A Possible Contracted Spending Scenario for the Rest of FY 2014

Can you believe that we are half way through fiscal year 2014? Let’s take a look at the data to see what can we tell so far about how much federal departments have spent on contracts at the mid-point in the year and see what might be in store for us in the second half of FY 2014.

When I looked at the mid-fiscal-year spending rates last year, I proposed what I felt was reasonable approach to projecting potential contract obligation rates for the remaining two fiscal quarters. This year I again set a baseline that in FY 2014 agencies will obligate at least 90% of what they did in FY 2013 to drive my general projections for what they might spend on contracts in the second half of the fiscal year. See my previous blog for a more detailed explanation of my approach.

Contract Obligations Compared

The twenty top-spending departments account for $122.4B in combined Q1 and Q2 obligations for FY 2014. If they spend 90% of what they did in FY 2013 they will have $285.5B left to obligate in the remaining two quarters of this fiscal year. (See table below.) Under that assumption, the remaining federal departments and agencies would account for roughly $4.5B for Q3 and Q4, reaching the overall $290B mark for the second half of the year.


  • Only a few departments have a FY 2014 Q1 and Q2 obligation rate lower than they did in FY 2013, suggesting that their obligation rates may be higher than last year at this time, depending on total final obligations.

  • At this point in FY 2013, each defense branch had reported at least $3 billion more in obligations than they have reported for FY 2014, even under sequestration.
    • Navy has reported $15.2B for FY 2014, compared to $25.3B at this point in FY 2013
    • Army has reported $12.4B for FY 2014 18B, down from $17.8B for FY 2013
    • Defense Agencies have reported $16.6B for FY 2014, compared to $19.1B for FY 2013
    • Air Force has reported $14.1B, compared to $17.3B for FY 2013.

  • Seven of the twenty departments above saw drops of 5% or more from FY 2012 to FY 2013, five of which are civilian agencies, i.e. Energy, NASA, DHS, Justice, and Education. But without exception each of these departments has reported increases in the first two quarters of FY 2014 compared to FY 2013. Energy, NASA, and Education each show increases of 15 percentage points or greater.

  • Energy’s yearly cyclicality continues. During Q1 and Q2 the DoE tends to obligate roughly 45% and 75% alternately from year to year. Looking back at FY 2011 reveals that they spent $11.1B in the first two quarters, which accounted for 45% of their $25.1B total FY 2011 obligations.

  • NASA also reveals cyclicality in its contracting. In FY 2011 NASA reported $6.4B in combined Q1 and Q2 obligations accounting for 41% of their $15.4B total obligations for that year. Looking at the chart above we can see an oscillation in NASA’s obligations since then with $7.8B reported so far in FY 2014. Depending on whether my 90% assumption is pessimistic regarding their final spending will determine whether they have between 40-50% of their budget yet to obligate this fiscal year.


Some of the year-to-year changes shown above may be due to the appropriations levels and funding priorities that these departments received under the FY 2014 Omnibus funding bill passed earlier this year. However, what these changes more likely indicate is the impact of agencies having actual budgets earlier in the fiscal year, compared to having full-year continuing resolutions that freeze priorities and limit flexibility.

How useful or accurate this kind of macro-level estimation is depends in large part on its main assumptions. Last year this approach pointed to roughly $300 billion in potential combined FY 2013 Q3 and Q4 obligations. The final data shows that actual obligations came in at $265 billion, so my 90% assumption was optimistic in the age of uncertainty, sequestration, and year-long continuing resolutions. Actual combined Q1-Q2 obligations among the top twenty departments declined from $237.1 billion in FY 2012 to $194.0 billion in FY 2013, an 18% drop.

So far in FY 2014, these same departments have reported combined Q1 and Q2 obligations of $122.5 billion, BUT the four largest spenders – the defense branches – have not fully reported their Q2 data. Looking at the civilian departments only give us $65.7 billion, $57.6 billion, and $64.2 billion for FYs 2012, 2013, and 2014 respectively, so FY 2014 is running only 2% below FY 2012 levels and is nearly 12% ahead of FY 2013.  We’ll just have to wait and see what comes from DoD.

Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @GovWinSlye.

Deltek Pulse: Justice/public safety and homeland security month in review, March 2014

The most common terms appearing in justice/public safety and homeland security solicitations during March were camera/surveillance, fire alarm and radio. The below maps provide information on where solicitations were released during the month. 

  • Number of public safety bids: 1073
  • Top three states (by number of solicitations released): California (148), Pennsylvania (58) and Ohio (58)
  • Keywords: camera/surveillance, fire alarm and radio

Frequency of terms

  • Surveillance: 31 (9 state; 22 local)
  • Radio: 14 (three state; 11 local)
  • 911: 8 (three state; five local)


  • Quite a few states either issued or had open solicitations for corrections technology in March. Texas chose to combine its previously separate radio frequency electronic monitoring and GPS electronic monitoring projects into a single solicitation. Florida, Arizona and Nashville, Tenn., have solicitations out for inmate phone systems, and several others have open projects for other corrections technologies.
  • Radio system projects renewed their prominence with several states and counties moving forward with solicitations.
  • Computer-aided dispatch (CAD) and related public safety software systems also saw resurgence with several RFIs and RFPs released, including an RFI released by the Arizona Department of Public Safety for a law enforcement CAD system.

Notable projects

  • Clark Regional Emergency Services Agency (CRESA) released a request for proposals for public safety communication equipment.
  • The California Governor’s Office of Emergency Services (Cal OES) released a request for information for text-to-911 foreign language translation services, which will be utilized at public safety answering points (PSAPs) throughout the state.
  • The Western States Contracting Alliance (WSCA) released a solicitation for public safety communication equipment, which at least 10 states intend to participate in.

 Analyst’s Take

March had 44 fewer solicitations released compared to February, and many of the key solicitations released were for larger entities and larger projects, which have longer-than-average timeframes for completion. It is also expected that these projects will take longer to award as they may require more extensive review of technical responses.

One of the most expensive and technical systems required in public safety is the public safety radio system, which proved to be extremely popular in March, along with other traditional JPS technologies such as CAD and records management systems. Besides the large WSCA contract, which is expected to be used in at least 10 states and can be used by localities within those states, several other entities released radio RFPs as well. The radio systems, however, varied in type and location. Several projects, such as one in San Francisco, focus only on individual entities, while others are more regionally focused to cover a broader area, like in Sarasota. Still, the requirements are generally similar regardless of where the system is being implemented.

The majority of entities looking to replace or upgrade their system are choosing an APCO P25-compliant replacement in the 700 or 800 MHz band. These systems are also consistently narrowband, as required by the FCC. What remains to be seen, however, is whether the entities currently working on solicitations will choose to include long-term evolution and other broadband options in the future.

GovWin IQ subscribers can read further about these projects in the provided links. Non-subscribers can gain access with a GovWin IQ free trial.


IT services contracts remains a big player in Texas

The Texas Department of Information Resources (DIR) has more than 800 active information technology cooperative contracts included in Deltek’s GovWin IQ state and local term contracts database. Deltek dove into these contracts to see which IT commodities the state is focusing on, and we found that more than 500 contracts include a requirement for IT professional services.

Technology services are by far the leading offering within Texas’ DIR contracts. Displayed in the graph above, more than 50 percent of the cooperative contracts include IT services, even if the contract is primarily offering a commodity. This indicates the importance of IT services as an offering in the state of Texas right now. The next category offering is software, far behind IT services, with only 14 percent. Following that is hardware offerings with 12 percent. The remaining 20 percent of the contracts include training, telecommunications, and networking commodities.

Examples of IT services contracts include IT staff augmentation, with more than 220 (of the near 500) of DIR’s active IT services contracts. Outsourcing IT staff services helps the state cut costs with a temporary solution of fulfilling needs without all the administrative costs of hiring new staff.

