Why Outsource?

1. Lessons Learned and Critical Success FactorsA Thought Leadership Forum: University of MarylandCenter for Public Policy and Private EnterpriseQueenstown, Maryland Darryl A. SmithDeputy Program ManagerMonday, November 15, 2004

2. Why Outsource? • Share/transfer risks. • Increased need for system and product interoperability across the enterprise. • Need to improve corporate focus. • Recruitment and retention of skilled personnel. • No leverage to introduce world-class capabilities. • Lack of insight into true operating costs

3. NASA Strategy • Established Agencywide team that took a corporate perspective • Worked closely with other major Agency initiatives to ensure coordination and appropriate interfaces. • Examined other “Seat Management” endeavors. • Conducted Market Research • Developed Center Cost Baseline Concept • Requested that vendors propose both heterogeneous and homogeneous solutions. • Established an aggressive schedule. • Ensured availability to other Agencies through partnership with GSA • Communicated, Communicated, Communicated

4. Structuring the Contract • Invest heavily in requirements definition • A delicate balance of specifics and ambiguities • A “Keep it Simple” approach to metrics • Make it Performance-Based • Incentives for good performance • Fixed price • Perform due diligence before award • Establish a baseline commitment

5. The Implementation Challenges • Insufficient change management strategy; magnitude of cultural changes underestimated • Change from cost-plus to fixed price contracting • “Loss of control” by the customers • Ownership, level-of-effort personal support, “buy what you want, when you want it” • Strong emotional issue with the customer • Limited and inconsistent business processes to interface with ODIN • No Agencywide policy on ODIN implementation • Inconsistent scope across the Centers • Lack of authority in the ODIN Program Office • Inconsistent expectations among Agency, ODIN Program, ODIN contractors, and customers • Contractor performance and service delivery issues at the Centers

6. The Implementation Challenges - Continued Glenn Research Center - GRC Ames Research Center - ARC Goddard Space Flight Center - GSFC NASA Headquarters - HQ Stennis Space Center - SSC Langley Research Center - LaRC Dryden Flight Research Center - DFRC Kennedy Space Center - KSC Johnson Space Center - JSC Marshall Space Flight Center - MSFC 6

7. ODIN Organizational Structure NASA Chief Information Officer (CIO) (Code V) Legend CFO – Chief Financial Officer CIO – Chief Information Officer CO – Contracting Officer DOCO – Delivery Order Contracting Officer DOCOTR – Delivery Order Contracting Officer Technical Representative GSA – General Services Administration GWAC – Government-wide Acquisition Contract TMR – Technical Management Representative NASA CIO Board NASA CFO Community NASA/GSFC CIO Third Party Testing (IV&V) Contractor (Alterion) Agency ODIN Program Manager and CO GSA (GWAC) Tier One Original Equipment Manufacturers (OEMs) e.g., Apple, HP, Dell, Toshiba ODIN VENDORS: *Lockheed Martin *OAO SAIC CSC DynCorp Northrup Gruman Diginet(*)Denotes Active Delivery Orders NASA Enterprise/ Center DOCOTRs, TMRs & DOCOs 7

8. Contract Overview • GSFC awarded seven performance based, fixed-price, Indefinite Delivery/Indefinite Quantity (IDIQ) contracts in June 1998 • Contracts have a 12-year period of performance. • Centers award delivery orders up to 3-year period of performance • Current ODIN contractor and supported centers represented below: Lockheed Martin Lockheed Martin OAO* GSFC DFRC GRC ARC LaRC HQ JSC KSC MSFC SSC 8 * Wholly owned subsidiary of Lockheed Martin

9. Roles and Responsibilities • ODIN contractor is responsible for: • Selecting systems, products and services; • Establishing staffing levels; • Establishing SLAs with non-ODIN contractors; • Meeting the requirements for interoperability, functionality, and maintaining configuration control; • Complying with all applicable Agency IT standards; and • Asset/Resource Tracking • Government is responsible for: • Establishing IT standards; • Establishing Center-level Configuration Control boards (CCB); • Approving and funding infrastructure upgrades; • Maintaining “Smart Buyer” capability.

