Anticipation Grows for NETCENTS 2

Government contractors can look forward
to soon commenting on a draft request for proposal
on a new version of the Air Force’s
Network Centric Solutions contract.

Government contractors can look forward to soon commenting on a draft request for proposal (RFP) regarding the Air Force’s Network Centric Solutions 2 (NETCENTS 2) contract, an IT products and services buying program that has the potential value of more than $9 billion dollars over five years.

Analysts are predicting that the new version of the program will divide it into separate parts for products, services and services provided by small business.

The draft RFP should be available in only a few months, according to Ann Lee, NETCENTS program manager at Maxwell AFB, Gunter Annex, Ala. NETCENTS is administrated at the 754th Electronic Systems Group at Maxwell.

NETCENTS 2 is a follow-on to the original five-year, $9-billion NETCENTS contract, which expires in September 2009. Put in place in 2004, the current NETCENTS 1 program includes engineering, software development, system integration, security and telephone services, plus voice, video and data hardware and software products.

Current NETCENTS vendors are anxious to receive the draft since they regard the first NETCENTS contract as being very efficient and beneficial to both government buyers and suppliers.

Although less than 30 percent of the $9 billion NETCENTS 1 contract has been awarded so far, government officials and their vendors regard the original NETCENTS program as a big success and believe it can be improved to the point where it can offer even wider cost advantages and savings to users.

“NETCENTS provides the full gamut of networking capabilities—typical products such as routers, switches and so on—and also upgrades and replacements of existing networks from construction to enterprise engineering and consolidation,” said Bill Schuhle, NETCENTS program manager for Lockheed Martin. “From our perspective, the percentage of products has been much higher than we anticipated—approximately 80 percent. Recently, however, there have been more engineering type RFPs coming out, which is more consistent with our expectation. In addition, the Navy is beginning to bring additional work on contract, which is a very good sign for NETCENTS 2.”

NETCENTS has resulted in the processing of thousands of orders. In February, for example, the Air Force Combat Information Transport Systems program office awarded Telos a task order under NETCENTS to implement the Second Generation Wireless Local Area Network Expansion at 98 Air Force locations worldwide. Telos will conduct site surveys, design the expansion to the core wireless local area networks, procure components, integrate the existing wireless infrastructure into the new WLAN systems, conduct engineering studies and provide on-site training and a 24x7 call center for ongoing support enterprisewide.

Learning Curve

Feedback indicates that while the contract has not been perfect, customers appreciate having an efficient and responsive vehicle by which they can submit bids for awards.

“NETCENTS is a new type of contract vehicle,” said Schuhle. “With anything new comes a learning curve in terms of how to best utilize the contract.”

A major advantage of the vehicle is that it helps expedite the procurement process. “Its pre-negotiated contract terms allow the customer to contract in days rather than weeks and months,” he said.

Schuhle commented that he anticipates that in the future there may be an opportunity for broader use of the contract vehicle by agencies outside of the Air Force.

Consequently, the Air Force is currently busy at work to present a draft RFP this spring, from which it will solicit vendor input.

“We are trying to get this version awarded before the current NETCENTS expires. We want one in place to follow that one,” commented Lee. “We are working on the acquisitions strategy right now. We want to improve NETCENTS as much as we can for our customers as well as look at additional capability. We want this to be a vehicle they will continue to use.”

Part of that strategy involves splitting the NETCENTS 1 contract into three parts: services, products and services-small businesses and creating a NETCENTS 2 contract that would provide network-centric information technology, networking, telephone equipment and security; voice, video and data communications products; and systems hardware and software. In the original NETCENTS contract, all three elements were wrapped into one.

“The contract is currently in place to address these areas,” said Schuhle. “However, by splitting out the product portion of the contract in NETCENTS 2 the customer may receive better pricing on products by going directly to the OEMs and significant product resellers. Right now, there is a pyramiding of overheads on product procurements since these companies are below the current NETCENTS primes.”

Lee pointed out that the impetus for dividing the contract into the three parts came from reviews by Department of Defense and Air Force officials.

“There were several things that came from these write-ups,” she said. “One was a discussion of the code that was chosen. We looked at that and felt that breaking them apart would allow us to use or choose codes that are appropriate to their proponents for work.”

Officials anticipate that the biggest benefit that will come from NETCENTS 2 will be cost savings.

“Everything right now is basically under integrators,” Lee said. “There are levels of pass-through that we think we can cut out with the products contracting centers.”

According to a report released last fall by INPUT, a market research firm, NETCENTS 2 should open the program to more competitive bidding via more product and solutions vendors than NETCENTS 1.

Schuhle remarked that NETCENTS is already extremely competitive across the majority of the solicitations. “Multiple primes are bidding on almost all contracts,” he said.

A recent report from INPUT Executive Program, a business development peer group, anticipates that solutions will likely to play a significant role in the upcoming second version of NETCENTS contract. The report surmises that what will make NETCENTS 2 different from its predecessor is that for the first time the new contract will encompass DoD’s Information Technology Services (ITS) blanket purchase agreement.

NETCENTS and ITS share many of the same prime contractors. Not only would the government benefit from cost savings and a wider selection of vendors, but also more providers would have a greater opportunity to grab a portion of the business available from this large contract vehicle. Like NETCENTS 1, NETCENTS 2 would be mandatory for the Air Force, and would be available to all federal agencies for a fee.

