War Gadgets a Big Business

With billions of dollars in laptop computers, portable satellite dishes and wireless telephones moving around Iraq and Afghanistan in military hands, Uncle Sam could open an Office Depot to support the burdened reconstruction of those two countries.

War may be hell for the troops, but for high-tech hardware and software peddlers, it's swell. A recent study found the military services awarded $65.4 billion in technology contracts in 2003. Many are for several years, and some officials quibble with details in the study, produced by McLean, Va., firm INPUT. But everyone agrees the operations in Afghanistan and Iraq have created a surge in the military's demand for technological gadgetry needed to fight a 21st century war.

The Army is the biggest driver of high-tech military spending. According to INPUT, the service awarded almost $40 billion in contracts last year, about half the Defense Department total.

Now there's a shopping-spree atmosphere in the field. With supply lines a favorite target of Iraqi combatants, troops are literally lining up to equip their vehicles with satellite navigation aides, to avoid taking wrongs turn and ending up in the enemy's sights, says Kevin Carroll, head of the Army's Enterprise Information Systems, which manages combat and business-related procurements.

Logisticians also crave tracking technology to keep tabs on goods and arms, Carroll says. Some are tagging shipments with tiny radio frequency identification beacons, which can run $80 to $90 apiece, Carroll says.

How is the government procurement system, not known for swiftness, handling this volume of spending? Every which way it can.

In the late 1990s, Carroll was a chief architect of contracts that used procurement regulation changes to make the military one of the savviest-and most hard-nosed-buyers of IT. Today, those contracts, which include governmentwide deals that any agency can latch onto to make purchases, are paying dividends.

The Army runs several contracts, including some blanket purchase agreements made through the General Services Administration's schedules, which offer a vendor's lowest prices. Those contracts are known for their quick turnaround time, but even deals the Army has struck on its own have enabled the service to complete orders in less than 20 days, says Stanley Tylecki, the project officer for the Army's Rapid Response program. Tylecki's is one such contract operation that has done gangbuster business since opening shop in 1998.

Rapid Response is now in its second generation. The first contract purchased $1.67 billion in technology for the Army over five years, processing about 655 orders, Tylecki says. The new contract, awarded in January 2003, already has moved 327 orders and has obligated funds totaling $710 million.

The modern, tech-equipped war also has brought new players onto the battlefield. Troops aren't trained to reformat hard drives, keep up data servers and clean sand out of delicate computer parts. So, in addition to the hardware and software, the military is paying to bring in the civilian support staff to take care of it.

Carroll's office alone has 160 people who are now deployed in Afghanistan and Iraq. About 80 percent are contractors, he says, not government employees. "Other than their long hair or the ponytails, you can't tell them from the soldiers," he says.

Carroll, highly regarded as one of the government's more thoughtful acquisition practitioners, says the dependence on private-sector workers in battle won't diminish.