Spending Trends: DoD Enterprise Resource Planning Systems

The Department of Defense spends almost $7 billion per year to maintain and operate its nearly 3,000 business systems.  With an annual IT budget of more than $35 billion, this spending on business systems accounts for approximately 20% of the DoD’s IT budget per year.  That’s a lot of money and in a time of increasing fiscal tightness, the DoD has been working for years to implement large-scale Enterprise Resource Planning (ERP) systems that will enable the department to decrease spending on its business systems and finally achieve a legislatively-mandated clean audit by FY 2017.  Because the size of the DoD’s investment in ERPs is so large and the work has gone on for so long, this week’s post will take a look at annual spending on many of the largest ERPs being implemented.

The ERPs Examined

The table below contains a list of the 16 DoD ERPs for which spending data was compiled.  This is not a complete list of the ERPs being implemented across the department, but it does include most of the largest systems.  Multiple instances of these systems being implemented in the various military departments are also included.

Before going further, a comment must be made about the limitations to the government provided data.  The Office of Management and Budget (OMB) requires that every fiscal year departments must submit what is called a Capital Asset Plan and Business Case Summary for every one of its major IT investments.  These documents, referred to as Exhibit 300s, contain the numbers of contracts awarded for work related to the investment.  It is these contract numbers that have been used for the spending tables below.  Unfortunately, spending data is not available for each of the contracts listed, so the data presented here is only for contracts with verifiable spending data.

Spending Trends

Figure 1 below shows that annual spending on DoD ERPs increased every year from FY 2009 to FY 2012.  That trend ended in FY 2013 as spending declined by $318 million due to the impact of sequestration; illustrating that even programs mandated by Congress are not immune to the across the board cuts sequestration demands.  If sequestration continues in FY 2015 and beyond (as looks likely) it is safe to assume that spending will continue trending down to flat.  Concerning FY 2014, $364 million was spent in Q1.  If this trend holds steady throughout the fiscal year, spending will total at least $1.45 billion, reflecting a bit of a rebound due to the restoration of some funding by Congress.  It is doubtful that spending will re-attain levels seen in FY 2011-FY 2012.  Last but not least, annual spending on these DoD ERPs averaged $1.52 billion from FY 2009 to FY 2013.


Total Spending by IT Segment

Government reports obligations by Product Service Codes and contracting personnel are notorious for selecting codes that do not accurately reflect the product or service being rendered.  This being what it is, the following data is to be taken with a grain of salt.  In Figure 2 below categories of PSCs used for obligations on DoD ERP projects have been grouped into IT market segments – Hardware, Software, and Services.  Of the three, services spending far outweighs spending on either hardware or software, coming in at a total of $7.1 billion obligated from FY 2009 to FY 2014.  Obligations for software come in second with $541 million spent over the same 5.3 year period.  Obligations for hardware total $301 million.



Services Spending Trend

Taking a closer look at spending on services related to DoD ERPs, Figure 3 shows that it tracks very closely with the overall trend shown in Figure 1 above.  The exception would be FY 2012, which saw the beginning of a decline in services spending whereas overall DoD ERP spending continue to rise in FY 2012 before declining in FY 2013. 


Spending by Defense Entity

Finally, Figure 4 shows spending on DoD ERPs from FY 2009 to FY 2014 by Defense entity.  Data for only the top 5 organizations has been included here.  Of these, the Navy leads the way with just under $3 billion in obligations on its ERPs.  Army comes next with $2.3 billion in obligations, followed by the Air Force with approximately $1.3 billion.



Several implications can be drawn from this data:

  • No IT program is immune from sequestration.  Sequestration took a bite out of all IT spending across the DoD, including spending on critical ERP implementations that will enable the DoD to meet Congressional mandates for achieving a clean audit by FY 2017.
  • Spending is rebounding somewhat in FY 2014. The approval of an FY 2014 budget rolling back some sequestration cuts will provide some relief to vendors working on DoD’s ERPs.  This relief will not amount to a full recovery of spending levels attained in FY 2012, but it will provide breathing space until sequestration cuts reappear in FY 2015.
  • Services spending is likely to suffer in FY 2015.  The return of sequestration in FY 2015 is likely to translate into a big decline in services spending related to DoD ERPs.  Software and hardware spending are also likely to suffer, but proportionally less than services spending given that far more is spent on services annually.


