NSA reduces its IT staff by outsourcing legacy applications

After a couple of months’ work, the National Security Agency is touting its
program to outsource legacy applications as a success.


Under the five-year, $20 million Breakthrough Program contract awarded to Computer
Sciences Corp. last summer, NSA is outsourcing 20 legacy applications [GCN, Aug. 31, 1998, Page 3]. NSA is using savings
from the reduction in personnel costs to pay for the contract. Under the contract, CSC is
paid based on the number of NSA employees it hires to run the applications.


As of late last year, CSC had hired 35 of the 52 NSA employees who maintain legacy
systems for the agency, and the company is a year ahead of schedule in meeting its
contractual requirements.


The Breakthrough Program is a model for government outsourcing and an example of how
government and industry can share the risks and rewards of outsourcing projects, systems
officials said.


“If NSA can carry out outsourcing, anybody can,” said Glenn Giles, general
manager for Keane Federal Systems Inc. of Rockville, Md., a subcontractor to CSC on
Breakthrough. NSA could have obtained waivers from the administration’s outsourcing
requirements, but it chose to find a way to make outsourcing work for it, he said.


Steven Kelman, professor at Harvard University’s John F. Kennedy School of
Government, pushed the share-in-savings concept when he was the administrator of the
Office of Federal Procurement Policy. Under the concept, a contractor earns money based on
the savings a government agency recoups.


“It had to be a win together or it wasn’t going to happen,” said Tim
Sheahan, vice president and general manager of the intelligent business unit for
CSC’s defense group.


At NSA, the goal was to get CSC to hire its employees, said Stephen Tate, chief of
NSA’s Strategic Directions Team. “We wanted to redirect efforts of our existing
employees to higher utility projects for the existing money,” Tate said at the recent
Federation of Government Information Processing Councils’ Acquisition Management
Conference in Falls Church, Va.


Tight budgets have forced NSA to rethink the ways it funds modernization efforts, Giles
said.


“You can’t modernize without funding, but you can fund without
modernizing,” he said.


With Breakthrough, NSA is outsourcing non-mission-critical applications. Tate said the
work will be continuous because as NSA replaces some applications, CSC will take on
management of other legacy apps. 





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