More than 130 active Texas IT services contracts are deliverables-based information technology services (DBITS) contracts. These contracts are established based on specific service offerings ranging from application development, enterprise resource planning (ERP), IT assessments and planning, to technology upgrades and transformations. This is another example of how Texas is utilizing IT services vendors as a way to cut costs for specialized projects.

While the software, hardware and other commodity categories remain significant, it’s evident that offering IT services is in high demand in Texas right now. If a vendor is trying to do business with the state, they should consider that more than 50 percent of DIR’s contracts include IT services with their commodity contracts; therefore, offering supporting services of your commodity would only benefit you in winning a contract.

If you want to sell to state and local governments and understand statewide term contracts better, take a look at the GovWin IQ term contract resource. Deltek’s term contract database has full contract records of DIR’s contracts, as well as IT term contracts from the other 49 states. This will help answer questions about where your competitors hold contracts and what their pricing is, how states qualify vendors, and which governments can use these contracts. With more than 12,000 state IT contracts, Deltek’s term contracts resource is also a great place to find similar upcoming opportunities as the IT staff augmentation contract. To learn more about upcoming key term contract opportunities and the recommendations Deltek suggests to vendors looking to qualify for these contracts, visit Deltek’s Term Contracts Top Opportunities for FY 2014 report, here.

Not a Deltek subscriber? Click here to learn more about Deltek’s GovWin IQ database and take advantage of a free trial.



Deltek Pulse: Justice/public safety and homeland security month in review, February 2014

The most common terms appearing in justice/public safety and homeland security solicitations during February were camera/surveillance, radio and fire alarm. The below maps provide information on where solicitations were released during the month. 

  • Number of public safety bids: 1,117
  • Top three states (by number of solicitations released): California (122), Pennsylvania (93) and Virginia (68)
  • Keywords: camera/surveillance, radio and fire alarm

Frequency of terms

  • Surveillance: 40 (13 state; 27 local)
  • Radio: 20 (eight state; 12 local)
  • 911: 4 (zero state; four local)

The below graph provides information on the break-down of the types of entities purchasing justice and public safety technologies.



  • Very few projects were awarded in February; however, numerous solicitations were released.
  • Several localities decided not to release solicitations for projects, particularly radio system projects, in favor of utilizing existing contracts. Franklin County, Ohio, decided to upgrade using its current Motorola radio system, and the Metropolitan Washington Airport Authority executed a rider on Prince George’s County’s contract with Motorola. The San Francisco Department of Emergency Management also decided not to release a solicitation for its computer-aided dispatch upgrade project as the upgrade will be sole-sourced to Tiburon.
  • A significant number of solicitations were released for consulting or planning opportunities, particularly for larger, statewide opportunities.

Notable projects

Analyst’s Take

February was a busy month at the state level, with many solicitations released – 60 more than the 1,057 released in January. Many of the solicitations were for large-scale, multi-step projects finally coming to fruition. Included in this is Massachusetts’ re-release of its next generation 911 products and services solicitation. This project was originally released in October 2013, but was canceled in December due to concerns by vendors over their ability to meet the expectations established in the RFR. The scope of work has been revised to address these concerns.

Another large procurement is the state of New Hampshire’s statewide radio system functionality and interoperability study and report. The state currently uses a VHF P25 compliant system and is looking to upgrade it. The winning consultant will be charged with completing a report on the state of the current radio system as well as providing recommendations on how to update the system. It is expected that the timeframe for both of these projects will be longer than average due to their complex nature. These and the other large projects released and updated in February have been in the works for months or, in many cases, years. It is expected that numerous updates and addenda will be released as these projects move through the solicitation process in an effort to avoid having to put the project completely on hold, like the Massachusetts 911 project. Vendors are encouraged to ask questions and attend all of the associated solicitation events, particularly site visits, to gain as much information about these projects as possible prior to submitting proposals. All vendors, even those who are not able to bid on consulting and planning portions, should pay attention to solicitation activity. By tracking consulting portions, vendors can gain an understanding of state processes as well as the scope of the project they may one day bid on.