10. ODIN Seat Categories • Desktop: • General Purpose • Scientific and Engineering • Hardware Maintenance • Network Attached Device • Server • Web, Application, Computational, File • Intra-Center Communications • Phone, Administrative Radio, Public Address, Local Video, FAX, Remote Communications, Virtual Team Meeting Seat For each seat category, functionality and both standard and optional service levels are defined; catalogue options allow complete flexibility to tailor the seat to meet the end user’s requirements

11. What do I get for my monthly seat payment? • Standard services include: • Hardware and both application and system software acquisition, licensing, installation and maintenance • Periodic hardware and software technology refreshment, synchronized with current commercial offerings • Shared peripheral services (e.g., file, print, e-mail, etc.) • Asset management • IT Security • Help Desk support, training, system administration and other services • Network access and support, including network engineering, management, and upgrade planning • Local backup and restore • Moves, adds and changes

12. Help Desk • ODIN vendor is required to provide integrated customer support/help desk for all ODIN-managed services • Service includes: • Problem ticket initiation, tracking and resolution • Providing customer and service providers with system status and alerts • Monitoring systems to proactively determine, diagnose and resolve problems • Providing access to ODIN service offerings • Providing consultation services for all Triage level 1 software packages

13. Desktop Support and Refreshment • Desktop Hardware • 2 hr. contiguous to 3 working days Return to Service (RTS) • 1.5, 3, 4, or 5 year refresh cycle • Tier 1, Third-party certified equipment • Desktop Software • 2 hr. contiguous to 3 working days RTS • 6 or 12-month system and application software refresh • 3 levels of support • Triage Level 1 – Full Support • Triage Level 2 – Installation and pass-through • Triage Level 3 – ‘Drop/Ship’

14. Catalogue of Services and Commercial Components (CSCC) • Designed to augment the seat • Additional memory, larger monitor, etc. • Can include stand-alone services • Personal Digital Assistant (PDA’s – ie: Palm, Blackberry, etc..) • Additional Moves, Adds and Changes • Generally a one-time charge • Service/support for 3 years

15. Desktop Technology Refreshment • “Lemon Law” ensures reliable equipment • Technology Refresh Plan is based on inventory at beginning of delivery order • Third Party Testing Facility (Alterion) • Alterion performance ratings drive technology refreshment under ODIN • NASA/Alterion Partnership • Quarterly commercial market survey/benchmarking process establishes top performer for desktop seats (NASA funded) • NASA/Alterion web site publishes survey data • ODIN vendors work with OEMs to develop offerings • Alterion validates vendor-proposed systems • ODIN Vendor pays cost of validation benchmarking • System offerings are not acceptable until validated by Alterion

16. Infrastructure Management • Different from standard seats! • Title for all infrastructure (including replacements or upgrades) remains with the Government. • Infrastructure refresh requirements proposed/priced after due diligence. • Management of the necessary LAN communications infrastructure is expected to be bundled with each service offered. • Infrastructure upgrades approved and funded separately (by the Government). • Infrastructure inventory managed by the ODIN vendor.

17. Incentives • Transition Bonus • Up to $100k set aside for successful 180-day transition • Performance Retainage Pool (PRP) • 3% of sum of monthly seat prices • Available on 1st anniversary, then semi-annually • Tied to successful implementation of the ODIN Operating Model • Meets/Fails to Meet/Discretionary • Metric Performance Retainage Pool (MPRP) • 1% of sum of monthly seat prices • Tied to Level 1 Metrics • Meets/ Fails to Meet

18. Desktop Performance Metrics • Level 1 • Service Delivery (98%) • Frequency of action requests being responded to and successfully completed within the allotted time. • Availability (98%) • Unscheduled outages and # users affected • Customer Satisfaction (agreed to at DOSP and/or during Delivery Order Negotiations) • Measured using commercial/broad industry-accepted practices • Level 2 • Contractor Specific Metrics • 1st call resolution, hardware failure rate, switch latency, backbone utilization, etc. (the vendor determines the measurement in an effort to improve their performance) • Level 3 • Trend Metrics • Trend views of Level 1 and Level 2 metrics in 3-month or greater increments. (Measuring the contractor’s service level trends)

19. Features Summary • ODIN is a flexible contract vehicle that includes: • Automatic technology refreshment requirements, • Standards and architecture management mechanisms, • Government managed change control procedures, • Allowance for government ownership of assets where it’s determined to be in the Government’s best interest, • “Unwinding” provisions to allow transition of contractor owned assets at termination (to government or another contractor), • Allowances for installation and use of non-outsourcer provided hardware and software, and • Accommodations for unplanned requirements.

20. Current Status 20

21. Current Status - Continued • NASA • NASA’s 10 sites are operational • Delivery Order values ~$315 million • ~36,543 “fully supported” seats • ~8,322 network only • ~1056 Admin Radio seats • ~48,699 phones • 10 sites reviewing strategy for follow-on delivery orders • GSFC awarded their follow-on Delivery Order effective February 1, 2004 • ARC, DFRC, GRC and LaRC awarded their follow-on Delivery Order effective April 1, 2004 • HQ awarded their Delivery Order effective September 1, 2004 • JSC, KSC, MSFC, and SSC are currently negotiating their follow-on Delivery Orders

22. ODIN Delivery Order services selected reflect flexibility of interfacing with existing contracts and/or support requirements.