Currently, four large and four small-business prime contractors, along with hundreds of participating equipment manufacturers and service providers, participate in that contract. The large contractors are Booz Allen Hamilton, General Dynamics, Lockheed Martin, Northrop Grumman. The small businesses are Centech Group, Multimax, NCI and Telos.

End-to-End IT

While vendors say it is too soon to comment specifically on NETCENTS 2, since the pre-RFP has not yet been released, some current vendors don’t hesitate to say they would be interested in participating in the follow-on contract.

“General Dynamics has effectively delivered on key Air Force network operations components awarded to date under the contract,” said Steve Coughlan, vice president, NETCENTS, for General Dynamics Information Technology. “Our goal is to help continually improve the Air Force’s globally interconnected, end-to-end set of IT capabilities, processes, people and services necessary to achieve information superiority and empower the warfighter.”

General Dynamics has bid vigorously on NETCENTS opportunities, receiving awards of more than $125 million in just the first two years of the program. An example of the company’s successes is a $5.5 million task order for the Automated Digital Network System (ADNS) Increment III, which called for General Dynamics to develop, document and demonstrate two engineering-design model systems and two shore-demonstration model systems to serve as fully meshed communication networks linking seaborne and terrestrial assets and personnel.

ADNS is the Navy’s program of record for wide area networking. The program consists of multiple components that are fielded on surface ships, submarines and at on-shore communications facilities. ADNS Increment III is a requirement for a fully meshed network with increased throughput capability, in support of real-time, mission-critical data transmission with a high degree of reliability, capable of supporting the latest internet protocols.

As one of the four large NETCENTS prime contractors, General Dynamics works closely with customers to deliver cost competitive, standards-based solutions that meet the Air Force’s IT requirements.

“From modernizing worldwide fixed-base IT infrastructure to providing state-of-the-art network management and information assurance capabilities to increasing capability and reducing life cycle costs, the General Dynamics team has delivered consistent effective solutions across the spectrum of NETCENTS requirements from its inception,” Coughlan said. “As a leading IT integrator, General Dynamics continually strives to facilitate that process by delivering effective, efficient and compatible solutions and capabilities to support the Air Force’s transformational objectives, and our team looks forward to continuing that partnership well into the future through the NETCENTS 2 contract.”

NETCENTS contractors see the competitive landscape among vendors important for the continuation of this program. For one, the fact that each prime contractor must be able to address a broad spectrum of capabilities from construction to enterprise network development and sustainment drives significant teaming structures.

“When establishing a team, Lockheed Martin first defines the full landscape of capabilities required by the customer in the networking area. We then determine the specific industry leaders that will help us provide the customer with a best value solution,” commented Schuhle.

Partnerships with contractors and subcontractors (team members) play a key role to NETCENTS as they strive to provide customers with the best value solution.

“In this capacity we utilize significant levels of small business to help create that solution,” stated Schuhle. “As competition increases, we look to minimize pricing which means that we look to outsource areas that can be provided by other businesses more efficiently, this is where subcontracting comes into play, and in many cases small businesses.”

Total Solutions

A slightly different perspective on the program comes from Telos, which is one of the small business prime contractors.

“While Telos responds to almost all opportunities issued under NETCENTS, we place a particular emphasis on the total solutions solicitations issued under the contract,” said Ralph Buona, Telos vice president of corporate business development.

In addition to the contract for second generation wireless networks at 98 Air Force locations worldwide, the company was recently chosen to stand up the Air Force Application Software Assurance Center of Excellence. Other key Telos wins are the Information Transport Solutions (ITS) awards the company received to upgrade the communications infrastructure of entire Air Force bases.

“We are currently performing ITS work at Little Rock AFB, Ark., and Lajes AFB, Portugal,” he revealed.

Like other contractors, officials at Telos regard NETCENTS I an extremely successful contract.

“One of the contract’s attributes that has made it so successful is the ability for customers to order from NETCENTS in a decentralized manner,” Buona said. “This allows a very large, diverse pool of Air Force, DoD and other federal customers’ easy and unfettered access to the contract using their own contracting activity if they desire. This achievement is borne out by the fact that well over 4,000 RFPs and over 16,000 RFQs have been issued under NETCENTS to date.”

NETCENTS has also been very successful in providing broad-based solutions to entire programs and customer sets, or on an enterprisewide basis, Buona said. “The ability for customers to have a single, responsible party provide an entire solution including all services, product, implementation, testing and sustainment has been a key achievement of NETCENTS from a customer perspective,” he remarked. “The awards mentioned above are primary examples of these broad-based solutions.”

Although the Air Force has not finalized its acquisition strategy yet for NETCENTS 2, Buona urged that the new version take into account that in the end, NETCENTS is a networking contract and a solutions contract.

“There has been a lot of discussion about NETCENTS 2 taking a very different road,” he commented. “While some small improvements can be made, a radical departure from the structure of the current NETCENTS would take value away from the Air Force MAJCOMs and programs that use NETCENTS. NETCENTS is uncomplicated, which makes it easy for the customers, the acquisition folks and industry to quickly deliver results. Overcomplicating NETCENTS 2 is not in anyone’s interest.”

Buona did indicate that NETCENTS 2 should reserve a few awards for small businesses that are at the lower end of the “small” spectrum. But overall, he said, NETCENTS 2 needs to build on the successes of NETCENTS 1.

“Several billion dollars of orders have flowed through the contract in a little over three years and that is because of the factors listed previously,” he emphasized. “Straying too far away from those to build a ‘new look’ acquisition will cause end-customers to seek other contract vehicles for their solutions.” ♦