Is DISA’s Commercial Cloud Services Acquisition Dead?

March was an interesting month for cloud computing at the Defense Information Systems Agency (DISA).  First, on March 18th the agency posted an announcement on its website that it “now offers milCloud, a cloud-service portfolio, featuring an integrated suite of capabilities designed to drive agility into the development, deployment, and maintenance of DoD applications.”  That same day, DISA’s Chief of Staff, Brigadier General Fred Henry, assured an audience at the AFCEA Army IT Day that the offerings of milCloud are comparable to those available in a commercial cloud, both in cost and capability.  One week later, Amazon Web Services announced that its cloud services had received from DISA “a DoD Provisional Authorization under the DoD Cloud Security Model (CSM) for Impact Levels 1-2.”  In receiving the DoD ATO, AWS joined two other infrastructure-as-a-service (IaaS) providers – Autonomic and CGI Federal – eligible to provide cloud services to Defense customers.  This announcement came less than two weeks after DoD CIO Teri Takai told a House Armed Services subcommittee that a total of nine cloud service providers are currently in the process of receiving authorization to provide cloud services to the DoD.

DISA’s milCloud announcement took many by surprise, particularly because the implications of it are that vendors will need to compete with the agency to provide cloud services to Defense customers.  On the face of it, this appears to be the case.  Defense customers will have the option of using milCloud services or those offered by commercial cloud providers at approved data impact levels.  In practice, however, I suspect there will be plenty of business to go around for commercial providers.  I think this because ever since the issue of DoD using cloud services arose some 4-5 years ago, there have always been core systems and capabilities that the DoD said it absolutely would not host in a commercial cloud.  Add to this the security requirements imposed by U.S. Cyber Command, and you can see why DISA would choose to play it safe by developing its own cloud solution.  At the same time, the department has for years sought to effectively leverage the benefits of cloud computing.  The milCloud solution seems to offer DoD the best of both worlds by balancing the need of Defense customers for access to cloud services in a secure, non-commercial environment.

More curious to me has been the issuance of ATOs to commercial cloud providers in the absence of a competitive setting.  I understand why the Cloud Broker PMO has done it, but is DISA now going to hold a competition for the Commercial Cloud Services Provider acquisition among only the handful of CSPs that have received ATOs?  Can you imagine the howl that will rise from industry (and maybe Congress too!) if competition is limited to only a small number of vendors?  How could contracts be awarded without dozens of protests that hold up the acquisition for years?

The question also arises if a competition to put a cloud services IDIQ into place is even necessary.  Now that multiple CSPs have been authorized to provide cloud services, what’s to stop any Defense customer from simply putting out an RFP for cloud hosting or migration services?  Having an ATO would be a requirement like any other professional certification (CMMI or ISO 9001:2000, anyone?).  The competitive pool would be limited to those vendors that have authorization. 

In short, I find the announcement of milCloud less interesting than the announcement from AWS about its ATO.  By awarding ATOs to AWS and others, DISA may have managed to side-step the entire question of whether a commercial cloud services IDIQ is needed.  Anyone want to bet on when the cancellation notice comes out?



NIST Forum Examines the Convergence of Cloud and Mobility

Of the more than 500 cloud computing efforts across the federal government being tracked by Deltek’s Federal Industry Analysis team, roughly 14% are related to communications and collaboration capabilities. Most of the efforts in this sub-group are for tools like email and SharePoint. A few, however, are for capabilities like unified communications and mobile device management.  That a small number of early adopters are dipping their toes into the water of cloud-based communications/mobility solutions indicates growing interest among federal agency customers. This interest recently coalesced into a 2.5 day long forum and workshop on the intersection of cloud and mobility hosted by the National Institute of Standards and Technology. NIST’s purpose in bringing together members of industry, academia, and government was to get ahead of what it expects will be a rapid convergence of cloud and mobile technologies in the next few years. This convergence is already taking place in the commercial world, a fact that has alerted NIST to the need for a standards-based ‘roadmap’ that outlines a path forward for federal agencies.