GovWin IQ subscribers can read further about these projects in the provided links. Non-subscribers can gain access with a GovWin IQ free trial.



2014 NDAA Allows Prime Contractors to Count Lower Tier Small Businesses

The 2014 National Defense Authorization Act (NDAA), signed into law in December, offers advantages to small business contractors as well as prime contractors, by allowing primes to count all dollars funneled to small businesses.  To date, primes could only tally first tier small business subcontractors for their small business subcontracting goals.


The Making Every Small Business Count Act of 2013, first introduced by Rep. Sam Graves (R-MO) in June, became an amendment to the NDAA.   Unlike prime contractors, federal agencies are currently able to count all spending with small businesses toward their small business utilization goals regardless of the tier the company holds on a contract.   The new rule is meant to incentivize prime contractors to further expand their use of small business contractors.   Once the new rule takes effect, primes will be allowed to count 2nd tier subcontractors (subcontractors’ subs) toward their small business subcontracting goals.  “The change will encourage prime contractors to fully consider the merits of small business bids,” stated Graves in June when he first introduced the legislation.


Provisions of the amendment include the following:

  • The amendment increases availability of lower tier subcontracts to small businesses by counting every subcontracted dollar toward the negotiated small business contracting goal.  
  • Agencies negotiate small business subcontracting goals with prime contractors, and prime contractors pass down the requirements to use small businesses to their own large subcontractors.  The dollars reported are then applied to the government’s goal for subcontracted dollars to small businesses.   
  • By basing the goal on all tiers, the amendment allows for higher small business utilization goals in contracts.

Surprisingly, the American Small Business Coalition (ASBC) does not stand behind this legislation.  On the surface, the legislation appears to provide added advantages to small businesses in the federal contracting arena.  However, Guy Timberlake ASBC CEO, asserts in his blog post, “Don't we have enough challenges with entities that are not legit small businesses being awarded work directly (or indirectly) by federal agencies? Now we create an unmonitored means for organizations to boost their numbers.”   Timberlake’s belief is that large business affiliates and subsidiaries stand to gain the greatest benefit from this change, rather than true independently-owned small businesses. 

It will be some time before the true impact of this legislation will be felt.  The rules and regulations will be developed and then enacted within 12-18 months.  The new criteria will only apply to contracts entered into in the following fiscal year after the rules are enacted. 

Although primes will not be able to count 2nd tier subcontractors toward small business goals in the near future, the new criteria should be on their radar as well as that of small business contractors.  Small companies wishing to enter the federal contracting space may be afforded easier access in years to come.  


Deltek pulse: Health care/social services January review

The first month of the 2014 saw an influx of health care and social service solicitation, approximately 150 more than in December 2013. In January, the health and human services team saw the release of nearly 750 solicitations with either health care or social services as a primary vertical. The word cloud below represents the frequency of terms in those solicitations.

As one can see from the below map, California, Texas, and Virginia saw the largest number of health and human services related solicitations, while the state of Wyoming had no related activity. Alaska released three solicitations and Hawaii released twelve.

