As expected, President-elect Obama's first cabinet-level appointee selections have come early and align with the most critical issues he'll face coming into office - the economy and national defense (however, Obama has not confirmed any of the picks circulating throughout the media, and we're hearing that he's more than a little irritated by the leaks coming from his transition team).

Word on the street is that New York Federal Reserve President Tim Geithner will be taking over the Treasury Department, Arizona governor Janet Napolitano has been selected as DHS Secretary, and Hillary Clinton as Secretary of State. Most recently announced is his choice to keep Robert Gates in his position as Secretary of Defense, and retired General James Jones as his National Security Advisor. We've also heard rumors of New Mexico Governor Bill Richardson for Commerce Secretary and former South Dakota senator Tom Daschle for DHHS Secretary. These individuals still face a fairly lengthy confirmation process (although a DHS Administration Transition Task Force recommended a expedited confirmation process for top DHS leadership for the sake of national security).

Following up on work it did in 2000 at the request of Congress (which was concerned about the lack of "depth and breadth of experience required to manage a federal agency effectively"), GAO has compiled a list of questions that should be included in the confirmation process. What could Tim Geithner, Janet Napolitano, Hillary Clinton, and Robert Gates be asked?

Here are some of the questions that GAO recommends:

Timothy Geithner, Department of the Treasury

There are inherent challenges in implementing and managing any new federal program. However, the Troubled Asset Relief Program faces a number of unique challenges in achieving its statutory purposes, which include mitigating foreclosures, stabilizing financial markets and protecting taxpayers. How will your prior experience help you in meeting your responsibilities over the Troubled Asset Relief Program?

Governor Janet Napolitano, Department of Homeland Security

The department is pursuing the Secure Border Initiative, a multiyear, multibillion-dollar program aimed at securing U.S. borders and reducing illegal immigration. Concerns have been raised about whether early results are meeting user needs, and whether the department will be able to deliver the program on schedule and at cost. Do you have significant experience you can cite with major programs or initiatives depending on the integration of technology? What were key success factors? Based on your experiences, what would be key considerations for deciding whether to continue when faced with significant delays or cost overruns?

Senator Hillary Clinton, State Department

What experience do you have successfully working with a wide variety of civilian and military stakeholders and balancing competing priorities, approaches, and objectives?

Robert Gates, Department of Defense (he may not have to go through the confirmation process again, but will likely face the same scrutiny from President-elect Obama)

To what extent do you have experience in managing complex organizations with large budgets, including developing near-term and long-term investment strategies, prioritizing resource needs, and balancing needs with resource constraints to prepare affordable program plans and funding requests? Given the significant challenges facing the department to address current, emerging, and future threats and the considerable increases in the department's funding to address these threats, if confirmed, what management actions and timelines would you establish to identify defense plans and budgets that are linked to a strategic, risk-based framework?

There are also questions specifically addressing acquisition management and information and technology management:

Acquisition Management

Information and Technology Management

Confirmation hearings are a matter of public record, and it will be interesting to see the new leadership's responses to these questions, especially those surrounding acquisition and informatio/technology management. While it would be promising to have a department Secretary well-versed enough to answer acquisition and technology questions in depth, I wonder if we may end up seeing responses that ultimately say, "I'll hire someone to think about that for me." As long as he or she sees the vision of technology in government, perhaps that's all that the contracting community can wish for - for now.

Automated Medicaid systems in Idaho have directly led to the delay and/or lack of services for some eligible individuals. The eligibility and claims processing systems lack coordination, integration and interoperability which are essential to not only to the quality of patient care, but also to cost-saving administrative efficiencies.

According to a state audit report released on Thursday, November 20, 2008 the Idaho Department of Health and Welfare's Medicaid eligibility system contains thousands of errors due to a lack of harmonization between the automated system used to determine eligibility and the system used to process payments. The problem has been on-going and was first scrutinized by the Legislative Services Office in 2003 which recommended reconciling the two systems. Auditors estimate that approximately 400 errors occur weekly but only 300 of those errors get corrected. Concerns are being raised over the potential for federal sanctions if the systems are not completely developed and integrated. The Department has responded to the audit indicating that the report was based on outdated information and that the Department has collected information to pass to the Centers for Medicare and Medicaid Services (CMS) to verify they are addressing the problem.

