N. Jerry Simonoff Director, Strategic Management Services, VITA CMA Annual Conference

1. The Commonwealth’s IT Transformation Initiative N. Jerry Simonoff Director, Strategic Management Services, VITA CMA Annual Conference April 27, 2006

2. How We Got Here--IT PPEA Timeline Oct 03-Feb 04 Conceptual Proposals received Jun-Aug 04 Four proposals posted for competition Nov 04 Sec. of Technology approves proceeding with: Infrastructure PPEA (Oversight—VITA) Finalists: IBM & Northrop Grumman Enterprise Applications PPEA (Oversight—Secretaries of Administration & Finance) Finalists: CGI-AMS & IBM Jan-Apr 05 Infrastructure Due Diligence May-Jun 05 Infrastructure Detailed Proposals prepared Jun-Oct 05 Infrastructure Detailed Proposals review/negotiations Oct 05 ITIB recommends Interim Agreement with NG Nov 05 Governor approves Interim Agreement with NG

3. Infrastructure Partnership • This is a true partnership—share in risks and rewards • Good deal for the Commonwealth • New, streamlined infrastructure • Improved security • Good deal for employees • New standard for employee treatment • Managed workforce reduction; no mass layoffs • Good deal for citizens • Job creation • Commitment by Northrop Grumman to grow business in Virginia

4. What are the partnership highlights? • $272 million total capital investment • Job creation • Excellent employment packages • Extensive and proactive technology refresh • New, state-of-the-art facilities in Chesterfield and Russell Counties • Innovative and flexible service contract model • A reliable and agile 21st century infrastructure

5. Who is Northrop Grumman? • One of the largest providers of IT services to the US Government • Experienced systems integrator • Largest technology/manufacturing private employer in Virginia • Nearly 32,000 employees in 14 primary locations in Virginia • Three of seven sectors are headquartered in Virginia: IT, Mission Systems, and Newport News

6. What facilities are proposed? • Chesterfield Enterprise Solutions Center • New, Tier III primary data center in Meadowville Technology Park, Chesterfield County • VITA Headquarters & NG Richmond Operations • Secondary Security Operations Center • Southwest Enterprise Solutions Center • Back-up data center in Lebanon, Russell County • Enterprise help desk • Disaster recovery within 5-24 hours • Primary Security Operations Center • Dinwiddie Project Support Center

8. Meadowville Enterprise Solutions Center

9. Southwest Enterprise Solutions Center

10. Southwest Enterprise Solutions Center

11. What are the technical highlights? • Enterprise Help Desk • Single point of contact for infrastructure help and service • Hardware refresh • Three-year cycle • Security • Enterprise-wide security • Networks • Enterprise voice and data network • 100% network device refresh in years 2 & 3 • Break/Fix Repair • Messaging • Enterprise e-mail system • Support Blackberry enterprise server

12. What are the economic development highlights? • $38.3 million in total estimated economic benefits to VA • Southwest • Russell Regional Business Technology Park anchor tenant • $22.8 million capital investment; creation of 433 jobs • About 90% of labor pool drawn from southwest • Support of technology education at UVa Wise (internships, student recruitment, satellite office for the Russell facility) • Chesterfield • Meadowville Technology Park anchor tenant • $240 million capital investment; 631 VITA and NG employees • Dinwiddie County • Project support center housing 34 employees

13. What does the partnership mean for IT businesses? • Short-term: existing infrastructure contracts continue • Some contract rights will be assigned to NG • Statewide contracts retained by VITA and “shared” with NG • Long-term: Northrop Grumman to assume infrastructure procurement responsibility for the partnership • May continue using existing contracts • May leverage its own supply base and contracts • VITA continues to offer statewide contracts • VITA and NG will collaborate to optimize supply base • Strong commitment to SWAM suppliers • 5 SWAM partners in partnership agreement • Establish SWAM liaison to promote SWAM participation • Implement SWAM mentor-protégé program and suppliers

14. How Are VITA Staff Affected? • Partnership provides unparalleled professional opportunities in IT • For VITA operations staff NG offers: • Attractive benefits packages • Advanced training • Opportunities with a world-class IT firm • Employees’ option to accept NG offer or stay with state as “NG-managed employee”

15. What are the price/performance assurances? • NG annual fees capped at FY 05 level • Fees, service levels benchmarked • 177 performance metrics • Continuous improvement required • Built-in marketplace competition • Penalties for not attaining job creation targets

16. When will the partnership be implemented? General Assembly review Transition Planning Transition Planning Completed Interim Agreement signed Transition Phase Transition Activities Completed Service Commencement Transformation Phase Transformation Activities Completed Operational Phase

17. What happens during each phase? • Planning (Nov 05-Jun 06) • Start-up activities, transition planning • Transition (Jul 06-Jun 08) • Infrastructure operations transfer to NG • Completion of employee transition activities • Transformation (Jul 06-Jun 09) • PCs, servers, etc. moved to new technologies • Operational ”Steady State” (Jul 09 on) • Day-to-day operations in transformed environment • Continued incremental improvements

18. What are the key milestones? • Subject to Revision During Interim Phase/Transition Planning

19. For More Information www.vita.virginia.gov N. Jerry Simonoff Director, Strategic Management Services 804.343.9001 Jerry.simonoff@vita.virginia.gov www.northropgrumman.com