Notable Opportunities

  • The District of Columbia Department of Health Care Finance released a request for information (RFI) for a Medicaid management information system (MMIS) case management solution on January 8, 2014. The existing MMIS case management Solution, CaseNET, is independent of the MMIS, but shares the MMIS' interfaces for data related to provider, recipients, and claims.
  • Vermont canceled its integrated eligibility solution (VIEWS) design, development, and implementation request for proposals (RFP). The Agency of Human Services will revise and reissue the RFP, with an anticipated release date of March. According to Vermont's IT Strategic Plan for 2013-2018, the state estimates VIEWS to cost $115 million over 5 years.
  • The Tennessee Department of Labor and Workforce Development released an RFP on January 9, 2013 for an Unemployment Insurance (UI) benefits system. The state previously released an RFP for a UI system on behalf of the Southeast Consortium.
  • The Hawaii Department of Health released an RFP on January 2, 2014, for the transfer and implementation of its Women, Infants, and Children (WIC) management information system (MIS). Proposals are due on March 14, 2014 at 4 PM.
  • The Standing Rock Sioux Tribe, on behalf Mountain Plains Indian Tribal Organizations NATIONS, released an RFP on January 10, 2014 for project management during the implementation phase of a new WIC MIS. The selected vendor will also serve as the project manager for the planning and implementation of WIC electronic benefit transfer (EBT) services.
  • The Washington Health Care Authority released a Request for Quotes and Qualifications (RFQQ) for Medicaid Information Technology Architecture (MITA) Framework 3.0 and State Self-assessment advisory/consultative services on January 24, 2014. Proposals are due on February 24, 2014.
  • The Connecticut Health Insurance Exchange (Access Health CT) released an RFP for a Connecticut All Payer Claims Database (APCD): Data Management Contractor on January 27, 2014.
  • The Nebraska Division of Behavioral Health released an RFP for the Division of Behavioral Health Centralized Data System. Proposals are due by 2 PM on March 21, 2014.
  • The Arkansas Department of Health released an RFP for a WIC EBT project implementation contractor on January 10, 2014.
  • The Connecticut Department of Administrative Services released an RFP for a Connecticut WIC case management system on January 27, 2014. The state is looking for the procurement, transfer, and implementation of Michigan's MI-WIC case management system.

Analyst Take

January saw a slew of opportunities released in the health care and social services space, most likely due to the end of the holiday season and beginning of a new fiscal year. States are also continuing to address any continued service delays and system errors with their health insurance exchanges (HIX). Vendors needing an updated report regarding the HIX market can find a new Deltek Industry Analysis piece here. Vendors should also be on the lookout for an upcoming Deltek report on the ever evolving MMIS market, expected later this spring.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.



Deltek pulse: general government January review

A new year always brings a flurry of excitement. A new date on the calendar, New Year’s resolutions, and a fresh perspective on the year ahead; the first month of the New Year brought a flurry of procurement. Although the fiscal year has been underway for several months, January kick started projects that had been put on hold over the holiday months.

Over 2,800 bids were released in the General Government vertical in January 2014. Once broken down within the vertical, most of the bids were related to education. Following behind education were natural resources and economic development. A majority of the bids released were relating to management system software. Document management systems, student information systems, and records management systems were some of the most common.

The state of New York Office of General Services released a solicitation for Information Technology Governance Transformation Support Systems. This solicitation adds to a bigger project that will touch about 4-6 other opportunities in the state. Proposals are due April 10, 2014.

New Hampshire released a solicitation for an Automated Form Submittal Tool. The solicitation is also part of a bigger project where New Hampshire will be releasing a Business Intelligence tool bid in the future. Proposals are due March 4, 2014.

Alaska released the long anticipated Statewide Longitudinal Data System RFP. The state released an RFI for the project in 2012 and has been working towards an RFP ever since. This statewide system will house data and provide analysis from multiple agencies and organizations. Proposals are due February 3, 2014.

Another widely-anticipated solicitation that was released was the Statewide Satellite Phones and Equipment Services RFP in Utah. This RFP is for Western States Contracting Alliance (WSCA) and Utah is the lead state. The solicitation will establish contracts for both equipment and services for any WSCA state interested in participating. Proposals are due by February 13, 2014.

California and Texas released the most bids last month with Virginia and Florida following not far behind. Alabama, Nevada, and Wyoming released the fewest bids last month, each with fewer than 10 active bids. These states may not be the best place to look for business in the upcoming months.

Overall, January was an active month for procurement. After the November and December lull, states are back on track with projects and releasing bids.