Both computer systems are scheduled for replacement next year which should assist in addressing system discrepancies. Unisys was awarded a contract for the Medicaid Management Information System (MMIS) which provides primarily claims processing services. Please see GovWin Opportunity # 36315 for further details. The Department released a Request for Information (RFI) for an Integrated Eligibility System in 2005, which encompassed several social service programs including Medicaid. However, a Request for Proposals (RFP) was never released and in February 2008 the Department confirmed with GovWin that they decided to go a different direction due to time and budget constraints. Reportedly, the work will be done by in-house staff. For additional details please see GovWin Opportunity # 32295.

Arizona governor Janet Napolitano will be President-elect Barack Obama's secretary of homeland security. Gov. Napolitano has been a staunch advocate of state's rights when it comes making the federal government cover the costs of deterring and detaining illegal aliens. She along with governors Perry (R-TX), Schwarzenegger (R-CA), and Richardson (D-NM) were urging comprehensive immigration reform long before it was popular in Washington. She was the only governor to use national guard troops to supplement federal border patrols, although she was never a fan of the border fence. So, assuming she does assume the post at DHS, here are a few observations.

1. Her appointment would further solidify GovWin's expectation that homeland security funding will continue to gravitate toward "blue state" concerns on the coasts, borders, and big cities--primarily seaport/container security, mass transit infrastructure protection, and a "kinder, gentler" approach to immigration control that relies less on workplace raids that serve only to rile up immigrant advocates and local chambers of commerce and manufacturer's associations.
2. GovWin's earlier expectations in regard to REAL ID under the Obama administration still hold. Napolitano will most likely be charged with ensuring that state driver's licensing is no longer the weakest link in the immigrant identity-documentation process. This process is well underway, and most states are probably already in compliance, but, before we can put this to bed, we'll need one more round of clarification regarding DHS's nebulous guidelines and one more round of federal funding. (If you thought the states hated picking up the tab for REAL ID prior to the economic meltdown...) Then the focus of attention will shift to the federal databases that are needed for states and employers to conduct adequate background checks.
3. Regarding IT, the $64,000 question remains. Will she continue to push top-down information-sharing systems out of Washington into the states and cities? Will she rely more on long-standing, consensus-built systems such as NLETS and RISS, which are far more popular among state and local law enforcement? Will she relax DHS's tribal obsession with security clearances and focus more on synthesis of open source and "homeland security sensitive" (but not classified) information into actionable guidance for state and local officials?
4. Sen. Obama campaigned on a platform supporting thousands more intelligence analysts at the state and local levels. This would require an intelligence-gathering and information-sharing infrastructure in fusion centers and EOCs far beyond what has been seen to date.
5. Will Gov. Napolitano be the first major official in the history of the federal government to actually care about "cyber security"--I mean really care?

At a recent blogger roundtable involving DHS Secretary Chertoff and TSA Administrator Hawley, industry writers and bloggers were able to delve into a variety of topics. While there was some interesting back-and-forth regarding airport security, international element of aviation security and a little looking forward to life after DHS, two topics of interest caught my eye.

The Economy

First, the Secretary was asked how the new fiscal realities will affect the activities and technologies at DHS/TSA. Secretary Chertoff brought up a new take on DHS acquisition by suggesting that leasing/renting equipment and technology specifically may be more reasonable for the department. It may require changing DHS internal processes and how Congress budgets for new technologies, but could be a solution to a rapidly changing environment. Here are a portion of his comments:

"One [dimension] is there is a more general question about how we pay for large technology purchases, particularly things which tend to become obsolete or overtaken by new technology. There's an argument that we ought to be doing is instead of buying this stuff we ought to be leasing it and returning it. That has tended to run afoul of the fact that it doesn't fit neatly into the budget, the way Congress budgets, but I think rather than not do something smart because it requires to retool our process, we should look at retooling our process and doing something smart. I think there's a real argument when you're making a major investment and technology is likely to, you know, in five years be transformed, what do you want to own this stuff for. What are you going to do with it afterwards? So that's one issue that may be visited in the area of the fiscal issue."

