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Deltek Pulse: General Government Services August review

Posted on: September 10, 2012 | Posted By: Nooshin Rezazad
Related Categories: Public Finance, Education, Cloud Computing, State & Local, ERP

For years, Deltek’s health care/social services and justice and public safety teams have offered monthly recaps of their vertical’s procurement activity. Now, Deltek is launching a new edition of the Deltek Pulse recap series with a monthly review of general government services activity. These recaps will encompass several opportunities Deltek tracks in the GovWin IQ database outside of health care and justice and public safety.

Tracked opportunities by vertical segment and number of new solicitations released:

General Government Services: 8
Term Contracts: 5
Public Finance: 4
Education (Primary/Secondary): 3
Economic Development/Regulation: 2
E-government: 1
Enterprise Resource Planning: 1

Notable projects:

The North Carolina Department of Public Instruction (NC DPI) issued a request for proposals (RFP) on August 20 for identity and access management for the North Carolina Education Cloud. The NC Education Cloud (NCEdCloud) will provide a cloud-based infrastructure for the statewide K-12 education enterprise. The system will upgrade from an LEA-hosted server infrastructure to cloud-hosted infrastructure.

The state of New York is in the beginning stages of a massive IT infrastructure overhaul, called the IT Transformation Project. The umbrella program included the release of a half dozen RFIs last year for services including cloud computing services, data center services, converged network services, and enterprise identity and access management software. The first formal RFP was issued on August 22, 2012, seeking IT office equipment. Expect more RFPs for this major project in the coming months.

The Wisconsin Department of Public instruction (DPI) released an RFI in 2006 for the development and deployment of an online educator licensing system for the DPI Educator Licensing Project. This month, the department decided to purchase software and services for the Educator Licensing Online (ELO) project from Iron Data without soliciting bids. The system must be implemented by June 2013 in order to comply with the terms of a grant awarded to the state.

The city of Naperville, Ill., released an RFI in 2011 for an e-procurement e-payment service provider. On August 10, 2012, the city released an RFP for accounts payable services, including procurement card services and e-payables. The city intends to continue using Sungard-HTE for its ERP system, and will also consider stand-alone solutions as well as those that will integrate into the current ERP.

Industry analysis:

The mismanagement and corruption regarding procurements released by the New York City Department of Information Technology and Telecommunications (DoITT) caused Mayor Bloomberg to create a nonprofit office to oversee all projects. The NYC Technology Development Corporation will take over the majority of project management and strategic sourcing responsibilities the DoITT used to have.

The Port Authority of New York and New Jersey (PANYNJ) is working to develop a transparency website that would make several different types of procurement documents available to the public. The authority is under pressure from Governor Christie, who is pushing for greater transparency reform efforts.

Government IT spending is on the rise with an estimated $140 billion spent annually on IT needs. As a result, the presence of Gov 2.0, IT firms have been growing and offering IT services and products at little cost.

WSCA assisted Colorado with itse-procurement project by providing expertise on working with various procurement laws and procedures. SciQuest was ultimately awarded the contract. In the future, other states, particularly those with outdated ERP systems, may follow in Colorado’s footsteps.

Notable awards:

The New York/New Jersey Port Authority awarded a contract to Cedarcrestone in the amount of $11.2 million for its enterprise resource planning system.
The Ohio Public Employees Retirement System (OPERS) awarded a contract for a core network upgrade in the amount of $789,895.
The Dallas/Forth Worth International Airport Board awarded a $105,000 contract to Lumenate LP for Hitachi data systems enterprise storage hardware.
The city of Naperville, Ill., awarded a $342,280 contract for a core network replacement to Sentinel Technologies. The city also awarded a $45,000 contract for IT support services to Sentinel Technologies.