  • I neeVendors playing in the software space should take advantage of the flurry of procurement activity as many entities look to wrap up procurements prior to the next fiscal cycle (both proposed and approved FY15 budgets). This is especially true for the education market where funding is scarce and impact is large.
  • While it may be appealing for vendors to dive into large states like California or Texas, sometimes carving out a niche in low-profile entities offers a greater chance for long term revenue. It also keeps competition down and increases win rates. This is especially noteworthy for small businesses that are new to the market.
  • February is poised to be equally active and it will be important for vendors to start formulating proposal teams, identifying back-up funding streams, and taking stock of RFP developments. With the flurry of procurement activity, it is also a good time to start collecting competitive intelligence on the types and number of bidders for major IT projects.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.



California is talking and vendors should be listening

The California Technology Agency recently stripped down its procurement process and took a hard look at what is working and what is not. The California IT Procurement Task Force recently completed an analysis, and the findings were presented this week in a webinar led by the Rosio Alvarez, head of the task force; Carlos Ramos, California Department of Technology Director and CIO; and Richard Pennington, general counsel and task force member.  

While there were many issues worth investigating, the task force focused on project approval, timeliness, and reducing complexity in the procurement process. Alvarez explained that project approval is a daunting, time-consuming step in the procurement process. The state used to require a feasibility study before every major IT endeavor, which proved to be time consuming, expensive, and not always necessary. The task force eventually ran a business process analysis and recommended removing the feasibility study requirement. Now, the state will be required to do market research to gain knowledge of the technology being procured, provide a thorough procurement plan, and develop a comprehensive budget. If the established procurement timeline is adhered to, then it is less likely that the project will fall behind. Expediting the approval process and replacing the feasibility study with simpler steps offers time saving and reduced costs while providing the same valuable information.

Currently, California has many measures in place to ensure a fair procurement that is open to all vendors, but it is not working as it should. In fact, it is decreasing the pool of vendors that can bid because the procurement process is too lengthy. This leads to the state acquiring technology that is outdated once the procurement process is all said and done. This current process is not beneficial to the vendor or the state.

In an effort to eliminate these outdated measures, the state has set a 10-month procurement goal from RFP release to contract execution. Ramos even went on to set a loftier 6-month procurement goal. He acknowledged that the timeline is not always feasible, but he’s had success with it in a recent cloud-computing procurement.

A major focus of the task force during the webinar was reducing complexity. Outdated measures, inefficient processes, and miscommunication with vendors have been an obstacle; therefore, the state went to the bidders and asked how they could better the procurement process. One answer rang clear: improve communication.

States will benefit from developing clear project goals and requirements ahead of time by determining the business problems to solve and why a new solution is needed. If the state is confident and detailed in what it wants to procure, it makes the proposal writing much easier for vendors. It also provides an opportunity to pre-screen vendors so that only the most qualified are spending time developing a bid.

California is also toying with the idea of working with potential bidders before a solicitation hits the streets. In a recent test run, the state reached out to vendors it thought were a good fit for procuring a new technology and asked them to come “live” in the California Department of Technology for a few days. The vendors observed the antiquated system, saw the problems that needed addressing, then sat down with state officials and wrote the requirements of the request for proposals (RFP) together. Vendors were then asked to submit bids for the project, and the state selected the most suitable provider. While slightly unconventional, it allowed maximum transparency for the vendors who were a good fit and gave them a say in what the state needed. It also offered valuable insight into their key competitors. This may not be the way of the future for all procurements, but it may be a successful method for more specialized projects.

In another effort to maximize communication, California has been using contract code 6611, which allows negotiations and communication all the way up to the day a contract is signed. It provides a vehicle for best and final offers as well as pre-mortem and post-mortem debriefs so that unsuccessful bidders can see who won and why.

Overall, California is making great strides to improve the procurement process. State officials want to hear what vendors have to say before, during, and after the process. They want to speed things up so that vendors can bid and win faster, and agencies can implement suitable, up-to-date technologies. Ramos acknowledged that technology is the future and California won’t be left behind.

