IT looking like a winner as U.S. military awards $14.4 billion over last four months
THE MIL & AERO BLOG, 21 July 2015. The U.S. Department of Defense (DOD) has been ordering military information technology (IT) and IT services at a dizzying pace over the past four months, awarding IT contracts worth at least $14.4 billion.
The latest IT blockbuster came just last Friday when the U.S., Defense Intelligence Agency (DIA) in Washington announced 50 companies that will compete for a pot of money worth as much as $6 billion for the Information Technology Enterprise (E-SITE) program.
The E-SITE contract will provide IT services for DIA, combatant commands, the military services, and partner intelligence agencies. It involves system design, fielding, and maintenance of intelligence and command and control (C2) assets.
Last month the U.S. Marine Corps announced a $26.4 million contract to CDW Government (CDW-G) in Vernon Hills, Ill., for 22,001 general-purpose laptop computers as part of the Next Generation Enterprise Network (NGEN) computer refresh program.
Also last month the U.S. Army announced contracts worth $652 million to six IT companies for the Information Technology Enterprise Solution-2 (ITES-2S) program. The Those contract modifications bring the value of the ITES-2S program to $1.15 billion.
Late last April came a potential $469 million contract from the U.S. Defense Information Systems Agency (DISA) at Fort Meade, Md. to Hewlett-Packard for the Global Content Delivery Services (GCDS) program to deliver digital content and cyber security over the Defense Information System Network (DISN).
Earlier in April came another IT blockbuster, a potential $5.8 billion seven-year contract from the U.S. Air Force to 17 IT companies for the Network-Centric Solutions-2 (NETCENTS-2) Network Operations and Infrastructure Solutions program.
The NETCENTS-2 Network Operations contract involves network management and defense; services-oriented architecture infrastructure; enterprise-level security and management and implementation and operations; telephony infrastructure; and other services.
At the end of March was another Air Force NETCENTS-2 contract, this one for application services. This $960 million NETCENTS-2 Application Services contract involves 20 IT companies, which will provide IT services such as sustainment, migration, integration, training, help desk support, testing and operational support.
Generally these kinds of IT contracts pick a pool of contractors that will compete for orders over the duration of the contract. The military also isn't obligated to spend the full amount of the contract.
Usually each contractor receives a small token payment up-front, and then starts competing for orders. There's little money that's guaranteed; there are winners and losers in most of these kinds of contracts.
For our segment of the aerospace and defense industry that concerns real-time mission-critical embedded computing, routine IT work may not sound sexy, but few could argue that $14.4 billion in DOD IT contracts over the course of four months is a lot of money.
It's also good news for the military technology community that hasn't had a lot to cheer about over the past couple of years.