To that end, NIST invited speakers from the defense, civilian, and intelligence sectors of the federal government to discuss with industry and academia both the current status of cloud and mobility, and what they see coming in the future.  Although speaker comments touched on a wide number of subjects, this post will focus on three specifically: interoperability, security, and the path ahead.


Multiple speakers expressed concern that agency plans to use cloud are not adequately taking into account the need for interoperability between systems, applications, and platforms. In her morning keynote, Pamela Wise-Martinez, Senior Strategic Enterprise Architect at the Office of the Director of National Intelligence, explained that current limitations to interoperability are inhibiting the agility of cloud solutions being employed by the federal government. Stovepiped data and legacy systems are part of the problem, but lack of training is also a challenge as too many federal personnel don’t understand why increased interoperability is needed. Discussion of interoperability inevitably led to comments on data standardization and open architecture. Speakers agreed that both of these things are required to allow data to move freely, thereby enhancing agency efforts to share data.


Liberated, standardized data in the cloud enables to greater movement of it throughout the enterprise, leading to greater concerns about security. This may sound ironic, especially given that departments like the DoD have justified their efforts to implement a Joint Information Environment by claiming that non-stovepiped data is more secure. Jacob West, Chief Technology Officer for HP Enterprise Security Solutions, noted in his post-lunch keynote, however, that the growth of mobile and cloud solutions has dramatically increased the attack surface of most networks. Coimbatore S. Chandersekaran, Distributed Systems Chief Engineer at the Institute for Defense Analyses, echoed West’s observation, stating that edge (i.e., mobile) devices are typically weaker than machines in the data center, making them preferred attack vectors for those who would seek to steal data or harm Defense systems.

If adding endpoint devices and putting data in the cloud actually increases agency vulnerability, what’s the solution? Several were proposed, including increasing the use of analytics. Automating the process of identifying attacks can mitigate the effect of those attacks much quicker than when a human being is in the loop, HP’s West argued. However, automation can only be achieved with more extensive use of open architecture and standards. Conveniently, using analytics for continuous monitoring is a process well-suited for the cloud. Just take a look at the Defense Information Systems Agency’s new NSA-inspired Acropolis analytics cloud, for instance.
Speakers also noted a need for shared threat notifications to alert the government community (something that in itself needs to evolve and coalesce), as well as a need for agencies to implement credentialing strategies that provide visibility into who is on government networks, and to engineer systems with security as a core competency.

The Path Ahead

Lastly, several speakers took a shot at explaining what they see is on the horizon for cloud and mobility. Here are a few highlights.

Pamela Wise-Martinez (ODNI) argued that ‘boundary-less’ cloud computing is coming, particularly as analytics evolve, sensor clouds develop, and the ‘Internet of Things’ expands. The result will be the transformation of government into more a service provider than ‘big brother.’

Jacob West stated that industry needs a better way of collaborating to defeat cyber threats. Therefore, work should progress toward creating a community of trusted partners linked via an automated platform that catches a large number of threats and shares relevant information.

Finally, Dawn Leaf, Deputy Chief Information Officer at the Department of Labor, expressed her opinion that the shift of IT to a cloud-based services model is a mini-revolution. It will be this continued shift that drives the use of new technologies, not the development of the technologies themselves.


IT services contracts remains a big player in Texas

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

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

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

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

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

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

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Deltek Pulse: Health and human services month in review, February 2014

Last month, the health and human services team saw the release of approximately 900 solicitations with either heath care or social services as a primary vertical. The word cloud below represents the frequency of terms in those solicitations.


As one can see from the below map, California, Pennsylvania and Texas saw the largest number of health and human services-related opportunities, while the state of Wyoming had no related activity.

