With last week’s passage of the Continuing Appropriations Act of 2013 (H.R. 933), the U.S. Department of Agriculture’s state-administrated Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) will receive $6.8 billion in discretionary funding. This will provide an additional $250 million for WIC and help alleviate the approximately $350 million cut from the program due to sequestration. Of this total, $35 million is appropriated for management information systems (MIS), and $14 million for infrastructure upgrades. The passage of H.R. 933 funds the government through September 30, 2013, and prevents a government shutdown.

According to the National WIC Association, “With this new higher funding allocation, WIC contingency funds, unspent SNAP transfer funds carried over from the previous year, and unspent recovered funds available for reallocation, WIC will likely be able to manage through the rest of the fiscal year without cutting any participants.” This is a turnaround from the 600,000 women and children projected to lose benefits as a result of the sequestration cuts that went into effect March 1.

Georgia, Indiana, and Rhode Island are just three of many states actively planning to replace or upgrade their MIS. As discussed in previous blogs, Montana and California are two states working to implement new or upgraded electronic benefits transfer (EBT) systems for WIC and other public benefit programs. Recently awarded WIC contracts include New Jersey’s Automated Client Centered Electronic Service System (WIC ACCESS) contract to CMA Consulting, Florida’s EBT contract to eFunds (FIS), and Indiana’s EBT planning services contract to JRW Service Corporation.

Deltek’s GovWin IQ database contains more than 80 pre-RFP opportunities relating to WIC information technology projects and related consulting and quality assurance (QA) services, as well as detailed award and contract information for nearly 100 awarded WIC contracts. Deltek is also closely tracking sequestration’s impact on government contracting and providing insight on how the vendor community can overcome the cuts and continue to win government business at the state, local and federal levels.

Non-subscribers can find out more about GovWin IQ and sign up for a free trial here!

This week the Congress passed a fiscal year (FY) 2013 funding bill that provides budgets for a handful of federal departments and continuing resolution (CR) level funding for the remaining departments and agencies through the end of fiscal 2013 on September 30. The final bill averts the potential for a government shutdown and funds key priorities while leaving intact the sequestration rules set under the Budget Control Act (BCA).

 

• Complies with the Budget Control Act spending caps by eliminating unneeded, unrequested funding that would be provided if the CR was extended
• Directs 671 cuts to unnecessary or under-performing programs and eliminates excess funding due to schedule delays, program terminations, redundancies, and budgeting errors
• Rescinds nearly $4 billion in unspent prior year funds
• Aligns funding to new Defense strategy to fund current needs and reprioritizes funds to address known shortfalls
• Fully complies with Senate Rule XLIV for transparency and maintains earmark moratorium
• Bill provides the necessary funding for training and military health care
• Adds $1.5 billion to the National Guard and Reserve Equipment account
• $486 million to repair aging base facilities
• Adds $463 million to mitigate shortfalls in day-to-day operation costs for installations
• Increases funding for nanotechnology, advanced materials, silicon carbide, and manufacturing technologies

