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Local $1B Air Force project at risk; employees cut

Problems with computer project force company to layoff 114 employees.

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By John Nolan, Staff Writer Updated 1:05 AM Sunday, January 15, 2012

BEAVERCREEK — The problems of a stalled, Air Force computer modernization project on which the government has already spent nearly $1 billion puts it at risk as Washington cuts the defense budget, industry officials said.

Computer Sciences Corp., prime contractor on the multi-year project to replace Air Force computers with a new system to improve acquisition and logistics management across the service, has acknowledged removing hundreds of employees and contractors from what is known as the Expeditionary Combat Support System project. On Jan. 6, Computer Sciences told the state it will lay off 114 local employees as of March 6, many with an array of information technology skills needed for the Air Force work.

Computer Sciences and the Air Force declined to answer questions last week about the project or its outlook.

Air Force halts  work in September

The company’s Beavercreek office had ramped up employment of IT specialists and subcontractors in recent years for the project. At its peak, it supported about 500 jobs locally and as many as 1,100 across the country.

The Air Force in September halted work on the project’s final phase, saying that Computer Sciences’ problems in administering it had caused delays. The Air Force hasn’t announced when or how that phase will be resumed, even while Computer Sciences continued to work on an earlier phase.

Air Force officials have acknowledged that the project, on which at least $986.5 million has been spent, won’t be completed in 2016 as had been hoped. Work began in 2007, but the completion date has been repeatedly postponed because of delays, according to the Air Force.

The completion date won’t be determined until the Air Force completes a review and determines how to proceed, the Air Force has said.

That could make the program a target for Pentagon administrators looking for places to cut spending, officials with no connection to the project said.

“In times when budgets are tight, IT modernization projects tend to get delayed,” said Phil Finnegan, a defense industry analyst with Teal Group Corp., of Fairfax, Va.

“Any program, if it doesn’t perform well, is much more vulnerable than it was in an era of defense budget growth,” said Scott Coale, a retired officer from Wright-Patterson Air Force Base who is president of DaytonDefense, the regional association of defense contracting companies. Coale said the company that employs him in Beavercreek, Modern Technology Solutions Inc., is not involved with the project.

Heather Williams, a spokeswoman for Computer Sciences, declined on Friday to answer questions about the project.

The company, based in Falls Church, Va., provides technology services to governments and companies around the world. It reported total revenue of $16.2 billion for the fiscal year ended Sept. 30, 2011.

Jennifer Cassidy, an Air Force spokeswoman at the Pentagon, said she had no new information on the Expeditionary Combat Support System project’s status.

In September, the Air Force ordered Computer Sciences to stop work on the project’s final phase. The Air Force froze the money budgeted for that phase.

After the Air Force’s decision, Computer Sciences said it was taking 165 people off the work affected by the order. On Jan. 6, the company announced additional plans to remove more than 200 employees and contractors from the assignment.

Enterprise resource planning projects of this type, to improve the effectiveness of supply-chain operations and their management, have been difficult for the business world to master, not just government, Coale said. If it were successful, it could help the Air Force improve efficiency at a time when it is trying to reduce personnel costs, he said.

Air Force representatives have told DaytonDefense that the price of services provided by business will be increasingly critical as the Pentagon considers where to cut spending to save money for priority weapons projects, Coale said. That could be an advantage for Dayton-area contractors, who operate in a lower-cost region than the East or West coasts that are home to other companies competing for Air Force contracts, he said.

Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.

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