HONOLULU – Industry vendors could have a tough time making a profit under a new service-oriented architecture initiative spearheaded by the Defense Information Systems Agency, said a top official of a leading systems integrator.
Industry is struggling to determine a sound business case for the SOA approach, said retired Army Maj. Gen. David Bryan, vice president of the Northrop Grumman Defense Group, during a panel discussion at the annual AFCEA International TechNet Asia-Pacific conference.
DISA's goal is to buy information services on an as-needed basis rather than pay a company to build or license an application. Air Force Lt. Gen. Charles Croom, DISA's director, said last month that the agency would like to take this utility approach to acquire everything from data center computing capacity to command-and-control applications.
The initiative has the backing of John Grimes, the Defense Department's chief information officer and the assistant secretary of Defense for networks and information integration. Speaking at the 2006 Milcom conference last month, Grimes said it was time for DOD “to stop buying things and start buying services.”
But Bryan said the services business may be an unnatural approach for industry in an environment in which vendors have fewer big opportunities to pursue. In addition, more agencies are awarding contracts based on price, not best value.
DISA intends to stick to the services approach, which is a departure from the expensive software development efforts it has sought in the past, said Evelyn DePalma, DISA’s procurement director, another speaker on the TechNet contracting panel.
Industry does not fully understand the message, DePalma said. DISA took a utility approach to the Net-Centric Enterprise Services (NCES) contract earlier this year, looking to pay for instant messaging, chat and Web conferencing services as users sign on. But some bidders loaded their bids with software costs, as they tend to do with traditional contracts.
DISA awarded one NCES contract to IBM and still intends to award a second one, DePalma said.
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