Notable Opportunities

  •  The Connecticut Department of Children and Families released a request for information (RFI) on February 19 for its Statewide Automated Child Welfare Information System (SACWIS). The limitations of the state’s current SACWIS (LINK) are numerous, given that LINK was initially implemented in 1996.
  • The South Carolina Department of Health and Human Services released an RFI on February 6 for technologies and related services that can be used to advance price and quality transparency in health care for the state.
  • The California Department of Public Health released a draft invitation for bids (IFB) for consulting services relating to the California Immunization Registry (CAIR) 2.0 System.
  • The Delaware Department of Health and Social Services, Division of Public Health, is currently working on a request for proposals (RFP) for Women, Infants and Children (WIC) electronic benefit transfer (EBT) services. The state is planning to implement an online system.
  • The New York Department of Health recently confirmed that it will be releasing an RFP for an all-payer claims database (APCD) data intake solution. The state previously released an RFI for these services.
  • The Louisiana Department of Children and Family Services released an RFI on February 7 for Disaster Supplemental Nutrition Assistance Program (DSNAP) services. The department’s Office of Emergency Preparedness is seeking information from qualified companies that can demonstrate the capacity to design and maintain DSNAP in any contingency. Responses are due on March 10, 2014.
  • The Alabama Department of Human Resources released an RFP for SNAP quality control review assessment and training. The department plans to develop a new review process that will result in improved accuracy in the review of SNAP cases.

Analyst’s Take

Again, the month of February brought several notable opportunities released in the health care and human services space. States will continue to tweak their health insurance exchange (HIX) systems to make sure they are functioning properly for consumers. State officials will also start thinking about ways to ensure these systems are financially sustainable from 2015 and beyond, since grant funding from the Department of Health and Human Services (HHS) will close at the end of 2014. Vendors needing an updated report regarding the HIX market can find a new Deltek Industry Analysis piece, here. Vendors should also be on the lookout for an upcoming Deltek report on the ever-evolving MMIS market, expected later this spring.

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




DoD’s Focus on Unmanned Systems Benefits Big Data Providers

Defense Secretary Chuck Hagel got a jump on the budget season recently by outlining cuts that will be made to the Department of Defense’s budget request for fiscal 2015.  From the content of Hagel’s remarks it’s easy to conclude that no part of defense spending will be spared the budget axe.  Indeed, the doom and gloom surrounding the DoD’s FY 2015 budget has been a constant theme in the press since the Secretary’s presentation.  Lost in the noise, however, is the fact that Hagel indicated an area of technology spending that would not suffer as badly - intelligence, surveillance, and reconnaissance (ISR).  At the risk of stating the obvious, the shrinking ranks of military personnel should force an increase in the use of technology solutions to fulfill the DoD’s mission.  The question is where will the dollars flow once the budget has been approved?

Unmanned Systems

General Martin Dempsey, Chairman of the Joint Chiefs of Staff, is on record as being a big supporter of unmanned systems.  To quote comments he made back in 2012 at the Joint Warfighting Conference and Exposition: “Unmanned technologies are on the rise, and they’re gaining importance not only in terms of effectiveness, but also in terms of their versatility and value.  In an era of fiscal constraint … a platform that offers those traits will almost always be the right one in which to invest.”  Taking direction from this, it’s logical to assume that the DoD’s investment in unmanned systems will continue to be strong.  It may not rise by much, but in today’s environment flat is the new up.

The DoD’s Unmanned Systems Roadmap, published in 2011, offers some guidance on where DoD investment might go.  According to the Roadmap, spending to develop and acquire unmanned capabilities was expected to total $36.4 billion through fiscal 2016.  Although these forecast totals have come down somewhat in the years since 2011, DoD requests for funding related to unmanned systems have still remained north of $6 billion per year, illustrating the importance the department places on this technology area.

The DoD anticipated spending 85% of its ISR investment dollars on air systems, 14% on ground systems, and 1% on maritime systems.  Recent developments reinforce the fact that these priorities remain intact.  For example, in late 2013 the Air Force ISR Agency issued a new strategic plan that outlined the need for a shift in spending from unmanned ISR assets capable of operating in “permissive” environments to those that can operate in contested ones.  The Marines are also interested in unmanned systems, piloting a new unmanned Mobile Detection Assessment Response System (MDARS) in Afghanistan.  Capable of patrolling an area up to one-mile away, MDARS is capable of doing intelligence gathering duties the Marines won’t have the personnel to perform.

Implications for IT Providers

Where does this focus on unmanned ISR leave information technology providers?  In the cat-bird seat, to be honest.  The massive amount of data that unmanned systems generate has a significant knock-on effect for Defense IT spending.  So much data is produced so quickly that human beings cannot make sense out of it and yet the DoD wants to make data driven decisions.  The need to make sense out of the data automatically generates requirements for more and better storage solutions, as well as database software and advanced analytics.  Also, as the DoD seeks ways to utilize satellite-based electromagnetic bandwidth to transfer the data, its need for advanced data management products and services will only grow.