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CBO: Budget Sequestration or Not, the Department of Defense May Be Scrambling in FY 2013

Posted on: July 23, 2012 | Posted By: John Slye
Related Categories: Public Finance, Department of Defense, Policy & Legislation, Congress

There is just 166 days remaining in calendar year 2012 and until – barring legislative intervention by Congress and the White House – budget sequestration takes effect under the Budget Control Act of 2011 (BCA). Since the passage of the BCA and the failure of the joint (super) committee to identify the additional reductions as mandated by the Act there has been increasing attention on the potential impacts of sequestration on the Department of Defense (DoD) from a mission as well as an economic perspective. In the midst of this, the Congressional Budget Office (CBO) recently released a report analyzing the budgetary impacts of DoD’s Future Years Defense Plan (FYDP) for 2013 and CBO’s findings suggest that budgetary gymnastics may be only beginning.

Last February, DoD submitted a fiscal year (FY) 2013 budget request totaling nearly $615 billion – about $526 billion for base programs and day-to-day operations and about $88 billion for overseas contingency operations (OCO). Similar to most budget requests that the DoD submits to Congress each fiscal year, the department provided an accompanying five-year plan called the Future Years Defense Program (FYDP). The FYDP describes the DoD’s plan for its standard activities and, therefore, it generally relates to the base budget. Given the impact of current plans and decisions on future budgets the CBO routinely reviews the FYDP to project its budgetary impact over several decades. CBO’s latest report released this week analyzes the budgetary impact of the current 2013-2017 FYDP for its impacts from fiscal year 2013 through 2030.

Key CBO Conclusions

The department would require $535 billion in FY 2013 to execute its FYDP base-budget plans for 2013. This is $9 billion higher than DoD’s budget request. Here, CBO includes the cost of all active-duty personnel instead of the department’s proposed shift of the cost of some personnel out of the base budget to overseas contingency operations (OCO.) (The BCA caps do not apply to OCO and certain other activities.) CBO shifts a total of $15 billion of personnel costs back to the base budget over the 2013–2017 timeframe. This contributes to CBO’s estimate that the overall cost of implementing the FYDP for 2013 through 2017 is about 4.7 percent higher ($123 billion) than DoD’s own estimate.
To follow through on its FYDP base-budget plans after 2013, the department would need to return to near their 2012 level of $543 billion in 2014 and then grow at 2 percent on average annually through 2017. CBO projects that the current FYDP would require defense appropriations to grow at an average annual rate of 0.9 percent from 2017 to 2030.
Under DoD’s current plans, from 2013 to 2030 the primary cause of growth in DoD’s costs would be in the area of operation and support (O&S), in which DoD projects significant increases in the costs of military health care, compensation of the department’s military and civilian employees, and various operation and maintenance activities. Weapon systems replacement and modernization costs would grow from $168 billion in 2013 to $212 billion in 2018 —a 26 percent increase.
In constant dollars, the cost of DoD’s base-budget plans for 2013 through 2021 is $508 billion higher than the BCA’s defense discretionary funding limits before sequestration reductions and $978 billion higher than the available funding after sequestration.

The bottom line is this: Under CBO projections the costs for DoD’s plans would exceed the funding available through 2021 under the caps established by the BCA.

Implications

Aside from the non-trivial implications to national security and defense readiness, there are already current and ongoing implications to the defense industrial base and the larger economy and we are seeing increasing awareness and concern. Just yesterday, in a House Armed Services Committee Hearing entitled Sequestration Implementation Options and the Effects on National Defense: Industry Perspectives, Lockheed Martin CEO Robert Stevens testified that the looming threat of sequestration and ongoing uncertainty is already impacting the defense industry by stalling investments in people, plans and infrastructure. Stevens cited the Worker Adjustment and Retraining Notification (WARN) Act that requires companies to give affected employees 60 days notice (or more) of any plant closings or significant layoffs. But given the “fog of uncertainty" on if/how the Congress and Administration will avert or implement sequestration it is impossible to effectively plan and target notices, resulting in a much wider disruptive impact. Stevens estimated that sequestration “is likely to result in about a 10 percent, across-the-board reduction, at the program, project and activity level for most accounts.”