• Coast Guard: $10.4 billion overall, of which $9 billion is discretionary spending. The bill also provides targeted increases above the FY 2013 request to support front line personnel with resources, including $8 million for initial acquisition planning and design of a new polar icebreaker and $20 million to reverse cuts proposed in the request for critical operational assets.
• Transportation Security Administration (TSA): $7.5 billion for TSA is reduced by $2.4 billion in offsetting collections and fees. The bill includes funding for investments in explosives detection systems, passenger screening technologies, and air cargo security. The bill includes several funding oversight requirements including expenditure plans for checkpoint security technology investments, explosives detection systems for checked baggage, and air cargo security. In addition, language is included requiring TSA to provide a five-year investment plan forecast for passenger screening technologies.
• U.S. Customs and Border Protection (CBP): $11.9 billion, which adds $79 million above the request for procurement, operations, and maintenance of critical air and marine assets used to defend our borders – including one additional multi-role enforcement aircraft, enhanced radar for unmanned aerial systems, and $28 million to increase flight hours.
• U.S. Immigration and Customs Enforcement (ICE): $5.7 billion for ICE, primarily supporting personnel and operations, including border patrol, special agents and immigration officials.
• United States Citizenship and Immigration Services (USCIS): $112 million in direct appropriations for USCIS and fully funds the E-Verify employment eligibility verification system.
• United States Secret Service: $1.6 billion, adding $3.5 million for priority domestic and electronic crimes investigations and continues the multi-year modernization of critical White House and other Secret Service information technology and communications systems.
• Science and Technology (S&T): $835 million, returning to FY 2011 levels, for R&D in biological defense, explosives defense, cyber security, first responders, border security, chemical countermeasures, and interoperability.
• Domestic Nuclear Detection Office (DNDO): $318 million, including $28 million for handheld portable radiation detectors and $75 million for research and development of next-generation detection technologies.
• National Protection and Programs Directorate (NPPD): $1.4 billion, including the following:
  • $232 million for a new account, the Office of Biometric Identity Management (OBIM). Instead of realigning the US-VISIT program as proposed in the FY 2013 budget, the bill creates a new account for OBIM, the DHS lead responsible for biometric identity management services.
  • $756 million for cybersecurity programs including Einstein intrusion detection and a critical cyber diagnostic strategy for the 118 federal agencies. Also included in cybersecurity funding is $16.8 million for cyber education programs.
  • $260 million in infrastructure protection programs to bolster against natural and man-made disasters, including $78 million to implement the Chemical Facility Anti-Terrorism Standards Program.
• Office of Health Affairs (OHA): $132 million, including $85 million for the Bio-Watch Program and $2 million to complete demonstration projects through the Chemical Defense Program.

• Homeless Veterans Programs: $5.76B for health care and support services for homeless veterans.
• Iraq and Afghanistan Veterans: $3.28b to meet the health care needs of veterans who have served in Iraq and Afghanistan, a $510M increase over FY 2012.
• Long Term Care: $7.2M for long term care for the nation’s aging veterans as well as severely wounded combat veterans from the wars in Iraq and Afghanistan.
• Information Technology (IT): $3.3 billion for IT projects.
  • $1B for pay and associated costs
  • $1.8B for operations and maintenance
  • $494B for DME including $169m for the iEHR and $38.5m the development of paperless claims systems. Requires approval for iEHR spending over 25% of total allotted. 

• National Institutes of Health: Provides $1.5b for NIH, a $71m increase including $165m for the National Children’s Study.
• Food and Drug Administration: Provides $2.5b for the FDA including $50m for implementation of the Food Safety Modernization Act.
• Child Care and Development Block Grant: Provides $2.3b for the program, which is a $50m increase for grants to states to improve working families’ access to quality, affordable child care.
• HHS Lease Assistance: Provides additional funding to address imminent lease expirations and consolidations to allow HHS to save millions in annual lease costs and reduce its real property portfolio.
• Head Start:  Provides a $33.5m increase for the Head Start program.

• Section 1801 of the legislation increases funding for highway, highway safety, and motor carrier safety programs to make them consistent with the levels previously authorized under the Moving Ahead for Progress in the 21st Century (MAP-21) Act. Total funding provided by MAP-21 was $561 million in FY 2013 and $572 million in FY 2014.
• Normalized MAP-21 funding potentially has an impact on initiatives related to the improvement of travel data collection and safety management. These initiatives would include active procurements for Compliance Test Procedures for Electronic Logging Devices and the Road Inventory Program, as well as task orders under contract # DTFAAC09D00081 held by SAIC for NextGen Initiatives Support Services.

• Department of Commerce will receive $7.7B in total funding.
• The National Oceanic and Atmospheric Administration (NOAA) will receive $5B, including funding for satellite programs.
• The Patents and Trademark Office (PTO) provides $2.88B.
• The National Institute of Standards and Technology (NIST) receives $809M for laboratories and research.
• Bureau of the Census will receive $906M.

• Department of Justice will receive $27.3B in total funding.
• Grants to State and Local Law Enforcement and crime victims total $2.2B. This includes funding for the National Instant Criminal Background Check System (NICS) improvements.
• Federal Bureau of Investigation (FBI) receives$8B for salaries and expenses for national security and counterterrorism investigations, combating cyber threats.
• Drug Enforcement Administration (DEA) receives $2.36B.