In sum, the DoD’s turn toward unmanned systems is a boon for IT providers, especially those that offer big data solutions.  Deltek recently forecast in its Defense IT: Strategy, Implementation and Challenges report that the DoD’s addressable core big data market will rise from an estimated $670 million in FY 2013 to $880 million in FY 2018.  This equates to a CAGR of 5.6%.  So, while the Defense budget may be dropping overall, there are areas of opportunity for those properly positioned to take advantage of the market and technology trends.  Big data solutions related to ISR data collected from unmanned systems is one of those growth areas.


Are Feds Struggling to Move to the Cloud?

A report on cloud adoption in the federal government has been getting attention recently.  Entitled The Road Ahead: Three Years after Cloud First, the survey-based report found that since the announcement of former Federal Chief Information Officer Vivek Kundra’s Cloud First initiative in 2011, federal agencies have struggled to implement cloud computing.  As evidence one slide in particular shows that “just ten percent [of agencies] have migrated more than half of their IT portfolio to the cloud.”  Common roadblocks to adoption, survey respondents said, include a lack of staff necessary to execute agency cloud strategies and a lengthy procurement process that hinders cloud adoption.

As someone who keeps a close eye on the federal cloud market, I have to admit I wasn’t surprised by the findings.  The halting nature of agency movement to the cloud has been well documented in my posts and inreports on the federal cloud market published by the Federal Industry Analysis team.  This said, however, the picture of federal cloud adoption presented in The Road Ahead shows several disconnects between the respondents and the available data.

For example, although 49% of survey respondents said they’d moved less than 10% of their IT portfolio to the cloud, 51% of respondents said that they’d moved 11% or more of their agency’s IT portfolio to the cloud.  I found this reassuring.  It tells me that agencies are moving to the cloud as quickly as they feel comfortable making the transition.  Could they move faster?  Of course, but we need to remember who we are talking about here.  Federal agencies operate within a risk-averse environment, but early cloud mandates forced them to move quickly and without well-laid plans.  A measured pace was called for and now that they are approaching cloud on a broader scale they have the opportunity to accelerate adoption.  In addition, it’s worth noting that most agencies don’t have the goal of moving 50% or more of their IT portfolio to the cloud.  In the Federal Cloud Computing Strategy published in 2011, agencies reported that, in aggregate, only 25% of the $80B in OMB-reported IT spending was even appropriate for the cloud.  So, as agencies gather momentum they’ll be able to have more informed conversations about the cloud and this is good news for industry.

Turning to the lack of staff needed to execute cloud strategy, this is a valid concern.  Hiring freezes, retirements, and staffing cuts have had an impact on agency IT operations across the board.  But this isn’t bad news for the market as agencies are turning to vendors for help.  Here at Deltek we classify cloud efforts into several categories.  These include consulting efforts we call “cloud enabling” and “cloud strategy.”  Cloud enabling efforts involve engineering/design to make systems and applications ready for migration to the cloud.  Since FY 2009 approximately 10% of the efforts we’ve identified could be classified as cloud enabling, and this doesn’t count many of the almost 300 other efforts we classify as “pure cloud,” (i.e., actual migrations or purchases of cloud-based capabilities) that include cloud enabling type work.  Add another 21 cloud strategy efforts in which vendors are assisting agencies with developing cloud strategies and what we have is a complex picture of a market in transition.

Survey respondents also mentioned a procurement bottleneck.  Here again there seems to be a disconnect between the survey responses and the data.  Without a doubt the overall IT procurement model leaves a lot to be desired.  However, contracting shops still found ways to award cloud contracts valued at more than $20 billion dollars from FY 2009 to FY 2013.