Vendors should be vocal about wanting to be involved in California’s procurement makeover. The state is open and willing to hear bidders’ feedback, and being visible in the eyes of government will surely be beneficial. If these new measures prove successful in California, other states are sure to follow in the near future.

California procurement is going to be moving at a faster pace, and vendors need to keep up. There may be less time between requirements gathering, solicitation release, and award. By eliminating the mandatory feasibility study component, procurements will accelerate, which is bad news for consulting companies looking to win business. They will still find an opportunity to bid on larger, less defined projects where the state needs guidance, but they will be fewer and farther between. This may increase competition, so vendors need to bring their A-game.

Consultants will need to partner with larger companies to ensure they see business. Procurement roadmaps may include a feasibility study aspect in the planning of the project, so consulting companies should pair up with other bidders to win. Again, being vocal will only behoove vendors and push them to the top of California’s list.

You can learn more about current procurement opportunities in California in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

FITARA Promises Big Changes for Agency IT Investment

Predictions about what’s ahead in federal IT for fiscal 2014 have been appearing regularly in the trade press for the last few weeks.  I’m going to refrain from adding to these prognostications because if I’ve learned anything over the last few years it is that we are living in unpredictable times.  As an example I offer up the fact that Congress is on the verge of passing a bipartisan budget deal.  Who would have thought it possible, even six weeks ago?
The passage of a budget should ease industry’s anxiety a bit in fiscal 2014.  This said there is another piece of legislation under consideration that is worth paying attention to because it has the potential to disrupt the federal IT market this year and for years to come.  This legislation would be the Federal IT Acquisition Reform Act, otherwise known as FITARA.  FITARA includes the following key provisions and they go way beyond just IT acquisition.
  • The appointment by the President of one department-wide CIO with greater budget authority.
  • The creation of Cloud Computing Working Capital Funds to transition agencies to cloud solutions.
  • Regulations requiring business cases and value analysis to eliminate duplicate contract vehicles and spur strategic sourcing.
  • The development of a Federal Infrastructure and Common Application Collaboration Center to serve as focal point for development and maintenance of IT requirements.
  • A focus on fixed price technical competition with prices published in the solicitation and offerors competing solely on non-price factors.
  • A government-wide inventory of IT assets.
  • A renewed focus on data center consolidation and server utilization
  • The standing up of Assisted Acquisition Centers of Excellence to promote acquisition best practices, specialized expertise in IT acquisition, and to supplement shortages of IT acquisition personnel.
The enactment of FITARA would definitely change the way agencies budget for and acquire IT-related goods and services.  With this in mind it is worth considering how agency IT could be affected if (once?) FITARA is passed.  This was the subject of a recent panel discussion featuring current and former IT officials from the Department of Agriculture, the National Aeronautics and Space Administration, and the General Services Administration.  The speakers from USDA and NASA in particular were chosen because those agencies have already implemented a good number of FITARA-like policies and approaches.  They therefore serve as examples of what could happen after the legislation goes into effect.
Starting with the USDA, in her response to questions about the steps Agriculture has taken toward greater governance and coordination of IT investment, Joyce Hunter, Deputy CIO for Policy and Planning rattled off a series of achievements.  These include a Portfolio Management initiative that uses monthly TechStat meetings among component CIOs to determine the health of programs before moving forward.  The USDA has also established a governance structure consisting of an Advisory Council that vets proposed investments before sending these on to the CIO Council, and finally the “eBoard” which makes the final determination if the proposed investment can move ahead.
This oversight, Hunter stated, gives the USDA CIO the ability to look at component investments to ensure they are on time and on budget so that the department can avoid OMB and/or GAO scrutiny.  The USDA governance structure also includes CIO performance management goals that hold CIOs accountable for their investments and the performance of those projects.  CIOs are rated twice per year on meeting performance directives and measurements.
The result of this governance, Hunter claims, includes a $43 million reduction in data center hosting fees in 2013 alone, the consolidation of hundreds of mobile phone plans into just three, realizing $12 million in savings over 2012 and 2013, and the consolidation of Tier 1 Help Desk services into the U.S. Forest Service.
NASA’s achievements parallel those of the USDA, according to Lori Parker, Capital Planning Lead for NASA’s Office of the CIO.  Parker noted that NASA initiated PortfolioStat type reviews in 2007 in addition to other governance reforms like the creation of a Business Systems Management Board.  Despite the ongoing struggle to achieve the complete governance success it would like (e.g., spending at NASA centers remains too opaque in the OCIO’s opinion), the agency has been successful enough since 2007 to reduce its overall IT budget from $2.2 billion to $1.44 billion.
So, what does all of this tell us about the potential impact of FITARA?
  • First, it suggests strongly that less IT spending is in the cards.  Duplicative investments and uncoordinated spending across components will be minimized, if not eliminated.
  • Second, increased component coordination should strengthen the drive toward shared services as components identify common requirements and solutions.
  • Third, centralization could foster greater use of cloud computing.  There are other considerations that could also affect this trend (i.e., concerns about data security, cloud performance, etc.), but in theory a centralized IT approach should support movement toward the cloud.
This, then, is my version of a prediction for what’s ahead in fiscal 2014 and beyond.  The enactment of FITARA would mark a sea-change in the way agency IT investments are governed, making federal IT that much more competitive a market.