Earlier this week, the Aerospace Industries Association released research led by George Mason University economist Stephen Fuller on the broader economic effect of sequestration. In short, Fuller estimates that in 2013 alone, the nation would lose over 2 million jobs, $215 billion in gross domestic product, and more than $100 billion in the personal earnings of the American workforce if sequestration takes effect in January.

With or without sequestration, DoD may need to scramble to manage its 2013 budget situation. CBO estimates that for 2013 DoD’s current plans would cost $14 billion more than the BCA’s limits before sequestration and be $66 billion higher if sequestration occurs. To further squeeze things, DoD would have just 9 months after the January 2013 sequestration taking effect to deal with the mandated cuts.

This immediate and ongoing budget pressure will require the DoD to revamp their plans even more dramatically for fiscal 2014 and beyond and this will likely have further ripple effects through the defense industrial community, the substance of which is even murkier than what is currently faced under the current fog under impending sequestration. Ongoing uncertainty may be the only thing we can know for certain.

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Social media business opportunity growth in state and local government: The story in stats

Posted on: July 12, 2012 | Posted By: Chris Cotner
Related Categories: Government Reform, Public Finance, Education, Transportation, Contract Awards, Contract Opportunities, Forecasts & Spending, Procurement, Technology Trends, Outsourcing, Emerging Technologies, State & Local, Health Care, Justice/Public Safety, Social Services, Homeland Security, Community Development, Social Media

Deltek recently published a report on social media use in state and local government (subscribers click here for free report download; non subscribers download for a fee). In that report, Deltek identifies several trends related to social media use in state and local government:

· Social media and mobile application use are growing in society.

· State and local government had significant growth in social media use from 2010 to present (Mossberger and Wu, 2012)

· 80 percent of State and local government employees see their agencies increasing social media use in the next 12-18 months (Market Connections, 2011)

Most notably, social media-related business opportunities have been increasing since 2008.

· 2012 has a robust number of social media business opportunities

· Initially, it looks like a drop off of 28.6 percent from 2011 to 2012.

· However, we only half way through 2012.

Since we are only half way through 2012, analyzing opportunities through the first 6 months of each year is a better comparison and illustrates a growth trend. For example, there is a 46 percent growth in opportunities in 2012, compared to the same point in 2011.

Comparing current opportunities (blue line) to January through June opportunities (orange line) demonstrates the continued growth of social media opportunities in 2012. Using the existing data to project future growth (green line) demonstrates the future projected strength of the market.

· Through the first half of 2012, more social media opportunities than first half of 2008, 2009, 2010, or 2011.

· 2012 is projected to have the most state and local government social media opportunities than any previous year.

Analyst’s Take

· Social media related business opportunities are projected to continue upward growth for the next several years prior to market saturation.

· Even after initial market saturation with current social media applications and technologies, implementation will open the door to innovation of new technologies and applications that will make social media functionality an essential component of most IT solutions.

· The paradigm shift presented by social media use in state and local government (see the Deltek report, here), will drive further innovation and social media integration.

· The combination of technology and government innovation will drive social media functionality in IT systems moving well beyond the initial market saturation and well into the foreseeable future.

Recommendations

· Get in on the ground floor now with developing social media technologies, functionality, and integration that government can use.

· Collaborate and partner with government to develop social media solutions.

· Integrate social media functionality into your current solutions.

· Integrate social media functionality into existing government enterprise systems.

· Develop mobile applications with social media features as an integrated part of current solutions.

· Look to integrate social media functionality.

· Make plans to grow your state and local government-related business.

Subscribers have access to the full article, here, including more detailed graphs and figures.

If you haven’t done so already, download the Deltek report on social media in state and local government, here

Read the previous blog on social media, here.

Read the previous blog on crowdsourcing data,here.

