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US spy agency sets timetable for upgrade contract

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CIOL Bureau
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Jim Wolf

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WASHINGTON: The US National Security Agency said on Monday that it planned to

award by the end of next month a landmark contract valued at up to $5 billion

over 10 years to upgrade its non-spying computers and communications backbones.

"We expect to make a contract decision by July 31st," the secretive

Defense Department arm told Reuters in pinning down a timetable for the deal

precisely for the first time. More than 15 companies have formed three alliances

to compete for one of the biggest handoffs to outside contractors of sensitive

work previously reserved to US government employees.

The deal involves providing broadband computer services other than those used

for the agency's core mission of eavesdropping on foreign communications and

cracking foreign codes. Leading the three competing teams are, respectively,

AT&T Corp., Computer Sciences Corp. and privately owned OAO Corp. of

Greenbelt, Maryland.

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Primary members of the AT&T team are IBM Corp., Lockheed Martin Corp.,

and employee-owned Science Applications International Corp. CSC's top partners

are Northrop Grumman Corp., General Dynamics Corp. and TRW Inc.

OAO's team includes Electronic Data Systems Corp., Raytheon Corp., Coleman

Research Corp., a unit of L-3 Communications Holdings Inc., Getronics NV

WorldCom Inc. and OAO Technology Solutions Inc. In written replies to questions,

the agency said that, assuming everything went as planned, it expected the

winning team to begin running its information technology infrastructure on or

about November 1, 90 days after the contract award.

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Milestone for secretive agency



The contract is a milestone for the National Security Agency, which led research
and development of the world's most powerful computers to carry out its job of

communications interception and guarding classified US networks.

Electronic surveillance networks used by the Fort Meade, Maryland-based

agency to gather "signals" intelligence are not part of Project

Groundbreaker, as the outsourcing program is dubbed. Instead, the government

will hand over responsibility for modernizing the infrastructure that underpins

the agency, offering the winning team financial incentives based on yardsticks

for performance worked out in association with business technology advisory firm

Gartner Group Inc. of Stamford, Connecticut.

In so doing, it will put the winning team in charge of enough cabling to

connect the US East and West Coasts, storage capacity to warehouse the Library

of Congress and computing power equal to communications giants BellSouth and

Sprint combined, agency spokeswoman Lisaanne Davis said.

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Specifics about the selection process have not been made public. But the

bid-evaluation process involves three main areas: personnel; technology and

management and price, Davis said. In addition, the agency is mandating that at

least 25 per cent of the project's dollars go to small business subcontractors.

Contract value to be determined



The contract's exact value will be determined at the time of the award, based on
the winner's proposal, the agency said. The winner will be well positioned for

what is expected to be a booming market in outsourcing of such sensitive and

secure services by both the US government and financial services companies,

including banks and insurance companies.

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"Gee, if they can provide service to the National Security Agency, they

should be able to provide service to us," said OAO President Emmett Paige,

theorizing on the winner's likely marketing pull. Paige, assistant secretary of

defense for command, control, communications and intelligence from May 1993 to

May 1997, said such outsourcing deals represented the government's best hope for

keeping up with the rapid pace of technology improvement.

On Oct. 6, the Navy awarded EDS an innovative contract worth at least $6.9

billion to create an internal information network linking ships, bases and

service personnel worldwide. That program, to build a Navy-Marine Corps

Intranet, outlined the network's required performance measures without detailing

how the contractor must deliver them.

As the prime contractor, EDS can earn hundreds of millions of dollars extra

if it satisfies individual users, directs large parts of the project to small

businesses and delivers a high, and measurable, degree of network security. It

also may earn billions if all options are exercised.

(C) Reuters Limited 2001.

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