A lot of my friends
are involved in the Military and in Defense related businesses. They are
getting quite concerned about the effects of the DoD sequestration and what it
will do to the economies around the bases and facilities where there may be
huge layoffs. It will be an anxious few
months as we wait to see what happens. In these conversations with my friends,
and as the owner of a third party support business, I have identified three
ways the DoD could minimize the effects of sequestration and reduce their
ongoing IT expenses.
First, the DoD should require that their IT vendors give
them license transferability on all of their software and firmware products.
This would allow the DoD to move their licenses around to other departments and
facilities and thereby reduce their costs of upgrades and support. License transferability is provided to
leasing companies from the manufacturers to protect the leasing companies’
residuals; why shouldn’t the DoD receive the same financial benefits?
Second, the DoD should require all service and support bids
be opened up to qualified third party independent support organizations rather
than restricted to the OEM service and support organizations. Currently, the
DoD support and bidding process favors the OEM’s and this costs the DoD a
tremendous amount of money. The manufacturers systems of opportunity
registration further restricts competition amongst their dealers, and the lack
of open bidding supports inflated pricing by the OEMs.
* "The Federal Government spent
$2,034,269,948 on new equipment while only spending only $9,114,676 on
refurbished. A resounding 99.6 percent of Federal IT dollars was spent with
OEMs and OEM authorized resellers."
* "Still others [OEMs] issue
fictitious list prices. These can be a much as 200 to 300 percent higher than
what they will charge a good customer, i.e., they can offer the perception of
huge discounts to end customers while asking independents to pay much higher
list prices for the same product or part."
Third, Congress could require that the
DoD maintain IT systems for a 7 or 10 year life. This would force the IT vendors to extend their product life cycles or
encourage the manufacturers to partner
with legacy service companies to take over the extended support contracts for their older systems. If fully implemented,
this would encourage manufacturers to concentrate on technological improvement while
service companies focus on providing outstanding technical support, creating an
environment of both IT innovation and sustainability.
So there you have some good solid
savings that could come out of the DoD Sequestration situation without
affecting our Military readiness at all. Perhaps this could turn out to be an
opportunity for the DoD to become a more efficient organization in the way it
acquires and maintains the IT equipment that it purchases and maintains. While it seems unlikely, there exists the possibility
that at least one segment of the DoD bureaucracy can be changed into an
affordable and efficient organization.