DoD Strives for Better IT Acquisitions

The Department of Defense is implementing a number of strategies to improve effectiveness, efficiency and management of IT acquisitions.

According to Deltek’s new report, Defense IT: Strategy, Implementation and Challenges, DoD has been striving over the last decade to improve services acquisition.  In 2001, (amended in 2006) Congress required DoD to implement a management structure for the acquisition of services.  DoD established new positions within its management structure to oversee and coordinate service acquisition, including senior managers within the office of the USD for Acquisition, Technology, and Logistics (USD(AT&L)).  USD(AT&L) also created its Acquisition of Services Functional Integrated Product Team, in part, to determine how to address legislative requirements to provide training for personnel acquiring services. 

In November 2012, DoD announced Better Buying Power 2.0 which builds on the previous Better Buying Power initiative which sought to increase acquisition efficiencies in order to “do more without more.”  Better Buying Power 2.0 encompasses 36 initiatives in the following 7 focus areas:  

  • Achieve Affordable Programs 
  • Incentivize Productivity & Innovation in Industry and Government  
  • Improve Tradecraft in Acquisition of Services  
  • Eliminate Unproductive Processes and Bureaucracy  
  • Promote Effective Competition  
  • Control Costs Throughout the Product Lifecycle  
  • Improve the Professionalism of the Total Acquisition Workforce

In December 2013, as one of his last acts as deputy defense secretary, Ashton Carter distributed a memo to the acquisition workforce implementing new DOD Instruction 5000.02 directed at streamlining the acquisition process and tailoring the process to the product or service being acquired.  The instructions will serve as interim guidance while USD(AT&L) develops a legislative proposal to simplify the current body of law into a more user-friendly set of requirements. 

DoD will continue to evolve its acquisition methods to adapt to the rapidly changing technical environment.  The goal is to balance the acquisition method to the need.  Emergent needs require an agile acquisition approach that is rapid, responsive, flexible, and enable innovation.  Deliberate needs require acquisition methods optimized for delivery of complex systems to include checks and balances for accountable acquisition, and that provide oversight and synchronization.

Deltek’s Defense IT: Strategy, Implementation and Challenges report also examines DoD’s strategic IT vision, environmental factors impacting execution, and the key technology priorities being deployed to support DoD’s mission and strategy going forward.  The report provides a view of the major drivers in the defense IT market with a focus on strategic direction, contracting preferences, contract opportunities and market forecasts for various major technology areas.


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