21 August 1998
Thanks to Richard Lardner
Defense Information and Electronics Report, Aug. 21, p. 1 Soft Landing effort praised, criticized NSA, INDUSTRY PARTNERSHIP GIVES AGENCY ROOM TO MOVE UNDER PERSONNEL CEILINGS A novel partnership between the National Security Agency and industry has helped NSA meet mandated reductions in personnel levels while at the same time allowing the agency to refresh its workforce with technically skilled people. Dubbed "Soft Landing," the program encourages more senior, and often highly paid, support staff to take jobs in the private sector, thereby creating openings the agency can fill with the young computer scientists, mathematicians and engineers it needs to fulfill its code-making and code-breaking duties. Additionally, NSA has saved roughly $25 million through the effort, which was implemented two years ago but has received no publicity. While the Soft Landing program has received high-praise from government officials as well as industry representatives, some public interest advocates have questioned the effort, saying it has perhaps created an improper relationship between the secretive NSA and a select group of contractors. "Most of us in the real world don't have a retirement plan like this," says Steve Aftergood, a senior research analyst with the Federation of American Scientists. Soft Landing is outsourcing with a twist, according to NSA. Companies not only get the agency's work, but its people, too. Soft Landing contracts are awarded on a competitive basis to participating companies, which currently are Allied Signal, Compro, Data Procurement Corporation, Kathpal Technologies, Lockheed Martin, SAIC, TRW and QuesTech. Soft Landing contracts must be for new work and the projects fall generally within the support realm, like declassification, education and training, Year 2000 repairs, software installation, and human resources. The agency has awarded 10 Soft Landing contracts and two more are in the procurement stage. A special provision in the Soft Landing contract requires the firm winning the award "to hire current NSA employees who will resign or retire from the agency to take the job," according to written answers the agency provided in response to questions from Defense Information and Electronics Report. The separation is completely voluntary, says NSA, and the contracts "are funded principally through the payroll funds saved from the employees departure into the Soft Landing program." Under the terms of the program, a "Soft Lander" is guaranteed work for 12 months with the new employer. At the end of that period, the company may hire that person full-time, but there are no guarantees after the year is up. Alternatively, the employee may choose to work for another firm, or decide to retire. Salaries and benefits for the year are negotiated between the contractor and the employee. "[Soft Landing] gave a person a way to sort of say, 'OK, I'm going to go ahead and take an early retirement. I'm not sure what exactly I want to do with the rest of my life but here's at least a year for me figure out what it's like outside the agency,'" says Thomas McDermott, former deputy director of information systems security at NSA. As defense budgets have dropped, NSA and other agencies have been forced to impose personnel caps, giving them less head room to hire new blood. At the same time, the information technology world has exploded and competition for computer science and engineering talent has increased dramatically. Unable to compete with private sector salaries, NSA is at a disadvantage when it comes to hiring and retaining the "skills sets" it requires to perform its highly complex duties (DI&ER, March 20, p18). Michael Jacobs, NSA's information security chief, lamented in a June interview with DI&ER that the agency is "suffering from characteristics that are absolutely 180 [degrees] out from the characteristics of this growth industry." That is, while information technology companies are able to hire as many high-tech people as they need, NSA does not have that flexibility. Soft Landing permits NSA to stay under budget directed personnel caps, while also allowing the agency to reconfigure its skill mix: NSA wants more technically sophisticated personnel and less support staff. "This was part of a plan to be able to keep a stream of recently technically trained people . . . coming into the agency. If you didn't lose those 150 people at the top end, well, you couldn't hire the 150 at the entry level," says McDermott, now senior vice president for information assurance at CACI, a high-tech company in Virginia. As of Aug. 10, 268 agency personnel had opted to take the Soft Landing route. The program started slowly; just 19 people enrolled in fiscal year 1996. Last year, 109 took advantage of Soft Landing, and thus far in FY-98 140 NSA employees have done so. Survey data compiled by NSA indicates that the average Soft Lander leaves the agency two and a half years earlier than they would have otherwise. "After subtracting the costs of the contracts, figures