Secretary Chertoff went on to say it is likely that with a tightening budget might come reevaluating investments. For example in TSA, limiting an investment could be greater inconvenience or it could mean increased risk of an attack. It looks like with limited resources will come some tough choices regarding convenience, productivity and safety. Here is the rest of the Secretary's response:

"As with any other investment there's going to have to be a weighing of the risk involved in terminating or decreasing investments. So when it comes to our domain, like TSA, you're going to have to look at a couple things. If you don't continue an investment plan to upgrade, are you going to increase the risk of something bad happening on an airplane. And apart from the worst thing, which would be death and destruction there would be a huge economic impact, and that economic impact has to be weighed when you do the calculus. The second question is if you have a lot of delay, that has a cost in productivity as well. So to the extent you can have an upgraded technology that shortens the lines, gets more people to be willing to fly as opposed to take a train or drive, that arguably has a productive element as well."

Vendors looking to work with TSA over the next few years should champion any service or technology which can increase productivity and increase revenue especially by streamlining or cutting cost.

Spotlight: Behavior Detection Officers (BDOs) at TSA

The market is increasing for behavior detection technology and analysis as TSA plans to add more officers throughout the next two years. As you can read below, Mr. Hawley predicts the total added to be about 2,400 by the end of 2008 and another approximately 4,500+ in 2009. The overall consensus of the DHS officials was that behavior detection technology and officers are a low-tech solution with a high success rate. According to Hawley, Congress has supported increasing document checkers and behavior detection officers and will continue to fund increases. Here are some interesting comments with Secretary Chertoff and Administrator Hawley after being asked about hiring more officers for behavioral detection (specifically in airports):

Mr. Hawley: "Yes, so we'll probably have about 2,400 at the end of this year. We're looking to almost double that in the next year. And, as the Secretary says, it's an inexpensive but it is a highly effective layer that goes against all the -- you know, you have to predict...program your machine to detect this chemical or that chemical. With BDO's, we're picking up cash, we're picking up people who are being cash couriers who think they can get through that....It is highly, highly effective because terrorists have figured out what kinds of things can be detected in an x-ray or a pat down or whatever you have. But there is just no way to accurately predict that you're going to be able to beat the behavior system." Secretary Chertoff: "...And, you know, the more bad guys worry about that the better off we are...the best thing we can do in counteracting terrorism is [create] uncertainty."

While many other topics were discussed at the blogger's roundtable, I thought these two were interesting from a federal contracting perspective to help frame expectations for the future as well as take a look at a growing area within TSA.

Today, the North Carolina Department of Health and Human Services (DHHS), Division of Public Health (DPH), released a Request for Proposal (RFP #30-DPH-824-09) to acquire the services of a qualified design, development, and implementation (DD&I) vendor to design, develop and implement a custom, modern, configurable, web-based Women, Infants and Children (WIC) Information System (GovWin Opportunity ID 36225). DHHS seeks to establish a firm fixed price contract on behalf of the Special Supplemental Nutrition Program for WIC Crossroads Consortium. North Carolina has been appointed as the lead state for the Consortium, which also includes Alabama, Virginia, and West Virginia. Each of the participating states applied independently to be part of U.S. Department of Agriculture's (USDA) State Agency Model (SAM) initiative. The WIC SAM Project is a five-year Food and Nutrition Services (FNS) initiative to plan, develop, and deploy model information systems in WIC state agencies.

As per the RFP, the selected vendor will implement and properly configure the solution in each individual state. The systems will then be operated independently in each of the four states. The web-based architecture for each state will include a statewide relational database. The system will be operational as both a local agency/clinic level system providing the required functionality to support clinical services, administration, management, and reporting and as a state agency level administration, management and reporting system for the program. Additionally, the new WIC information system must be a fully functioning, robust system that can be easily transferred to other state WIC programs that are not part of the Consortium. Proposals are due by January 30, 2009. DHHS anticipates services to conclude in December 2010 with complete system rollout.

For more information on this solicitation, please refer to GovWin Opp ID 36225.

During an administration transition, the biggest, overarching question is about which policies will stay and which will go quietly into a Presidential library somewhere. Looking at President Bush's President's Management Agenda (PMA) is was clear that competitive sourcing was already on thin ice. A recent GAO report exploring competitive sourcing at the Department of Labor (DoL) is another crack that may mean the extinction of competitive sourcing in the Obama administration.

According to the GAO report, DoL held 28 competitions between FY2004 and FY2007 involving 1,029 full-time employees in areas such as training, information technology, and maintenance. DoL employees won all but three competitions, but it is not clear that DoL gained any increase in efficiency or cost savings. Some competitions resulted in government employees being reassigned, demoted, or fired, so Congress asked GAO to take a closer look. What they found was that DoL's performance and cost assessments were inaccurate and understated the full costs of implementing competitive sourcing.