Follow me on Twitter @GovWinCCotner.

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Deltek releases state and local government social media report

Posted on: June 29, 2012 | Posted By: Chris Cotner
Related Categories: Government Reform, Public Finance, Education, Transportation, Mobility, Communications Services, Big Data/Analytics, Department of Homeland Security, Health IT, IT Services, Contract Awards, Contract Opportunities, Forecasts & Spending, Procurement, Technology Trends, Outsourcing, Emerging Technologies, State & Local, Health Care, Justice/Public Safety, Social Services, Homeland Security, Community Development

Social media is one of the hottest topics in both government and the government contracting community today. Since 2008, overall social media (SM) use and state and local adoption rates have been astronomical. SM is also presenting a new paradigm for service delivery and innovation in state and local government. SM platforms (including mobile applications) can be used for direct government/citizen engagements that are profoundly changing society.

Beyond the influence of direct engagement, these SM platforms and related mobile devices can aggregate crowdsourced data to inform decisions. In turn, these informed decisions can be used to innovate and improve government by delivering more efficient services (either directly or by augmentation). SM interactions (including data gathered to inform decisions and services) can lead to greater innovation, improved government accountability, and broader civic engagement.

For the government contractor community, this change presents a myriad of business opportunities:

· Working collaboratively with state and local government now to build short and long-term policy and related solutions; these solutions will be the foundation for future implementations.

· Creating new solutions that were previously unimagined.

· Adding value to existing vendor solutions through IT integration.

· Adding social media integration to existing state and local government IT systems, including at the enterprise level.

· Aggregating the big data of social media for government innovation.

· Creating purpose-built mobile solutions that integrate social media to improve government service delivery

Deltek has researched and tracked these state and local government opportunities with SM components since 2008, when they first appeared in solicitations. As expected, while initially slow, the number of opportunities has grown and remains relatively steady (Figure 1, below). Opportunities are also spread across each state and local government type. While the majority of opportunities reside with the states, some of the more cutting edge and interesting opportunities are in the localities. Looking forward, opportunities are projected to grow along with state and local government’s increased use and integration of SM technology.

Figure 1: Deltek Opportunity Analysis – Social Media

For more insight on the implications of social media on state and local business opportunities, read Deltek’s recently released report, here.

Subscribers also have access to this article in Analyst's Perspectives, here.

Read our recent blog on crowdsourcing, here.

Read our recent blog on social media, here.

Follow me on Twitter, here.

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Good news: Updated state budget projections and business opportunities

Posted on: June 22, 2012 | Posted By: Chris Cotner
Related Categories: Public Finance, Education, Fiscal Update, IT Budget, Forecasts & Spending, Procurement, Budget, State & Local, Health Care, Justice/Public Safety, Social Services, Homeland Security, Community Development

The news for state government finance during the recession and slow recovery has been challenged, at best. States reported widespread problems meeting their budgetary obligations during the recession and enacted a variety of measures to remain solvent in the face of declining revenues. The bulk of the most challenging cuts came in 2011 and 2012, as states adjusted to winding down stimulus dollars. Figure 1 (below) illustrates the budget measures states took in efforts to balance their budgets.

Figure 1: State Strategies for Budget Balancing FY 2011-2012

The balancing strategies resulted in 2012 being one of the toughest fiscal years on record, with combined all funds budgets falling $42.1 billion (-2.4 percent) from 2011. It was the first all funds drop in state budgets since 1987 and dramatically juxtaposed to the $87.9 billion (+5.6 percent) overall state budget gains from FY 2010 to 2011. Putting the record 2012 state budget losses in prespective, the data includes the seminal 1987, 2000, and 2001 stock market losses and resulting economic declines (with 2012 still being the only overall loss).

Even with all of the recent negative press, there is excellent news for state government contractors in 2013 and beyond. Deltek’s annual state budget analysis shows that with state revenues on the rise, all funds budgets are set to rebound in 2013, increasing $20 billion (+1.21 percent) to $1.67 trillion overall.

