Is Pursuing Work on Army Business Systems Still Worth It?
Published: April 02, 2013
Army business systems are massive, complex, and well-funded efforts. Although some deployments of Army Enterprise Resource Planning (ERP) systems have been underway for years there may still be business opportunities related to them that are worthy of bid and proposal dollars.
In February 2013, the Defense Department’s Office of the Inspector General (DODIG) published Report No. DoDIG-2013-045 entitled Army Business Systems Information Technology Strategy Needs Improvement. This report concluded that the Army Office of Business Transformation (OBT) had not developed and implemented a comprehensive strategy for “adequate governance and program management” of its four large Enterprise Resource Planning (ERP) systems: the Global Combat Support System-Army (GCSS-A), General Fund Enterprise Business System (GFEBS), Integrated Personnel and Pay System-Army (IPPS-A), and Logistics Modernization Program (LMP). The estimated life cycle cost of implementing these systems is $10.1 billion and during its investigation the DODIG concluded that the lack of a comprehensive ERP implementation strategy puts the Army at risk of not being able to achieve full financial statement audit readiness by fiscal 2017.
The DODIG’s report got me wondering if there might still be business related to Army ERPs that is worth pursuing. On one hand, these are mature systems the development and deployment of which has been underway for a long time. On the other hand, $10 billion is a lot of money and vendors are always searching for more work. As I pondered the worthiness of dedicating scarce bid and proposal dollars to competing for ERP related work, I ran across this chart illustrating the upcoming milestones for each of the four ERP systems:
This chart prompted me to go back to last year’s Exhibit 300 Business Cases for the four systems in question. Reading these made me realize there are some potential gaps between the deployment dates and the major contracts in place supporting the systems. For example:
- GFEBS – Accenture’s GFEBS Support Contract # N0010404AZF12 officially expires in June 2015
- GCSS-A – Northrop Grumman IT’s, GCSS-A Support Task Order # 1, ITES-2S Contract # W91QUZ07D0005 officially expires in September 2017
- IPPS-A – Booz Allen Hamilton’s System Integration Services for IPPS-A Task Order # 2Y09, ITES-2S Contract # W91QUZ06D0019 officially expires in June 2013. A follow-on contract for Increment II is being competed now.
- LMP – CSC’s Wholesale Logistics Modernization Contract # DAAB0700DE252 officially expires in December 2016.
The impending expiration of the Accenture contract for GFEBS support and the current competition of a follow-on for IPPS-A illustrate the potential here. There are of course no guarantees that sustainment contracts for these systems will be competed in the future, but given the size and complexity of these systems I think it is reasonable to expect that follow-ons will be needed. Take LMP as an example. LMP has been deployed, but sustainment services for some posts and installations are still required. In fact, the Telesto Group provides these services for LMP at Anniston Army Depot (#W911KF12C0020).
Army program managers also have an ongoing need for Independent Verification and Validation (IV&V) work and program management support for these systems. Program offices across the DoD have been shedding government personnel for years in favor of contract personnel. Continually frozen federal salaries and efforts to shrink government should continue that trend, meaning contract personnel will be hired to step into the breach.
Finally, there is an ongoing need for work related to the Army Enterprise Systems Integration Program (AESIP), which converges all of these ERP systems. SAP’s Contract # W91QUZ10F0012 for AESIP Hub Services & Common Operating Environment Convergence just expired in March and recently two awards for AESIP enterprise infrastructure services were made. More are expected.
Wrapping up, my point is to illustrate that even though the Army has been implementing its ERPs for decades it is not too late to get in the game. Ten billion dollars is a lot of money and dedicating some of your scarce bid and proposal dollars to compete for it could be well worth the expense.