Analysts Emily Magurne and Erin Brady report.

Grant funding for education initiatives is crucial to improving the U.S. academic system so students can get the most out of their education, and teachers can provide the best learning environment possible. Education-related grants that provide access to technology for students and faculty are incredibly important, as these resources may not be available without the extra funding. As part of our American Education Week blog series, GovWin is offering background information on three education grants and reporting on projects taking place as a result of awarded funds.

As states and localities seek to obtain waivers from the strict laws implemented through the No Child Left Behind Act, the Obama administration has expressed interest in allowing school systems more flexibility with their Race to the Top (RTTT) grant program. The RTTT program is the Obama administration’s attempt at improving education standards while providing much-needed funding on a state-by-state level. The program is a competition designed to incentivize states to create plans and advance reform in four areas determined by the U.S. Department of Education:

• Adopting standards and assessments that prepare students to succeed in college and the workplace and to compete in the global economy
• Building data systems that measure student growth and success and inform teachers and principals about how they can improve instruction
• Recruiting, developing, rewarding, and retaining effective teachers and principals, especially where they are needed most
• Revitalizing the nation’s lowest-achieving schools.

Two phases have been completed thus far, and a third phase is currently in progress. Approximately $600 million was split between two states (Delaware and Tennessee) in the first phase, and more than $3 billion was divided among nine states and the District of Columbia in the second phase. Race to the Top also includes the Early Learning Challenge competition, which focuses on the early development and learning of young children. Applications for the Early Learning Challenge were due in October, and awards will likely be announced by the end of the year.

Since the RTTT fund is the most recent of education grants, GovWin has been closely following several top-dollar education technology opportunities. The state of New York, which received $700 million in funding, has many opportunities in various procurement stages. Two requests for proposals (RFPs) released this year – one for Technology Products and Solutions for Raising Public School Performance, and another for a principal evaluator learning system – are currently under review to determine a vendor award. However, the state still has several pre-RFP opportunities for RTTT initiatives, including projects for Early Warning and Electronic Record Exchange systems.

The state of Delaware, a first-round RTTT winner, awarded a contract to ESP Solutions Group for its Longitudinal Data System and Education Portal project. Additionally, the state of Ohio awarded a contract to Navigator Management Partner, LLC, for Data Tools Consolidation and Web Portals Analysis. GovWin continues to track phase II of this project for implementation. These are just a few of the winning states’ education technology opportunities. Be on the lookout for many more once the Early Learning Challenge awards are announced.

The Enhancing Education through Technology (EETT) grant’s purpose is to familiarize students with technology through the increased use of computers and technology in elementary and secondary schools. Additional goals include ensuring the technological literacy of students and implementing the use of technology in training and curriculum development. The program has awarded more than $2 billion to schools since its 2003 inception.

Title I grants provide funding for schools and local educational agencies (LEAs) with large numbers or percentages of students from low-income families. The funds are allocated to state educational agencies (SEAs) based on four formulas generated predominantly from census poverty estimates. The four formulas are basic grants, concentration grants, targeted grants, and education finance incentive grants. Since 2007, more than $70 billion in Title I grants have been awarded to numerous LEAs.

Analyst’s Take:

With the economy in such turmoil, grant funding is more important to states and schools now than ever. Grants can create a platform for schools to provide an array of opportunities for students that they may not have had otherwise. Because grant funding is so important, state and school officials should educate themselves on the eligibility requirements and application deadlines for any relevant grants. It is equally important for contractors to track grant funding, as the execution of many high-value opportunities relies solely on whether a state is awarded a grant or not. The best way for vendors to stay abreast of grant-funded education projects is to get involved in the grant process with prospective clients by assisting in the identification and winning of funds.

In the latest event concerning the troubled OMB A-76 program, House Armed Services Committee (HASC) Chairman Representatives Ike Skelton (D-MO) and House Readiness Subcommittee Chairman Solomon Ortiz (D-TX) recently sent letters to Defense Secretary Robert Gates and Office of Management and Budget (OMB) Director Peter Orszag, urging the Department of Defense to halt all pending A-76 competitive sourcing actions. They also asked that DoD officials refrain from initiating these competitions, thus providing both Congress and the Obama Administration with adequate time to comprehensively review the A-76 program. They note that although the A-76 process was initially intended to identify the most efficient provider of goods and services to the government, it has become "almost a mandate in recent years for pushing more and more work into the private sector, even work that is closely associated with inherently governmental functions, in order to meet arbitrary competition goals."

Skelton and Ortiz argue that their recommendations are consistent with the memorandum signed by President Obama on March 4, 2009, which, among other things, calls for administration officials to clearly define "inherently governmental functions" by September 30, 2009. A consensus on which functions need to be performed by government employees has remained the center of the A-76 debate for some time. A final determination, however, will affect the quantity and type of work available to contractors in the future. Skelton and Ortiz also criticized the strain on federal employees whose jobs are being competed, as well as private sector contractors who have expended time and resources bidding for the work, a result of the frequently long duration of A-76 processes. Furthermore, the letters also note that the FY09 Omnibus Appropriations Act, signed into law by President Obama on March 11, 2009, includes a government-wide moratorium on initiating or announcing any A-76 studies in FY09, but does not prevent ongoing competitions. Contrast this with the FY08 National Defense Authorization Act, which limited, but did not prohibit, these studies.