• Energy Department funding was reduced by a total of $44M.
• Energy Efficiency and Renewable Energy reduced by $11 M
• Nuclear Energy reduced by $10M.
• Science reduced by $13M.
• Advanced Research Projects Agency –Energy reduced by $10M to $265M.
• Atomic Energy Defense Activities, National Nuclear Security Administration (NNSA) $7.577B, an increase of $363M.
• Atomic Energy Defense Activities, Defense Nuclear Proliferation receive an additional $110M.

• USDA’s operating budget is a winner this time around as FY 2013 discretionary funding of $20.5 billion represents a 5% increase over the FY 2012 level of $19.5 billion. Funding includes:
• $24 million for USDA Departmental Administration to provide for necessary expenses for management support services and general administration. These support services include enterprise IT services provided by the National IT Center (NITC) and investments in enterprise IT modernization called for by the USDA’s Optimized Computing Environment (OCE) initiative.
• $44 million for the Office of the Chief Information Officer and $6 million for the Office of the Chief Financial Officer.
• $89 million for the Office of Inspector General that the legislation states may be used for contracting.
• $811 thousand for the Office of the Under Secretary for Food Safety and calls out that funding shall be directed to the Public Health Data Communication Infrastructure System (PHDCIS) until expended. This potentially affects the following vendors and contracts: General Dynamics, # AG3A94D090194 & Dell, # AG3A94D090137.
• $75 million for the Risk Management Agency (RMA), including funding that may be used for the Common Information Management System (CIMS). This affects the IT Support Services contract, # GST0011AJ0019, held by SAIC.

• National Aeronautics and Space Administration receives $17.5B in total funding.
• Space Launch System receives $2.1 B including funding for ground operations and construction and related test facilities.
• Funding for the International Space Station (ISS) includes $515M for commercial crew transportation to the ISS and $2.9B for operations and research.
• NASA Science includes $630M for Space Technology to support human and robotic missions.

• Safe Schools and Citizenship: Allows funds available under the Department of Education Safe Schools and Citizenship account to be used to assist educational institutions impacted by school violence.

• Bureau of Land Management $951M for Management of Lands and Resources, $0 for construction.
• US Fish and Wildlife Service, $1.2B for Resources Management

• Job Corps Program: Provides an additional $30m for the program.
• Unemployment Insurance: Decreases funding for grants to state agencies that administer federal and state unemployment insurance (UI) by $60m.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWin FIA. Follow on twitter @GovWinFIA.

 

• Cost-type contracts are second only to Fixed Price contracts as far as total dollar obligations are concerned.
• While the percentage of yearly total obligations made up by Fixed Price contracts grew modestly from 47% to 53% over the period the percentage of total yearly obligations made up of cost-type contracts grew from 21% to 37%.
• Cost-type contracts have grown by more than 65% from FY 2008 to FY 2012, compared to Fixed Price contract types which have increased 8% during the same period.
   

 

• Army’s use of cost-type contracts doubled over the period where Navy’s cost-type use increased by nearly 60%. OSD’s usage has grown most dramatically at 3X, but the relative dollars in this category is modest by comparison. The Air Force’s usage has been most modest of the four at roughly 10%.
• On average, the Navy makes up more than half of DoD’s yearly IT cost-type contract obligations over the period, compared to Air Force and Army making up approximately 20% each.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWin FIA. Follow me on Twitter @GovWinSlye.

• Total discretionary budget authority of nearly $1.2 trillion, including
• Full-year appropriations for Defense and Military Construction/Veterans Affairs committees
• Defense – $518 billion in non-war funding for the DoD, $87 billion for overseas contingency operations (OCO)
• MilCon/VA – $72 billion in discretionary funding for military construction and the Department of Veterans Affairs, with some shifting of funds away from military construction to support increase in veterans’ programs, which are exempt from sequestration
• The remaining federal agencies would be funded at fiscal 2012 levels under a continuing resolution covering the remaining 6 months of fiscal 2013

• Veterans Benefits Administration – Provides $3.3 billion for information technology, including $1 billion for staff pay, $1.8 billion for operations and maintenance, and $494 million for systems development, modernization, and enhancement. This DME funding is 2-year money available through FY 2014 but requires the VA Secretary or CIO to submit to Congress a certification of the amounts to be obligated for each project. Further, Congress requires approval of any transfers between the three funding sub-accounts or individual project funding increases/decreases of more than $1 million.
  
