■ COVER STORY
A
fter a long-term, high-tech relationship, Virginia’s state government and Falls Church-based Northrop Grumman Corp. are
moving toward divorce. Like many separating cou-
ples, the two sides are trying to keep things amicable while they resolve thorny issues with the help of a mediator. Despite the impending
split, Virginia officials say the relationship did not fail. They say it succeeded in meeting goals set more than a decade ago. The problem is the IT industry has vastly changed since the commonwealth and the company signed a contract in 2005. “The Northrop Grum-
m an contract was signed almost a year and a half before the first iPhone was released,” says Nelson Moe, the head of Virginia Information Technologies Agency (VITA) and the commonwealth’s chief information officer. “[The contract] did what it was sup- posed to do. Northrop Grum- man stepped up and helped us consolidate our assets and modernize our IT infra- structure, but there are better service frameworks now.” The resulting changes will
affect not only state agencies and Northrop Grumman but also technology hubs in Cen- tral and Southwest Virginia.
File graphic
Revolutionary deal Northrop Grumman
currently provides IT for most state agencies under an almost $3 billion contract that ends in mid-2019. When the original con-
tract was signed, it was seen as a revolutionary way for a state government to provide IT ser- vices. Only two other states, Georgia and Texas, currently outsource their IT services. Virginia now plans to
switch to a multi-vendor model, a move designed to give VITA — the agency charged with management of the state’s IT — the ability to respond to rapid changes in the industry with shorter contracts involv- ing several companies. But as Virginia begins
the delicate and complex task of moving to a new model, which is scheduled to take place over the next 2½ years, the difficulties posed by the transition have quickly become apparent. First, Northrop Grum-
man argues that VITA’s new approach will make the state’s IT infrastructure less secure, threaten Virginia jobs and increase costs to the state.
www.VirginiaBusiness.com VIRGINIA BUSINESS 21
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