Continuing the positive trend, Deltek’s updated state budget projections show great news for continued upward growth in state budgets moving beyond 2013. What we found is graphed below (see Figure 2).We call it the “Good-News Graph.”

Figure 2: State All Funds Budget 10-Year Projections

Analyzing Figure 2, from FY 1987 through FY 2010, the data is remarkably consistent with an average 6.24 percent compound annual growth rate (CAGR). However, as the recession took hold, growth rates slowed to 3.56 in 2011 and fell into the red for 2012. The budgetary growth from 2008-2011 in the face of recession and slow recovery was due to many factors, including: federal stimulus funding, increased health care costs (both for state workers and through the increased Medicaid rolls as the result of the recession), increased retirement/pension costs for state workers, and unemployment compensation.

Subscribers have access to the rest of the article, including additional projections about the state government market, here.

Or, download the associated free whitepaper, Good News: Improved State Budget Projections and Business Opportunities.

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Congress Seeks to Avoid Budget Sequestration, but are the Defense Impacts Already Underway?

Posted on: June 11, 2012 | Posted By: John Slye
Related Categories: Public Finance, Office of Management and Budget, Department of Defense, Policy & Legislation, Federal, Congress

Last year’s Budget Control Act (BCA), a.k.a. debt ceiling deal, and the failure of the so-called Super Committee to agree on further reduction plans set in motion the eventuality of budget sequestration that would kick in billions of dollars in across-the-board budget cuts beginning in January 2013. The looming specter of major budget cuts to the Department of Defense (DOD) and resulting impacts on military readiness, etc. has spurred both the U.S. House and Senate to take up legislation to curb sequestration before it is too late. But will they get the law changed in time? And even if they do, has damage already been done?

The BCA sequestration plan would cut $492 billion in defense spending between 2013 and 2021 on top of $487 billion in reductions the Pentagon is already implementing. This raises issues of how such cuts might impact the military’s ability to respond to the increasing span and scope of threats. The 2013 National Defense Authorization Act (NDAA) in the Senate takes up the issue head-on. According to the Senate Armed Services Committee report “The committee recommends a provision that would make certain findings and require the Secretary of Defense to submit to the congressional defense committees a report no later than August 15, 2012 on the impact on the Department of Defense of the sequestration of funds authorized and appropriated for fiscal year 2013 for the Department if automatically triggered on January 2, 2013.” (Sect. 104, p. 185)

In May, the House passed the Sequestration Replacement Reconciliation Act along party lines that would significantly reduce cuts to defense. According to media reports, the bill would eliminate $72 billion in mandated sequestration cuts to both defense and non-defense spending and add $315 billion in new cuts to non-defense over the time line. The net result would be a reduction in total discretionary spending for FY 2013 of $19 billion below the level set in the Budget Control Act (BCA), a.k.a. debt deal. But this legislation was “dead on arrival” at the Senate as Senator Reid (and the President) are well on the record that they will only accept deficit reduction solutions that rely on raising taxes, not just spending reductions.

Implications

If the Senate Armed Services Committee provision for an impact assessment from the Pentagon survives in the NDAA, the report will not come back in time for the Senate to take action before the recess. So with the House measure dead, the question turns to what impact the Senate Armed Services Committee approach will have and whether Congress will be able to pass a solution during lame duck session after election. This likelihood is very unclear and how optimistic you are to the effectiveness of lame duck sessions will drive whether or not you see the current sequestration as inevitable.

Aside from the impacts on military readiness, training, and morale of those in uniform there is also the impact to the defense industrial base that supports our military, and this has broader economic implications. At a recent industry event, Christine Brim, the Center for Security Policy, estimated that the national economic impacts of defense cuts on these proportions could be on the order of 1.3 million jobs lost.