23. Current Status - Continued • Established a very strong ODIN team • Partnerships between Contractors, between Centers and between the Centers and Contractors • Annual face-to-face workshops, functional tiger teams, regularly scheduled telecons and meetings • Traceable and continuous improvements in the Delivery Order (DO) process resulted from successive lessons-learned • e.g., Center-unique DO mods used to overcome Master Contract ambiguities and to meet new Agency and customer requirements • Now have consistent and documented processes and procedures • Shared best practices, International Standards Organization (ISO) certifications • ODIN’s flexibility further demonstrated through the catalog • Enhanced Systems Administration • Latest technology monitors • Specialized processors

24. Performance Against the Objectives 24

25. Performance Against the Objectives - Continued • Focus NASA civil service personnel on core research and development activities • Reduced the amount of procurement involvement with securing ODIN services • Greatly reduced the level of civil servants involved with Asset Management

27. Performance Against the Objectives - Continued • Promote information technology systems and product interoperability • Over 36,000 desktops replaced since 1998. • No additional investment by NASA (acquisition, logistics, integration, data removal, disposal) • Enhance and optimize service delivery • No method of performance measurement was in place prior to ODIN • ODIN has implemented monthly and quarterly performance metrics to track vendor performance

28. On a scale of 1-5, with 5 being “Excellent,” only responses marked 4 or 5 are counted toward achieving this metric 28

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31. With ODIN • Documented asset baseline • Known, visible, reliablecosts • Predictable and “fixed”costs for future planning • No more “haves” vs.“have nots” effect • Prior to ODIN • No established baseline • Total cost of ownershipunknown • IT costs hidden in programbudgets • Investments made on available funding basis • Unequal access to technology Performance Against Objectives - Continued • Reduce cost and improve cost managementand cost containment • Before and after cost model is very different • ODIN seat costs are better than predicted and comparable to industry

32. $500 NASA Benchmark KSC* Gartner Average* Chevron* ODIN Business Case (low) ODIN Business Case (high) Update to Business Case (low) Update to Business Case (high) Gartner (low)** Gartner (high)** GSA HUD VDOT UTMB Baseline*** UTNB Contract*** NMCI General Purpose NMCI High End Business*** ODIN Average 450 400 350 300 Monthly Seat Cost 250 200 150 100 50 0 1996 2001 * Data from ODIN Business Case ** From State of Texas Study *** University of Texas **** Navy Marine Corp Intranet Data from ODIN Program Post Implementation Business Assessment Kelly, Anderson & Associates, November 2001 Seat Cost Comparison

33. ODIN Accomplishments • Established a very strong ODIN team • Partnerships between Contractors, between Centers and between the Centers and Contractors • Annual face-to-face workshops, functional tiger teams, regularly scheduled telecons and meetings • Traceable and continuous improvements in the DO process resulted from successive lessons-learned • e.g., Center-unique DO mods used to overcome Master Contract ambiguities and to meet new Agency and customer requirements • Now have consistent and documented processes and procedures • Shared best practices, ISO certifications • ODIN’s flexibility further demonstrated through the catalog • Enhanced Systems Administration • Latest technology monitors • Specialized processors

34. What’s Working • Civil Servant refocusing • Tech refresh • Over 36,000 desktops replaced since 1998. • No additional investment by NASA (acquisition, logistics, integration, data removal, disposal) • Interoperability and Security of Systems • Infrastructure support & upgrades • Current technology • Common metric and data reporting • Flexibility • Vendor Relationships!

35. What’s Working - Continued • Predictable cost baseline for ODIN provided services (Budget Management) • Filling the gaps • 508 Compliancy (CAP Support) • Seat Prices • ODIN has helped the Agency meet Presidential Management Agenda (PMA) goals

36. Lessons Learned 36

37. What Needs Work • Asset Management • Upgrade/New Product Rollouts • Help Desk • Attachment R Process Consistency • Customer Satisfaction Consistency • Catalog

38. Successful Management Techniques • Use Common Sense! • Involve your outsourcer in strategic planning (Partnership and Communication) • Be Flexible • Be Patient • Approach each problem with a “Win-Win” attitude • Don’t hold back information from your outsourcer • Trust, but verify • Limit line manager’s ability to circumvent the contract

39. Additional Questions?Please contactDarryl.A.Smith@nasa.govor call(301) 286 – 5250http://www.odin.nasa.gov 39