases the RFP late next month. The service plans to award the contract
to a single vendor early next year.

The Army Materiel Command originally wanted to release the RFP earlier, but language in
the fiscal 1999 Defense Department authorization bill restricts any attempts to outsource
DOD jobs to the private sector.

“As long as our Congress has a statute that requires that we follow certain
procedures when we replace full-time government employees with contractors, I will always
follow that law,” said Lt. Gen. James Link, deputy AMC commander, at the Association
of the Army’s recent annual meeting in Washington. The service’s
Communications-Electronics Command at Fort Monmouth, N.J., is handling the buy.

“But that doesn’t mean we can’t request a waiver to that law,” Link
said. “We are trying to get away from an old way of doing business to a new way of
doing business.”

Through the contract, AMC plans to modernize its logistics processes and systems by
adopting commercial business and systems practices, Link said. AMC’s logistics
systems include the Commodity Command Standard System (CCSS) and the Standard Depot
System, both massive legacy systems.

“We have people in St. Louis and Chambersburg [Pa.] who have been extremely good
in maintaining these systems, but we’re looking for a waiver in the privatization
rule … to allow us to make outsourcing part of the logistics modernization
effort,” Link said. “Our intent has always been to take care of those people to
ensure a soft landing with a contractor.”

The winning vendor, for instance, might offer incentives to current DOD civilian
employees who choose to leave government service for employment with the company or its
subcontractors, Link said. Bidders must outline hiring plans for the employees affected by
the outsourcing effort, he said.

“We are attempting to divest ourselves of in-house responsibility for developing
those logistics systems and instead leveraging people—much smarter than we
are—in industry to design those systems for us,” Link said.

The Army uses CCSS for stock control, supply management, cataloging, provisioning,
procurement, maintenance, security assistance and financial management of supply items.
The system lets the service order, manage, sell and account for mission-critical
commodities such as ammunition, parts and supplies worth roughly $23 billion annually.

CCSS, managed by the St. Louis center, consists of more than 20,000 PCs and 561
subsystems that support 5,000 applications and include 10.2 million lines of code. Written
in Cobol for IBM mainframe systems, the programs have been repeatedly patched and
enhanced, Link said.

“This is the modernization of what’s been around in the Army since I was a
second lieutenant 28 years ago,” said Anthony Valletta, the former acting assistant
secretary of Defense for command, control, communications and intelligence, earlier this

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