If both chambers of Congress cannot put together an alternative, is there any chance of avoiding sequestration and the broad impacts? Possibly. Under the BCA the ultimate decision falls to the Office of Management and Budget (OMB) on whether and how any sequestration would be implemented, so the White House does have some significant latitude here. A CBO report from January affirmed that OMB “has sole authority to determine whether a sequestration is required and, if so, the proportional allocations of any necessary cuts.”

But any mitigating action by OMB may be too little, too late. The effects of impending cuts are already rippling through the industry. At the same security policy event, Mackenzie Eaglen of the American Enterprise Institute suggested that we may already be seeing the impacts of a “soft sequestration” as we see bids pushed off, RFPs delayed, orders postponed or cancelled, and delays of other sorts crop up with increasing frequency. And when things get deferred . . . when budgets don’t get passed ... when we have continuing resolutions (CR) year after year, they often get cancelled. These delays and cancelations hit the industrial base as well as the armed services, and since most large contractor teams are made up of numerous small businesses, these smaller firms may really feel the pinch.

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Could government IT be the silver lining to GAO's grey cloud forecast for state and local finances?

Posted on: April 6, 2012 | Posted By: Chris Dixon
Related Categories: Government Reform, Public Finance, Policy & Legislation, Health Care, Financial Crisis

In recent years the federal Government Accountability Office (GAO) has released an annual report, State and Local Governments’ Fiscal Outlook. The most recent April 2012 update declares that “base case simulations show that the fiscal position of the sector will steadily decline through 2060 absent any policy changes.” Of course, we all know when we drive our cars that we are destined to crash absent any use of the steering wheel. Unfortunately, this 60 year projection leads to many breathless headlines in the major media, such as this one from Reuters: “Outlook still grim for US state, local budgets-GAO”

That’s not to say the GAO report is not of value. However, it must be understood within its context. It is a long-range planning document based on the Congressional Budget Office’s (CBO) projections. The GAO report justifies its projection as follows:

We calculated that closing the fiscal gap (2013 to 2062) would require action to be taken today and maintained for each year equivalent to a 12.7 percent reduction in state and local government current expenditures.Closing the fiscal gap through revenue increases would require action on that side of a similar magnitude.

Such adjustments are not out of the realm of possibility. Significant economic growth, a war, or the implementation of value-added taxation (VAT)—to name just a few examples—could spur dramatic changes in state and local fiscal conditions over the next 50 years.

The report points to health care costs as the primary driver of its baseline scenario:

The model’s simulations show that the sector’s health-related costs will be about 3.9 percent of GDP in 2012 and 7.1 percent of GDP in 2060. In contrast, our model shows that other types of state and local government expenditures—such as wages and salaries of state and local workers—are expected to decline as a percentage of GDP. The model projects that the sector’s non-health-related costs will be about 10.4 percent of GDP in 2012 and 7.8 percent of GDP in 2060. (emphasis added)

The good news for government IT vendors here is that GAO's projected 25% decline in non-health-related costs (e.g., wages and salaries of state and local workers), considering continued population growth and service demand, would have to be due in large part to the implementation of technological automation. Moreover, regardless of the fate of the Obama administration’s health care reforms, that legislation is only the beginning of a major national effort to reign in GAO's projected 82% increase in health-related costs through public and private action in coming decades. Government IT will have a growing role in that effort as well via health insurance exchanges, health IT, and MMIS modernization.

Analysts Take:

Long-term projections are good food for thought; however, long-term projections about government and policy are pinned to human nature, which can vary widely over the long run. Deltek will continue to monitor state and local fiscal conditions. You can find our free 2011 white paper on the subject here.
State and local spending on government IT could benefit within such a dire fiscal environment. While I don’t believe the state and local fiscal situation will be as bad as the GAO’s forecast, Deltek is confident that technology goods and services will increasingly be a contributor to solving long-term fiscal problems.
State and local policy leaders are not unaware of the challenges they face. Deltek research has found many governors and some local leaders beginning to focus on a wide range of government streamlining and performance-based management initiatives. This is only the tip of the iceberg. Fundamental reengineering of state and local government will be incremental and ongoing over the next decade or two.