I am bullish on the prospects for the federal cloud market because the data tells me the market is growing.  To reinforce the point here are a few statistics:
  • To date, 48 agencies have acquired or are actively procuring a cloud service.  Of these 48 agencies 30 have engaged in 3 or more cloud efforts, this includes the Department of Defense and associated Military Departments.
  • 126 cloud efforts have been private cloud deployments, whether in a private government or commercial cloud.  This compares with 85 deployments in commercial clouds and 213 efforts where the deployment type could not be identified.  These statistics reinforce findings in The Road Ahead that agencies are moving mostly to private clouds.
  • Concerning how agencies are using the cloud, five areas stick out in particular:
    • 45 efforts identified have been/are for data center services, basically hosting and computing services.
    • 34 efforts have been/are for software development, essentially development and testing environments.
    • 28 efforts have been/are for email, yet this is primarily what we hear about in the media.
    • 27 efforts are for content and data management, including database hosting, content management systems, archiving, etc.
    • 25 efforts have been for cyber security purposes, including identity access management, network access management, and continuous monitoring.

The future looks bright too.  Deltek’s cloud forecast projects that the federal cloud market will grow almost threefold from $2.2 billion in FY 2014 to $6.15 billion in FY 2018 at a compound annual growth rate (CAGR) of 18%.  Our data shows that agencies are actively engaging industry partners to develop cloud strategies and implement solutions that make even greater use of cloud computing in the future.  Barring any extreme setback like a massive data breach or catastrophic failure of a cloud hosting facility, I’d expect to see agencies accelerate their adoption of cloud solutions.  This can only be good news for industry and agencies alike.


Information Technology Provisions in the 2014 Farm Bill

After years of delay, the latest Farm Bill (H.R. 2642) is making its way through Congress. President Obama is expected to sign the bill once it clears the Senate. Officially titled the “Federal Agriculture Reform and Risk Management Act of 2013,” the legislation contains a lot more than provisions applying to agricultural subsidies and oversight. There are several information technology provisions as well that will be of interest to the contractor community. These provisions are particularly relevant to the Department of Agriculture’s use of big data analytics, which Congress is pushing the agency to use.

Ferreting Out Fraud

In 2013 the Federal Crop Insurance Program (FCIP) paid out $17.3 billion to American farmers for crop losses due to extreme weather conditions. This amount was a record for the program and that kind of money tends to draw attention. Suspecting that fraud may account for a certain percentage of the payments being made, Section 1107 directs that the Secretary of Agriculture “use all available information and analysis, including data mining, to check for anomalies in the provision of revenue loss coverage payments.”

While this provision does not explicitly demand that the Risk Management Agency acquire data mining tools it can use to find “anomalies,” it does suggest there is a need for such tools at the RMA that industry may want to investigate. However, before anyone gets too excited and begins calling around the RMA, be aware that there is an entrenched IT provider to contend with. Presumably any investment made in response to provision 1107 would be part of the RMA’s Emerging Information Technology Architecture (EITA) efforts, which are intended to “replace mission-critical legacy financial and business systems that are at or past end-of-life and unable to meet the demands of the current Risk Management Program.” This would suggest that any data mining tools required are likely, but not guaranteed, to be procured under a $208 million IT services contract awarded to SAIC in 2011 (Contract #GST0011AJ0019).

Pine Needles in Haystacks

AG doesn’t just insure crops, it also counts trees. In an effort to get a better handle on U.S. forest inventory, Section 7401 directs the Secretary of Agriculture to revise the USDA’s strategic plan for forest inventory and analysis. The key to collecting the required data is collaboration between “the Natural Resources Conservation Service, National Aeronautics and Space Administration, National Oceanic and Atmospheric Administration, and United States Geological Survey to integrate remote sensing, spatial analysis techniques, and other new technologies in the forest inventory and analysis program.”

Again, it’s impossible at this point to know how the U.S. Forest Service will fulfill this requirement. FS has been working for years to upgrade its IT systems. Most of this investment takes place under the Forest Service Computer Base (FSCB) program, with work being performed by a number of industry partners. The FSCB contract I have my eye on that could be relevant to Section 7401 is #IND11PC40028, held by Snap, Inc. An 8a IT company, Snap provides computing infrastructure support to the Forest Service under this contract. Presumably, integrating data from multiple agency sources for the forest inventory program would require work on the systems for which Snap provides support. Should this not be the case, then we could see a solicitation for this requirement in FY 2014.

