DLA awards $389.8m modernization contract

DLA awards $389.8m modernization contract

DLA's David Falvey says the agency had no choice but to replace two Cobol systems.

By Bill Murray

GCN Staff

The Defense Logistics Agency has awarded its Business Systems Modernization contract to Andersen Consulting of Chicago.

Through the five-year, $389.8 million program, DLA will deploy enterprise resource planning software from SAP America Inc. of Newtown Square, Pa., and supply-chain software from Manugistics Group Inc. of Rockville, Md.

The logistics agency will retire two legacy systems, the Standard Automated Materiel Management System and the Defense Integrated Subsistence Management System, by October 2004, said David Falvey, DLA's Business Systems Modernization program manager at Fort Belvoir, Va.

The two Cobol mainframe systems are more than 25 years old and use flat-file databases.

Falvey said the agency had no choice but to replace the systems. New technology is required if DLA expects to begin using the Web to handle transactions as directed by the Joint Chiefs of Staff in the Joint Vision 2020 report [GCN, June 5, Page 1].

The modernization is part of a broader DLA initiative to lower costs and provide better support to Defense Department operating forces. To meet its goals, the agency plans to become a manager of suppliers rather than a manager of inventory, Falvey said.

DLA wants a system that will let ordering clerks throughout DOD make supply queries online, improve delivery time and give commanders immediate access to stock information, Falvey said.

The first task order under the new contract, which DLA plans to issue next month, will focus on creation of a blueprint for the system, Falvey said.

To fund the project, DLA will use operations and maintenance funds for its legacy systems. 'We're managing BSM just as we would a major weapons system,' by first showing how the system meets DLA's mission needs, said Falvey, who spent 20 years as a Navy officer and is a captain in the Naval Reserves.

Prototype is next

DLA has DOD approval to develop the ERP concept. It will need further approval to deploy a prototype, which it wants to do in 2002. The plan is to roll out a fully operational system the following year. The deployment would take three years, Falvey said.

DLA made the award through a General Services Administration schedule contract.

In December, DLA officials invited six vendors to submit bids, said Eric Stange, director of Andersen Consulting's global defense industry practice. Besides Andersen, Computer Sciences Corp., Electronic Data Systems Corp. and Hewlett-Packard Co. submitted bids.

The agency issued no technical requirements, Falvey said. Instead, 'we showed them what needs to be the outcome from the software, as opposed to how the vendor should do it.'

He expects, however, that the ERP systems will incorporate Oracle Corp. software because DLA already uses Oracle relational databases, and 'we will be capitalizing on our existing foundation.'

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