The report also noted a racial element within the statistics. Although few employees have actually lost their jobs due to competitive sourcing, of the twenty-two employees that were demoted or laid off, all were African American.

GAO's findings casts a shadow over every other department claiming substantial savings and better performance from competitive sourcing. Senator Tom Harkin (D-IA) and Rep. David Obey (D-WI) called for the report, and will certainly make sure that this issue comes to the attention of President-elect Obama, nearly ensuring an end to the practice - at least in its current form. President-elect Obama does support the idea of employees competing for work (in fact he just scolded TSA for not allowing employees to compete for a contract it ultimately awarded to Lockheed Martin), but the outcome must be efficiency and cost savings. Harkin and Obey join the loud voices of federal employee unions that have protested the approach for some time now.

In a Government Accountability Office (GAO) decision released this week, the HUBZone set-aside program was preferred among all the other advantages or designations for small businesses. According to Washington Technology, the decision hinged on the word "shall." The FAR states that contracting officers shall set-aside contracts to HUBZone designated firms rather than the word may in reference to all other set-aside designations.

HUBZone Program: Ready for the Spotlight?

With the HUBZone program receiving a public notification to be utilized more, it made me wonder if the discrepancies from this summer have been resolved. If you remember, a GAO report was issued citing fraud and inconsistencies in how the HUBZone applicants are vetted and approved (read a previous GovWin blog about the report). As it was reported at the time, the Small Business Administration (SBA) had mistakenly placed more than $20 million in government contracts in the hands of undeserving businesses. This revelation prompted a House Committee hearing and brought national media attention to the GAO findings. Now, this same SBA program is being identified for greater usage. Is the GAO going to revisit the HUBZone program and measure the program's improvements? Can we trust, when a contracting officer looks to use the HUBZone program as directed, that the firms are all eligible?

Industry Comments

Nick Wakeman of Washington Technology asks a good question. Will decisions like this one pit small businesses against each other? Clearly, this isn't the intention of the GAO or SBA (presumably). On the other hand, the GAO decision clearly identifies HUBZone vendors as a priority when compared to others, such as service-disabled veteran-owned (SDVO) businesses. The intention of these programs has always been to cultivate small businesses and allow them to grow in a competitive and intense market. Now, instead of competing with large businesses and imposing market forces, these vendors are now competing for the attention of contracting officers. Not only do small businesses now have to focus on proving value and capability, these firms also have to defend their SBA preference program over the others.

Questions

The GAO already answered one of my questions. Who is going to monitor these programs and vendors to make sure all participants are complaint? The answer, the GAO is. The GAO's oversight is prompting the SBA to streamline their monitoring and enforcement practices. According to a November 21 report, the process to remove a company from a SBA program is lengthy and inefficient. The GAO continues to measure SBA's ability to regulate the vendor participants but both parties agreed that quicker action is needed. Yet, some broader questions remain:

• Can we expect this decision to delay the market research phase of upcoming procurements?
• Will this GAO decision prompt more contracting officers to look to HUBZone vendors first?
• Is it the responsibility of the vendors to make contracting officers aware that 2 or more vendors of a set-aside program are eligible for work?

On November 21, 2008 the State of New Mexico released RFP# 90-000-00-0027 for Enhanced 9-1-1 Systems, Related Systems and Services for Emergency Service Response (GovWin Opp ID 38817). Proposals will be accepted until December 17, 2008.

With the release of this RFP New Mexico seeks to expand its E-911 Program by updating its existing equipment and network. The State also seeks to find a consultant to plan and implement a Next Generation network like that described in The New and Emerging Technologies 911 Act of 2008. One of the key components of the proposed Next Generation network is providing dual networks serving each Public Safety Answering Point (PSAP), each carrying a split load of the traffic. One IP enabled network is currently functional, another will be necessary to ensure redundancy. This upgrade will allow citizens to provide information to 911 operators via: instant messages, text messages, pictures and streaming video.

Multiple Contract awards are expected in late January 2009. GovWin estimates the total value of contracts for this opportunity to reach $ 6.5 million.

