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and conditions pre-negotiated with a variety of sources forboth products and services.”ESI Expands to Include Hardware and ServicesESI agreements extended to include technology servicesand hardware in 2002 at the request of the Business InitiativeCouncil. In a collaborative effort with DoD Enterprise ResourcePlanning (ERP) programs and the Office of the Secretary ofDefense, the first blanket purchase agreements for informationtechnology services were awarded for systems integration projectsusing commercial software packages.“ESI did such a great job negotiating commercial softwarelicenses that DoD leadership asked ESI to secure relationshipswith hardware vendors and IT service providers who implementcommercial software,” Bolton said.“This coincided with the business transformation effort byDoD ERP programs spending billions of dollars to modernizeDoD back-office systems. Establishing relationships with ITservice providers made a lot of sense because the cost of licensingcommercial software is just a fraction of the cost to get thesoftware up and running throughout the enterprise,” Boltonadded.The ESI systems integration BPAs secured more than justlabor hour discounts from service providers. The BPAs incorporatedcommercial best practices by capturing a firm’s implementationmethodology and enabling fixed-price methodologiesfor each phase and deliverable that led to results-basedpricing, not just time-based pricing.“Having access to the systems integrators’ methodology andpricing framework for a software implementation project madeus much wiser buyers when it came to choosing and negotiatingwith an implementation partner,” Cromley said.ESI Paves the Way for Federal-wide Software LicensingOne of the most significant changes for ESI was its expansionto support the federal SmartBUY initiative. When the Office ofManagement and Budget (OMB) decided to create a similar initiativefor the rest of the federal government through GSA in thefall of 2003, ESI participated in GSA’s SmartBUY launch team toshare ESI’s lessons learned and best practices.“GSA launched the SmartBUY program to leverage the softwarebuying power of the entire federal government,” said TomKireilis, acting deputy director of the Office of Infrastructure Optimization,in GSA's Federal Acquisition Service. “We knew thatESI achieved similar objectives for DoD and realized that the federalgovernment could benefit from many of the disciplines andpractices that ESI already had in place.”Since ESI and SmartBUY joined forces to collaborate, they haveestablished 22 ESI/SmartBUY co-branded agreements that allowall federal agencies to procure software, leveraging the collectivenegotiating power of the federal government.“OMB further raised the bar on the co-branded SmartBUY/ESI agreements when they decided in 2007 to include state andlocal government in the solicitations for products to protect dataat rest,” said Dr. Margaret Myers, former principal director for theDoD Deputy CIO. “The DoD-GSA team successfully overcamemany challenges to make this happen and awarded the firsteveragreements that include state and local governments.”In September 2003, the director of Procurement and Ac-“ESI changed how the entire department acquires andlicenses commercial software. Without ESI, we wouldnever have leveraged our buying power, understood ourdepartment-wide requirements, significantly reducedthe labor required to manage software licenses, or haveachieved the dramatic reduction in costs of severalbillion dollars. I applaud the ESI team for its success andcontributions over the past 10 years.”DoD Deputy CIO Dave Wennergrenquisition Policy for the DoD and the DoD CIO jointly signed aSmartBUY policy to designate the DoD ESI as the implementationagent for SmartBUY throughout the DoD. This policy wasupdated in December 2005.ESI Achieves Central Role for IT Asset ManagementFrom the inception of ESI in 1998, the ability to manage technologyassets across the entire DoD has been a key objective.Just as investors must know and manage financial assets to besuccessful, the DoD must have an accurate inventory of its IT assetsto make better, faster and smarter strategic sourcing decisions— and to make available ESAs that support the warfighterand ultimately help to “optimize the enterprise.”The ITAM program managed by ESI will use a net-centric serviceoriented architecture solution that allows DoD asset data tobe pulled into a single repository that will include software andhardware (desktops, laptops, servers and routers).Industry analysts predict that organizations that systematicallymanage the life cycle of their IT assets will reduce the costper asset by as much as 30 percent in the first year and between56 CHIPS www.chips.navy.mil Dedicated to Sharing Information - Technology - Experience