LAN project forces agency, vendor to meet in middle







Hardball negotiations between Social Security Administration and Unisys Corp. officials
kept the Intelligent Workstation/LAN contract from careening off track during the last
year.


A year ago, “the contract was in a mess,” said T.J. Miller, Unisys vice
president and general manager of information technology solutions and federal
systems. 


“Our performance was marginal; our customer relations skills were lacking; we were
more dictatorial and not actively listening to the customer,” he said.


Miller took over as IWS/LAN manager early last year, only weeks before IWS/LAN’s
problems began to heat up. The vendor was having trouble finding a source for the 100-MHz
PCs it was delivering under the contract, and lawmakers on Capitol Hill began questioning
the low clock speed of the PCs Unisys was installing agencywide.


Today, the seven-year, $280 million contract is meeting SSA’s requirements and is
only three weeks off schedule, said Kathleen Adams, SSA’s assistant deputy
commissioner for systems. Unisys is installing PCs in about 75 offices a week and expects
to complete the rollout by mid-May.


“A customer relationship that was once hemorrhaging is now solid,” Miller
said. “It is truly a partnership.”


Adams added, “The key is to bring a standard desktop configuration to SSA offices.
We want to put better systems in the front-line offices to better serve the public.”


The PCs Unisys is installing include 12,900 PCs that are speedier than the 56,500
100-MHz units specified in the original contract.


The clock speed of SSA’s PCs bought through the IWS/LAN contract has been a touchy
issue. Last spring, the buy sparked an inquiry by a House committee into whether the
systems could meet agency needs.


Agency officials, including SSA Commissioner Kenneth S. Apfel, have consistently said
that the 100-MHz PCs meet the agency’s needs. During the course of hearings last
year, officials said, however, that they would consider an upgrade if the price per PC
stayed the same.


Unisys and SSA were able to reach such a deal. A redacted version of the IWS/LAN
contract that GCN obtained through a Freedom of Information Act request said that of the
12,900 new PCS, SSA so far has bought 9,800 PCs at $899 each, 9,800 monitors at $192.50
each, 9,800 hard drives at $140 each, 9,800 mice at $30 each and 9,800 keyboards at $17
each. That comes out to $1,278.50 per PC.


SSA and Unisys officials refused to discuss PC prices or specifications in detail. A
source said there is a nondisclosure agreement between the agency and the company.


Darrell Blevins, the agency’s FOIA officer, said release of the information would
cause “substantial competitive harm to Unisys.”


SSA will use the additional PCs on existing LANs because the agency determined it
needed more PCs for employees in its Disability Determination Services offices, said Dean
Mesterharm, SSA’s deputy commissioner for systems. DDS offices handle disability
claims.


A system manager at a Texas DDS office said his office received 266-MHz Compaq Deskpro
EPs running Microsoft Windows 95.


The manager said the Pentium IIs come with 64M of RAM, 4G hard drives and 15-inch 511B
monitors from Daewoo Corp. of South Korea.


At a Washington state DDS office, the systems manager said he knows that his office
will receive 266-MHz or 333-MHz PCs but that he has not been told the brand.


The June 1996 contract required Unisys to install and support 1,742 LANs running
Windows NT 4.0. The vendor initially bought 100-MHz Pentium PCs from Win Laboratories Ltd.
of Manassas, Va., to replace the IBM Corp. 3270 dumb terminals employees previously used
to access data on IBM and plug-compatible mainframes [GCN, March 9, 1998, Page 38].


IWS/LAN ran into trouble last year when Unisys could no longer buy 100-MHz PCs because
Intel Corp. had stopped manufacturing the 100-MHz Pentium chips.


Unisys offered SSA Pentium II PCs. But SSA officials balked because Unisys wanted to
sell them to SSA at Year 1 prices and the contract required Unisys to drop prices by half
in Year 2 [GCN, April 6, 1998, Page 1].


SSA estimated that paying the Year 1 premium for the PCs would drive up the
agency’s contract cost by $27 million.


To solve last spring’s contract problems, Miller said he reorganized the Unisys
team and lured Lonnie Essex away from Network Equipment Technologies Inc. of Redwood City,
Calif., to run the project.


Miller then met with senior SSA officials and ultimately hammered out a series of
contract modifications. Miller said Unisys is supplying the faster PCs at roughly
equivalent and “fiercely competitive prices.”

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