indicate the agency has saved approximately $25 million in payroll which would have been paid to the 268 participants had they remained in the agency's employ," NSA adds. But while the program isn't widely known outside the intelligence community, Soft Landing has its critics. C. Wayne Madsen, a senior fellow at the Washington, DC-based Electronic Privacy Information Center, views Soft Landing as an effort by the agency to populate the private sector with people willing to toe NSA's line. At a time when complex policy issues like encryption and critical infrastructure protection have created tensions between government and industry, that may be a bad idea. Madsen, who has written extensively about the U.S. intelligence community, calls Soft Landing a "legalized revolving door." He worries NSA will move beyond its traditional contractor base and expand the program to other corporate sectors, like banking and finance. "It's a slippery slope to take NSA people and then be guaranteed a certain amount of work," says Madsen. "In many cases, their loyalties are with the agency. People should be very worried about this." NSA tells Defense Information and Electronics Report, however, that Soft Landing is consistent with Federal Acquisition Regulations. While no special permission was required to implement the program, the Defense Department, NSA's parent organization, was notified. NSA is also expanding the Soft Landing concept. On Wednesday (Aug. 19), Computer Sciences Corp. announced it had received a $20 million outsourcing contract to provide the agency with hardware and software support. The contract, made under NSA's "Breakthrough" program, currently a pilot effort, involves "the voluntary transition of federal employees to the private sector," CSC said in a release (see related story). Joe Greaney, a vice president at SAIC and head of the company's engineering division, heaps high praise on the Soft Landing program. SAIC has been involved with Soft Landing since July 1997 and has 32 Soft Landers working on three separate contracts. One, Jethro Lee, worked at NSA for 37 years. Lee left the agency last year and now is SAIC's Soft Landing manager. Greaney says SAIC has thus far permanently hired three Soft Landers; three more found jobs with other companies, and one has since retired. According to Greaney, Soft Landing contracts have not produced huge revenues for SAIC; competition for the awards is very intense, which tends to lower the contract price. But Greaney says his company is looking at a bigger picture. "It was to expand and broaden our workforce," he says of SAIC's decision to get involved in the program. "This allows us to hire some very specialized . . . individuals who have a lot of legacy knowledge. . . . We really went into it with more of a long-term view of 'We could get some of these talented individuals blended into our workforce and they could help us broaden our workbase.'" Soft Landing candidates are generally paid the salary they were making when they left the agency and also receive their government pension. In order to attract Soft Landers, SAIC has crafted a "pretty lucrative" benefits package, Greaney says. In fact, the Soft Landing benefits package, which includes as much as 30 days of annual leave, 10 paid holidays as well as a paid-in-full medical insurance premium, is better than that offered to some regular SAIC employees. "They are getting a good deal," Greaney said of the Soft Landers. "But it's a one-year deal. They have no guarantee of employment after that year." Don Harlacher, Soft Landing program manager for Kathpal, said an additional benefit to Soft Landing is that it gives smaller companies like Kathpal access to NSA work that might otherwise be difficult to win. Kathpal, a minority-owned business based in Dunn Loring, VA, is teamed with TRW and Compro on Soft Landing projects; Soft Landers can be integrated into any of those three companies. "It put us in a new business area where we had no contracts," says Harlacher. Opinions on Soft Landing may vary, but no one denies that it is unique. "Usually we find the work first and then we need to find people," says Greaney. "In this case we have the people, so to some extent the work finds them." -- Richard Lardner [Sidebar] SOFT LANDING PROGRAM IS NOT FOR EVERYONE AT NSA The National Security Agency's Soft Landing program may be innovative, but it's not for everybody. Literally. According to information on Soft Landing provided by NSA, the program is open to all personnel eligible to retire -- either on a regular schedule or through an early-out package -- except for the agency's brain trust. "Senior executives, senior-level experts, and senior level professionals" can't participate in Soft Landing, NSA says. For agency personnel not eligible to retire, anyone may participate, except NSA's computer scientists, mathematicians, engineers and linguists. According to sources familiar with the program, these are the critical skill sets NSA wants to recruit and retain. -- Richard Lardner [Sidebar] CSC JOINS TEAM OF