NASA signs decade-long, $2.5B outsourcing pact with HP

Computerworld - WASHINGTON -- NASA has signed a $2.5 billion, 10-year outsourcing contract with Hewlett-Packard, to meet it desktop, mobile and other computing needs.

The federal space agency announced late last week that it had signed the agreement with HP's Enterprise Services unit in Herndon, Va., formerly known as EDS. HP acquired Electronic Data Systems, or EDS, for $13.9 billion in 2008.

Under the contract, HP will manage NASA's personal computing hardware and software, mobile IT services, peripherals, accessories and supporting infrastructure.

NASA, which spends about $1.8 billion annually on IT, has 80,000 desktops and laptops.

The contract has a four-year base period and two three-year renewal options.

Ray Bjorklund, a vice president at consulting firm Federal Sources in McLean, Va., believes 10-year contracts are too long.

"Technology changes rapidly and the methods of contracting and purchasing also changes," said Bjorklund. "If you have a contract that is too long both the government and the contractor can get set in their ways and not necessarily embrace better ways of doing things."

Bjorklund said that seven years is about the average for contracts of comparable value. Even though the HP contracts include two options for renewal, government agencies almost always exercise the renewal option, he added.

Bjorklund did note that long contracts can help the contractor better plan ways to keep costs down over the lifecycle of the contract.

NASA's contract with HP is part of its IT infrastructure integration program, which includes adopting management practices that align with the IT Infrastructure Library (ITIL), along with improved security.

Defense contractor Lockheed Martin has been providing outsourcing desktop services for NASA.

In Feb. 2010, Lockheed received an extension of its NASA contract continuing through Oct. 31. The extension, valued at $230 million, called for Lockheed Martin to support NASA's desktop hardware, personal digital assistants, telephone operations and network services.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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