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The New Jersey comeback: reality or rhetoric?

Posted on: March 22, 2012 | Posted By: Stephen Moss
Related Categories: Government Reform, Public Finance, Education, Transportation, Fiscal Update, Transparency, Forecasts & Spending, Policy & Legislation, Procurement, Consolidation, Budget, State & Local, Health Care, Justice/Public Safety, Social Services, Homeland Security, Community Development

Governor Chris Christie’s FY 2013 Budget Proposal’s optimistic, albeit tempered slogan, “continuing the New Jersey comeback,” shines light on future priorities of the third-year Republican governor. The use of such lofty phrases by politicians can seem trite or lacking in veracity; however, through Deltek’s in-depth budget analysis, it’s become clear that in terms of all-funds spending, this assertion is largely correct.

In March 2010, shortly after his election, Christie stood in the well of the New Jersey Assembly and declared that “time has run out” on the state’s extravagant spending habits. Christie stated, “The bill has come due,” and the tab was staggering. New Jersey faced an $11 billion budget deficit for FY 2011, with $121 billion in unfunded health benefits and pension liability. Meanwhile, state spending increased by 56 percent from 2001, and taxes at all levels had ballooned to the highest rates in the nation. The remedy for what Christie termed “a lack of discipline” was to implement dramatic cuts to the state budget; the rollbacks were so steep that detractors called them draconian. General-fund spending in FY 2011 decreased; however, there was an actual increase in all-funds spending from the previous fiscal year. Nevertheless, the rhetoric was cast, and the narrative in place for a dramatic course change and an equally impressive recovery.

Figure 1: New Jersey All Funds Budget FY 2011 - 2013

In Figure 1, above, the governor’s all-funds budget requests from FY 2011 to 2013 can be plotted as a serious, nearly 4 percent decrease over two years. Steep cuts at the beginning to accomplish ambitious goals outlined in the FY 2011 budget address tapered to a modest, less than 1 percent decrease from FY 2012 to 2013. Since Deltek’s analysis looks at the funding requested in the governor’s budget proposal, the figure below only represents the numbers from the initial budget request at the beginning of the process. As mentioned, the graph shows a slight decrease in total funds from FY 2012 to FY 2013; however, the actual funds appropriated by the legislature in the FY 2012 final budget were in fact less than the governor’s request and the numbers represented below. In reality, there was a 0.83 percent increase in funding from FY 2012 to FY 2013. Thus, the real story is a year of dramatic cuts, with a slight funding increase for FY 2013. The comeback in spending has begun, though modestly.

Subscribers have access to expanded analysis, data, and the full article, here.

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Celebrating National Purchasing Month: big, Texas-style transparency

Posted on: March 19, 2012 | Posted By: Randi Powell
Related Categories: Public Finance, Transparency, Contract Awards, Contract Opportunities, Business Development Tools, Forecasts & Spending, Procurement, Outsourcing, Budget, State & Local, Health Care, Justice/Public Safety, Social Services

The state of Texas is known for doing things big, and with the third largest state budget in the country, the Lone Star State tends to spend big as well. In 2011, the state spent $94 billion in total expenditures, with approximately $660 million spent on IT-related goods and services alone. Earlier this month, the Texas Department of Information Resources (DIR) informally announced upcoming contracts with both Capgemini (opportunity A) and Xerox Corp (opportunity B) that would replace the troubled IBM (opportunity C) contract. The new multi-year contracts for data center management and operations services are worth $127 million and $1.1 billion, respectively. So, who is tracking all this money, where is it going, and how exactly is it being used?

