MCI Systemhouse Expects to Hit Pay Dirt

December 4, 1997

MCI Systemhouse Expects to Hit Pay Dirt By Andrea Novotny Staff Writer MCI Systemhouse plans to sign contracts this month worth up to $250 million to upgrade or run emergency 911 systems in a handful of counties in five states. The subsidiary of Washington-based MCI Communications Corp. expects to sign five contracts worth $5 million to $50 million apiece with counties in Indiana, Maryland, Michigan, Pennsylvania and Washington. This work f

MCI Systemhouse Expects to Hit Pay Dirt

By Andrea Novotny
Staff Writer

MCI Systemhouse plans to sign contracts this month worth up to $250 million to upgrade or run emergency 911 systems in a handful of counties in five states.

The subsidiary of Washington-based MCI Communications Corp. expects to sign five contracts worth $5 million to $50 million apiece with counties in Indiana, Maryland, Michigan, Pennsylvania and Washington.

This work follows a landmark effort by MCI Systemhouse for Northampton County, Pa., to devise a new public safety communications system that was activated in July.

Under that effort, MCI Systemhouse consolidated the county's seven dispatch centers into one centralized unit that receives and dispatches all emergency and nonemergency calls for the county's 247,000 residents. The county previously had 36 seven-digit emergency phone numbers, including different numbers for police, fire and ambulance services.

MCI Systemhouse, which provides systems integration and outsourcing services, also operates the county's system under the $42.8 million contract that was awarded in 1995 and runs for 10 years. The $1.4 billion unit has headquarters in Atlanta and Ottawa.

Rick Dale, senior vice president and general manager of the International Public Safety Group for MCI Systemhouse, said that North America's first fully privatized emergency 911 system will save the county $2 million over the life of the contract.

More jurisdictions will follow the public safety outsourcing trend as leaders are faced with the need to reduce overall expenditures and obtain "optimal bang for the buck," said Leslie Kao, a public sector market analyst with G2R Inc., a market research firm in Mountain View, Calif.

Such initiatives represent "new directions in the size and scope of outsourcing projects" for state and local governments, Kao said. "For governments, the ability to spread payments over the life of a multiyear contract, rather than making substantial up-front investments is a significant incentive given their resource constraints. Also, governments are able to share or reduce risk through the transfer of responsibility to private companies."

For the Northampton County project, MCI Systemhouse agreed to finance the effort, upgrade or replace the technology and manage the staff for the new operation, which is equipped with radio, telephone and network components.

The company will operate under a performance-based contract in which criteria such as the speed of dispatch and ring standards will be measured against standards set by the Association of Public Safety Communications Officials International and other organizations, Dale said.

MCI Systemhouse employed most of the employees that worked for the county government's communications centers. The new center's 41 employees were required to pass a training program to become Emergency Medical Dispatch Certified, which allows them to give medical instructions to callers to help the victim. There were about 65 employees before the system was activated, Dale said.

"MCI Systemhouse's International Public Safety Group offers the citizens of our county the best solution for our specific needs," said A. Landis "Bill" Brackbill, Northampton County executive. "The system ... not only provide[s] the families of Northampton with the public services they deserve, it ... also offer[s] the county the infrastructure we need to attract more people and jobs to our community."

MCI Systemhouse's competitors in the nation's $2.85 billion public safety systems integration market include Motorola Inc., Schaumburg, Ill.; TRW Inc., Cleveland; and IBM Corp., Armonk, N.Y. All of the companies bid on the effort to build and run the emergency 911 system for Northampton County.

"TRW is not working on any [public safety] outsourcing projects now, but is interested" in pursuing such work at the state and local level, said Gary Neal, a senior acquisition manager for TRW's systems integration group.