CONTRACTORS ASSUMING NSA'S WORK, AND WORKERS Computer Sciences Corp. has joined the ranks of a small group of companies that are not only assuming portions of the National Security Agency's support work, but former agency employees as well. The El Segundo, CA-based firm announced this week that it received the "first federal government outsourcing contract involving the voluntary transition of federal employees to the private sector." Corporate participants in NSA's Soft Landing effort, which was implemented in 1996 as a way of encouraging more senior agency support staff to retire and take jobs in the private sector, may have been surprised by the wording in CSC's announcement. Over the past two years, NSA has awarded 10 Soft Landing contracts and 268 agency personnel have voluntary transitioned to the private sector through the program (see related story). According to CSC's Aug. 19 release, the outsourcing contract was made through NSA's "Breakthrough Program." An NSA spokeswoman told Defense Information and Electronics Report that Breakthrough is the "next iteration" of the agency's overall outsourcing plan. The contract to CSC is for existing work, whereas Soft Landing contracts are only for new projects identified by the agency. The CSC contract is also considered a pilot, and the decision to allot additional Breakthrough outsourcing deals will be based on the success of the CSC award. Under the terms of the contract, CSC "will offer hiring incentives and other employment benefits, including full federal salaries, to current [NSA] employees who choose to leave government service for employment with CSC or one of its subcontractors." CSC is teamed with Data Procurement Corp., a Soft Landing participant, on the contract. John Gulick, a CSC spokesman, told Defense Information and Electronics Report that he is not familiar with the Soft Landing program. However, Gulick said CSC's deal with NSA does not involve a year-long period during which former agency staff are guaranteed work with their new employer. That 12-month period is a key feature of the Soft Landing program. That difference, said Gulick, makes the CSC contract "true outsourcing." CSC will maintain daily computer systems operations for NSA as well as provide software and hardware support. "It is clear this Breakthrough contract demonstrates that the Defense Department continues to take a leadership position in innovative approaches to achieving added savings and benefits for the taxpayer," said Stephen Tate, chairman of NSA's strategic direction team. Tate is quoted in CSC's news release. Milton Cooper, president of CSC's federal sector, called the deal a "landmark contract." "It clearly provides an opportunity for federal employees to ease into the private sector and successfully complete their government service on a positive note," Cooper added. "I'm sure the terms of this contract will be closely watched by other government officials as they seek to reduce headcount through outsourcing and privatization efforts." -- Richard Lardner
Inside the Pentagon, Aug. 20, p. 1 ACCOUNTING 101 As observers of the spy community know, National Security Agency employees spend their days basically being busybodies, reading the electronic communications of other countries and then passing the purloined information onto the White House and the Defense Department. Although intensely secretive, NSA is very good at what it does, or so we're told. But according to a new report by the Pentagon's inspector general, the Ft. Meade, MD-based agency needs some basic accounting skills to go along with all that code-breaking expertise. Although the IG's July 22 audit is classified (go figure!), an unclassified summary posted on the Internet says NSA's fiscal year 1997 financial statements "were materially incomplete and inaccurate." Specifically, the documents omitted real property located at a field site, a portion of accounts payable, and a portion of operating expenses. Also, the agency did not fully implement recommendations made in an August 1996 audit "that NSA had reported as corrected," the IG says. "As a result, the FY-97 financial statements prepared by NSA were not reliable and did not accurately or completely present the financial condition of NSA," the summary reads. "Unless NSA corrects the material weaknesses, the financial statements will not fairly present the NSA financial position and results of operations." This isn't the first time the IG has found flaws in NSA's bookkeeping. A classified 1991 audit found an agency so fraught with management problems the IG raised the possibility NSA may not be able to accomplish its mission. Details of that seven-year old audit were outlined in a February 1996 follow-up report prepared by the IG. According to that document, NSA did not meet the military's equipment accountability standards, a shortcoming that meant the agency could not account for millions of dollars worth of assets. NSA claimed in July 1997 that all the problem areas identified by the IG's 1991 audit had been repaired. Hmmm. Maybe not.