Now that we know former South Dakota Senator Tom Daschle will be Obama's secretary of health and human services, can we divine what his agenda might be for health IT? I have previously looked at President-elect Obama's health IT pledges, which were most likely formulated with former Sen. Daschle. So, we can expect that the secretary-designate is in near total agreement with his boss.

As you might know, earlier this year Daschle published a book, Critical -- What We Can Do About The Health Care Crisis. In it he makes several references to the role "health IT" would play in health care reform. I've added some comments after each in italics.

• He cites and endorses a 2001 report on the transformative potential of health IT. (p. 36)

What? You couldn't find a more recent statement on the topic?
• Drawing on his Midwestern frame of reference, he argues that the government can do more to foster the adoption of "health-care information systems" via loans and loan guarantees--especially for non-profit providers--as it has in done in the past to encourage the spread of farming technologies. (p. 163)
  Wouldn't this also require some sort of health IT cooperative extension service? The county extension agents were integral to the modernization of farming. In the end, techology adoption is as much a show-and-do process as it is a product of funding.
• The government could also set national standards for clinical computing and serve as a clearing house of information about effective computing practices. (p. 163)
  The fed's track record in this area is not so hot. See the intractible example of public safety communications interoperability--a purely public-sector concern that is far less complicated than health IT.
• Again, drawing on his Midwestern frame of reference, he recommends the use of tele-health solutions to improve rural health care. (pp. 163-4)
  This is a no brainer, but don't overlook the potential ROI for home-based health care and prison health care.
• He recommends increasing the number of government-funded and community-based "safety net" health care centers and clinics. (p. 164)
  This would potentially increase the number of publicly funded consumers for health IT.
• The centerpiece of his approach would be a "Federal Health Board" that would compensate providers based on performance and adherence to "evidence-based standards." The board would encourage quality and savings through increased transparency of pricing and outcomes that would expose cost shifting and save consumers from having to shop "blind folded" when it comes to health care services. (p. 177)
  GovWin has been watching developments in this area for some time; however, quality standards are far from agreed upon and public utilization of this information has been limited at best.
• "(T)he executive branch would have to...(promote) the information technology infrastructure we so sorely lack." (p. 180)
  Promoting it is one thing. Building it is another. Only by building it could the federal government hope to "set the standards" he desires above. The government hasn't set a national standard with this much potential economic impact since it built the interstate highways.

Yesterday, November 20, 2008, Tony Montemarano, the Defense Information Systems Agency's (DISA) Component Acquisition Executive, briefed industry and the media on recent DISA happenings and initiatives at an Industry Advisory Council (IAC) Executive Luncheon. His discussion touched on topics ranging from DISA's forthcoming move to its new headquarters in Ft. Meade, MD, to his vision for the future of the agency, and how it will better carry-out its primary mission of supporting the war-fighter.

Hitting several general themes, Mr. Montemarano emphasized the importance of network operations, enterprise solutions, and coalition information sharing for meeting DISA's mission objectives. He also stressed DISA's need for increased contractor support in these areas, a theme that has been touched upon by numerous DISA executives over the last few months. DISA is perhaps unique among federal agencies in that its representatives openly express the desire to maximize contractor staffing and move its staff into primarily program management and oversight roles. Mr. Montemarano also commented on DISA's ongoing transition away from Time & Materials (T&M) contracting in favor of Performance-Based Contracting (PBC). Although Montemarano stressed that T&M contracting has its virtues, including ease-of-use and flexibility, the contracts awarded are often difficult to administer. Similarly, program objectives are difficult to define clearly and progress toward those objectives is tough to measure.

Moving away from DISA contracting, Mr. Montemarano turned attention to the 800-pound gorilla in the corner: DISA's upcoming move to Ft. Meade. The move, said Montemarano, should not result in a massive loss of employees, although how many employees will make the move remains an open question. DISA is implementing extraordinary measures in an effort to retain workers, such as paying for employee moving costs and arranging for employees to tele-work (at least part-time). The latter proposition presents challenges given the sensitive nature of much of DISA's work and agency leadership is struggling to address this by potentially authorizing some classified work to be performed at the Pentagon.

My thought coming away from the event is that DISA is obviously undergoing a major transition that could have big repercussions down the line. Mr. Montemarano counseled industry to be conscious of the transition's impact on current and future contracting efforts. This is good advice. Before making your move on a business opportunity, keep DISA's upcoming move in mind.