• No more than 25% of any joint DoD-VA integrated electronic health record (iEHR) may be obligated until the DOD–VA Interagency Program Office gets the approval of both Congressional Appropriations Committees on the planned costs, timelines, acquisition, etc.
  
• Of the $60.5 billion appropriated for veterans compensation and pension benefits programs no more than $9.2 million “shall be reimbursed to ‘General operating expenses, Veterans Benefits Administration’, ‘Medical support and compliance’, and ‘Information technology systems.’”
  
• $115 million for the VA’s the Office of Inspector General, to include information technology costs and for constructing, altering, extending, and improving any of the facilities.
  
• Only upon approval of Congress may the VA Secretary transfer funds to/from the VA’s ‘‘Information technology systems’’ account to/from the ‘‘Medical services’’, ‘‘Medical support and compliance’’, ‘‘Medical facilities’’, ‘‘General operating expenses, Veterans Benefits Administration’’, ‘‘General administration’’, and ‘‘National Cemetery Administration’’ accounts.
  
• Department of Justice, General Administration, Justice Information Sharing Technology receives $22 million, the National Protection and Programs Directorate, United States Visitor and Immigrant Status Indicator Technology receives $279 million, and the Office of Health Affairs receives $132.5 million, of which $85 million is for the BioWatch program.

• None of the DoD appropriation can be used for new multiyear procurement contracts for any systems or components if the value of the multiyear contract would exceed $500 million, unless specifically provided in the bill. A cursory review finds these are predominantly weapons systems, with some mention of commercial SatCom for naval vessels.
  
• The DoD provisions further stipulate that no multiyear procurement contract can be terminated without 10-day prior notification to the congressional defense committees.
  
• Defense Intelligence Agency funds may be used for the design, development, and deployment of General Defense Intelligence Program intelligence communications and intelligence information systems for the Services, the Unified and Specified Commands, and the component commands, unless otherwise stated.
  
• $12 million for mitigation of environmental impacts on Indian lands resulting from DoD activities, including training and technical assistance, related administrative support, the gathering of information, documenting of environmental damage, and developing a system for prioritization of mitigation and cost to complete estimates for mitigation.
  
• None of the funds in the Act may be used for research, development, test, evaluation, procurement or deployment of nuclear armed interceptors of a missile defense system. 
  
• $519 million in multi-year funds for  Cooperative Threat Reduction for the elimination and secure transportation/ storage of nuclear, chemical and other weapons; to prevent the proliferation of weapons, weapons components, and weapon-related technologies, etc.
  
• RDT&E New Starts Justification – Funds appropriated under ‘‘Research, Development, Test and Evaluation, Defense-Wide’’ for any new start advanced concept technology demonstration project or joint capability demonstration project may only be obligated 45 days after a report, including a description of the project, the planned acquisition and transition strategy and its estimated annual and total cost, has been provided in writing to the congressional defense committees. (The Secretary of Defense may waive this restriction on a case-by-case basis.)
  
• Funds appropriated for research and technology for programs of the Office of the Director of National Intelligence shall remain available until the end of fiscal year 2014.

• Federal Emergency Management Agency receives $35 million for the National Urban Search and Rescue Response System, $22 million shall be for capital improvements at the Mount Weather Emergency Operations Center, and not less than $5 million directed to the modernization of automated systems. 
  
• United States Citizenship and Immigration Services (USCIS) receives $112 million for the E-Verify Program. 
  
• DHS’s National Protection and Programs Directorate, Infrastructure Protection and Information Security receives $1.1 billion, with $328 million slated for Network Security Deployment and $218 million for Federal Network Security to establish and sustain essential cybersecurity activities, including procurement and operations of continuous monitoring and diagnostics systems and intrusion detection systems for civilian federal computer networks. $213 million (40%) of the combined $546 million is tagged as multi-year funding through FY 2014.
  