Texas State Comptroller Susan Combs is responsible for capturing how all public funds are collected and used. When Combs took office in 2007, she wanted to make transparency a priority. She understood that on the heels of an economic crisis, prompted by shady transactions and closed-door deals, the call for transparency in government had become a hot topic. Later that year, Combs began posting state agencies’ expenditures online, which provided details – down to the purchase of each pencil – on how the state spent public money. Today, her office tracks half-a-billion dollars a day, and the transparency website is updated with the latest numbers every evening. It’s no wonder that the Texas Transparency Web portal was recently ranked No. 1 for government spending transparency by the U.S. Public Interest Research Group (U.S. PIRG).

The open data made accessible on the website not only lists expenditure by year and agency, but also lists links to all state contracts including DIR statewide co-op contracts. This website can be an invaluable tool for vendors interested in doing business with the state. They can learn which agencies use which contracts, and how much they spend using those contracts. In addition, the state’s transparency website provides contract information such as incumbent pricing and detailed scopes of work.

For example, the Texas transparency website details that in 2011, the Health and Human Services Commission spent $22 million on computer hardware and software, $135 million on data processing and programming services, $10 million on IT equipment repair/maintenance, and $3 million on telecommunications equipment and software. The website also reveals that 79 percent of the nearly $170 million public dollars spent for the commission’s IT-related needs went to just four vendors: Northrop Grumman Systems, Deloitte Consulting LLP, AT&T, and IBM Corp (see Figure 1). This in-depth financial transparency can help vendors build their business pipeline and get a leg up on winning future contracts.

Figure 1: Allocation of 2011 IT Expenditure in Texas among the top seven grossing vendors from the eight largest state agencies

As always, follow us on Twitter @GovWin_GenGov

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Illinois’ FY 2013 Budget: Navigating away from “empty promises”

Posted on: March 15, 2012 | Posted By: Joanna Salini
Related Categories: Government Reform, Public Finance, Fiscal Update, Budget, State & Local, Health Care, Justice/Public Safety, Social Services, Homeland Security

Governor Patrick Quinn unveiled his proposed FY 2013 budget to the General Assembly on February 22, 2012. His plan outlines a need to repair a broken system and restore fiscal stability through major reductions and state spending reforms. While Governor Quinn’s plan emphasizes a need to cut costs and reduce spending, the budget is projected to spend more in FY 2013 than in 2012

While Governor Quinn’s plan emphasizes a need to cut costs and reduce spending, the budget is projected to spend more in FY 2013 than in 2012. The top vertical increases are public finance at 102.8 percent, and higher education at 52.62 percent. The top vertical decreases are justice and public safety at -10.90 percent, PK-12 education at -9.02 percent, and economic development/regulation at -8.05 percent.

Governor Quinn did not specifically outline his plans for upcoming IT expenditures in his budget address. However, IT budgets for FY 2013 dropped 11.67 percent from FY 2012, which can largely be attributed to the completion of many IT projects. The greatest vertical IT reductions were shown in general government (-20.23 percent), PK-12 education (-74.45 percent), and higher education (-36.23 percent). Verticals with the biggest gains were health care (70.24 percent) and social services (7.65 percent).

Analyst’s Take

Governor Quinn freely acknowledged the economic hardship facing Illinois, and the need for fiscal stability to maintain social programs. The greater need for agency spending cuts in 2013 most likely caused a drop in IT expenditures from the previous year. However, the increase in the overall budget from 2012 to 2013 indicates the expansion of some programs. Vendors looking to do business with Illinois should not be alarmed by the need for agency spending cuts as the state does not seem to be making any overwhelming reductions. The state began several IT projects in FY 2012; therefore, the limited funds this year could mean those projects were completed or money is being used to maintain current systems

Illinois has been taking the steps necessary to institute reforms, improve its budget health and rebuild a solid infrastructure. As new reform initiatives are at the forefront of the state’s agenda, vendors will be able to take advantage of opportunities for new solutions that will be sought to reduce cost and improve efficiency.

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