$55 Million to Go Organic

The final provision worth examining from an IT perspective is Section 9004 concerning organic agriculture. Section 9004 is the only provision in the Farm Bill that explicitly directs the Secretary of Agriculture to make an IT investment. Specifically, “the Secretary shall modernize database and technology systems of the national organic program” and the program will receive $11 million each fiscal year from 2014 to 2018 to get the job done. In short, the USDA will be throwing $55 million at the modernization effort, making this an effort worth keeping your eye on.


Security Concerns Hold Up DISA’s Commercial Cloud Procurement

On a recent snowy Tuesday while many of us were stuck in the house due to the weather and even the federal government was closed, AFCEA DC held its January Monthly Luncheon with several officials from the Defense Information Systems Agency (DISA).  The big topic at the luncheon was the status of DISA’s commercial cloud computing procurement.  Toward the end of the last fiscal year DISA delayed the release of the cloud solicitation to reassess the demand for cloud services within the Department of Defense.  Public details on what was being reassessed were not available until this AFCEA luncheon and as the panel made clear the list of subjects under consideration is extensive.

Dave Mihelcic, the agency’s Chief Technology Officer, informed industry that properly addressing security requirements is a big hurdle for DISA.  Basically, the agency doubts a one-size-fits-all approach to the cloud acquisition will work.  DISA will instead tailor the prospective contracts to suit all six levels of security requirements outlined in its recently announced cloud security model.  Tony Montemarano, DISA’s Director of Strategic Planning and Information, added that the small number of available Federal Risk and Authorization Management Program (FedRAMP) compliant commercial solutions was further complicating the acquisition.  The problem is too few companies currently meet DISA’s security needs, creating a choke point that hampers the agency’s ability to procure the solutions it requires.

Then there is the requirement imposed by U.S. Cyber Command that the agency be able to understand exactly what's happening if/when there's an anomaly in the cloud provider’s network and determine a fix as quickly as possible.  As Montemarano noted, there is concern about the impact on day-to-day network operations of taking data and computing capacity that's currently housed within the military and placing it in outside servers that the department's cyber workforce might not have complete visibility into.

The speakers added several other concerns, including the need to develop criteria for identifying applications that are commercial cloud eligible and reforming cumbersome policy barriers that severely slow the pace of migrating applications to the cloud.  These concerns, while serious, took a back seat to the far more complicated security requirements.

Major Takeaways

The panelists’ comments contained several potentially important implications for the DoD’s use of commercial cloud solutions.

  • First, security requirements for handling data at 6 different levels of classification, and for using different service delivery types (SaaS, PaaS, and IaaS), are seriously complicating the acquisition.  The contract(s) put into place must provide DoD customers with flexible solutions that accommodate varying levels of need.  To me this says that the commercial cloud program will either be carved into multiple procurements competed separately based on data classification levels or be implemented as a single acquisition with multiple vendors selected to provide services in different functional areas (for lack of a better term) by data classification level.  Both options scream multiple award IDIQ contract.
  • Second, DISA is seriously considering following the approach the CIA took when it hired a single cloud provider to provide an infrastructure walled off from the Internet.  This strikes me as the option the agency will eventually choose.  I think this because it is the simplest way forward and because the DoD has shown a growing tendency in recent years to leverage the experience of the Intelligence Community when it comes to implementing new technologies.  The similarity of the Joint Information Environment (JIE) and the ICITE initiatives comes to mind here.
  • Third, as expected, FedRAMP compliance will be absolutely required for vendors to win contracts.  The recently announced June deadline for FedRAMP compliance makes more sense now, doesn’t it?
  • Fourth, the command and control requirement created by U.S. Cyber Command hints that DISA will require continuous monitoring of cloud provided services.  This means that all cloud systems will need to be interoperable with the JIE and accessible by the Acropolis analytics cloud that the agency just stood up.
  • Fifth, the panel stated that applications selected for commercial clouds will be migrated during technical refresh cycles.  For what it’s worth, this is exactly the process being used to refresh hardware for the JIE.

As we can see, these implications could have serious repercussions for the type of acquisition that DISA carries out and for the requirements that it puts in the solicitation.  Not the least of these implications is cost.  The FedRAMP requirement alone ensures that being a cloud provider for the federal government just got more expensive, suggesting vendors need to weigh their path forward carefully in this increasingly difficult fiscal environment.


Deltek pulse: general government January review

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

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

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

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

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

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

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

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

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

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



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