Some said it couldn’t be done, but there’s anecdotal evidence that Congressional bipartisanship exists. On March 6 the House passed a Continuing Resolution bill (H.R. 933) that would fund the government through the rest of FY 2013, and according to the Washington Post, there is optimism that the measure will pass in the Senate (with some amendments). The good news is that we may be avoiding yet another drama-filled “fiscal cliff” scenario. The bad news is that this version of the CR does not eliminate sequestration.

On February 5, the U.S. House of Representatives’ Committee on Oversight and Government Reform released a report detailing billions of federal tax dollars wasted annually by New York’s Medicaid program. While the report acknowledges that the Centers for Medicare and Medicaid Services (CMS) has not done enough to protect federal tax dollars from being misspent, the committee found that the worst abuser of the Medicaid program continues to occur in New York; its program is estimated to lose 10 percent of its Medicaid spending on fraudulent claims, and another 20 to 30 percent on unnecessary services. New York spent $54 billion in 2012 alone on Medicaid – the highest of any state in the country.

The report lists several contributing factors to high Medicaid costs in the state, including:

• Poor program oversight at the state and federal level
• Rampant waste, fraud, and abuse
• An antiquated, complicated payment methodology
• Medicaid funding-driven special interest groups
• Corruption and cronyism

A growing legal industry in New York is Medicaid estate planning, which involves transferring financial assets to trust funds or dependents to qualify for Medicaid. Another form of abuse includes “spousal refusal” – a sick person can transfer his or her assets to a healthy spouse, who can then invoke “spousal refusal” to decline financial support, qualifying the sick for Medicaid services. While other states do not openly acknowledge this practice, the state of New York provides a form letter for citizens.

With federal reimbursement for Medicaid spending open-ended, what incentives are in place for states like New York to hold themselves accountable to taxpayer dollars? The committee talked about New York’s attitude of “If it moves, Medicaid it,” which explains the $15 billion in development center payments alone over the past two decades, five times greater than the actual cost of providing services. The report calls for a full independent audit of the state’s Medicaid program; audit and budget expert oversight; adhering to eligibility thresholds; reducing excessive federal payments; estate recovery; and limiting executive compensation. With New York leaning toward participating in Medicaid expansion, cost control measures must be taken now before an even larger chunk of taxpayer dollars goes to a corrupted, bloated system.

More information on New York’s Medicaid program can be found here. Non-subscribers can gain access with a GovWin IQ free trial.

 

While uncertainty remains as to whether Congress and the White House will agree on appropriations for the remainder of FY 2013 that are in line with the authorizations in the NDAA, the fact that the president signed that bill introduces a glimmer of hope – especially since much of the NDAA increases (and decreases) seek to align the DoD budget with the latest defense strategy developed under Obama.

After a protracted pre- and post-election battle, President Obama and Congress have reached an agreement to avoid what is probably the most telegraphed punch in history: the “fiscal cliff.” But before we get too excited (whether it be because they were able to accomplish much of anything in this session of Congress or because we could possibly be retiring the annoyingly overused phrase “fiscal cliff), let’s take stock of what’s actually happened and what it means for federal contractors.

The most significant outcome of this legislation (aka the American Taxpayer Relief Act of 2012), for citizens is that there will be tax increases for households with taxable income over $450,000, tax stability through extended tax relief programs for everyone else, and an extension of unemployment benefits. The most significant outcome for government contractors: you have to wait another 2 months to know if and how sequestration will occur. While most are glad to see the players reach any kind of agreement, the general consensus is that this bill avoids the cliff but puts the government on a roller coaster. February and March will see agencies heading up yet another steep hill as Congress and the Administration work through yet another debt ceiling debate, sequestration rears its head again on March 1, and the current FY 2013 Continuing Resolution expires on March 27. March 27 is also the date that the spending reductions must be evaluated and implemented unless other legislation is enacted.

• Which budget accounts fund their contracts.
• Potential percentage cuts to the relevant budget accounts.
• The priority placed on the contract and/or contract options and modifications to learn if they will likely be funded even under sequestration.
• The possibility of moving options, modifications, task orders, etc. to be funded in the second quarter of FY 2013 to avoid the sequestration ax.