Yet this request may garner initial resistance within the Department, which, according to a March 2008 DoD memo, viewed competitive sourcing as "an essential management tool that achieves government efficiency and reduces operating cost of activities," under the Bush Administration. Despite criticism from opponents, President Bush was known for his embrace of competitive sourcing, while President Obama's approach has largely been defined in opposition to the previous administration. Obama's supporters include traditional, long-time opponents of competitive sourcing such as federal labor unions and Democrats, among others. In the short-term, industry can expect decreased business potential in areas previously subject to A-76 competition as officials continue their attempts to assess DoD's A-76 program and define inherently governmental functions.

Below is a sampling of A-76-related Opportunities within DoD to watch:

• A76 Study for Civil Engineering Public Works Services, Opportunity ID 40370
• A 76 Range Operations at Fort Benning, GA, Opportunity ID 50699
• OMB Circular A76 Support Services for Directorate of Public Works at Fort Jackson, SC, Opportunity ID 54872
• A 76 Study Directorate of Logistics and Directorate of Public Works Services at AP Hill, VA, Opportunity ID 46743
• A 76 Public Private Competition for Aerospace Ground Equipment Storage Maintenance and Transient Alert, Opportunity ID 43187

The much anticipated formal announcement appointing Vivek Kundra as the new Chief Information Officer of the U.S. Federal Government finally came today.  The announcement clarifies a couple things for those watching the industry:

·         With a different title than the position he replaces, it is clear that Mr. Kundra will carry additional responsibilities and authority, formal or informal, than his predecessors.

·         President Obama still intends to hire a Chief Technology Officer that will work in cooperation with Kundra, but the selection of that individual will have to wait a bit longer.

With no federal experience, but deep state and local government experience, what might federal IT leaders, vendors and government alike, expect from the new CIO?

·         A Deep Appreciation for the Relationship of Federal, State and Local IT Systems
The need to have a tighter integration and coordination among federal, state and local technology decisions and systems is long overdue. With his experience in leading technology organizations in the Commonwealth of Virginia and the District of Columbia, Vivek brings first-hand knowledge of and an appreciation for the needs of state and local governments and the extent to which federal decisions and systems can improve government technology as a whole.

·         Visionary in Web 2.0 and Transparency to Involve Stakeholders
One of the trademarks of his leadership in DC and Virginia government is the extent to which he leveraged Web 2.0 technologies, such as YouTube and Google Apps, and in involving citizens in decision making relative to IT investments.  In keeping with President Obama's commitment to transparency, IT leaders should expect a healthy appetite from Vivek in driving transparency and constituent involvement in government through Web 2.0 technologies.

·         New Title, New Responsibilities
The title that Vivek will hold is Federal Chief Information Officer.  This is a much more assertive and definitive title than the title of the position it replaced, which is Administrator of E-Government and Information Technology.  With the new title surely comes additional responsibilities and authority befitting such an audacious title.

·         Systems Integrators Beware
Vivek has a track record of kicking out integrators and canceling large IT projects in favor of cheaper alternatives, like software as a service and open source technologies. Expect a skeptical eye to be cast from the Office of Management and Budget on large, complex integration projects.

However, Vivek will face some significant challenges in the federal world that will be new to him.

• Agency Turf Battles
  Agencies in the federal sector have struggled under the burden of great scale and bureaucracy to move quickly and work cooperatively.  As a newbie to the federal bureaucracy, it will take him time and great political savvy to navigate the waters of the federal market.
• Large Scale, Complex Systems, Yet Still Under a Microscope
  The most unique aspect of federal IT is the tremendous scale and complexity of the systems that have been built that live under the microscope of the constituent groups that rely upon them.  It is a far greater challenge to make substantial changes to the types of systems operated by the federal government than it is to make changes to comparably smaller systems at the state or local government level.

Regardless, if there is one key element he brings to the federal IT community it is a tremendous enthusiasm and desire to make a difference through innovation.  Having heard Vivek speak at a number of GovWin events, I believe that enthusiasm will be contagious among other federal IT leaders, and at the end of the day, he will be a very successful federal CIO.

The much anticipated formal announcement appointing Vivek Kundra as the new Chief Information Officer of the U.S. Federal Government finally came today.  The announcement clarifies a couple things for those watching the industry:

·         With a different title than the position he replaces, it is clear that Mr. Kundra will carry additional responsibilities and authority, formal or informal, than his predecessors.

·         President Obama still intends to hire a Chief Technology Officer that will work in cooperation with Kundra, but the selection of that individual will have to wait a bit longer.

With no federal experience, but deep state and local government experience, what might federal IT leaders, vendors and government alike, expect from the new CIO?

·         A Deep Appreciation for the Relationship of Federal, State and Local IT Systems
The need to have a tighter integration and coordination among federal, state and local technology decisions and systems is long overdue. With his experience in leading technology organizations in the Commonwealth of Virginia and the District of Columbia, Vivek brings first-hand knowledge of and an appreciation for the needs of state and local governments and the extent to which federal decisions and systems can improve government technology as a whole.

·         Visionary in Web 2.0 and Transparency to Involve Stakeholders
One of the trademarks of his leadership in DC and Virginia government is the extent to which he leveraged Web 2.0 technologies, such as YouTube and Google Apps, and in involving citizens in decision making relative to IT investments.  In keeping with President Obama's commitment to transparency, IT leaders should expect a healthy appetite from Vivek in driving transparency and constituent involvement in government through Web 2.0 technologies.

·         New Title, New Responsibilities
The title that Vivek will hold is Federal Chief Information Officer.  This is a much more assertive and definitive title than the title of the position it replaced, which is Administrator of E-Government and Information Technology.  With the new title surely comes additional responsibilities and authority befitting such an audacious title.

·         Systems Integrators Beware
Vivek has a track record of kicking out integrators and canceling large IT projects in favor of cheaper alternatives, like software as a service and open source technologies. Expect a skeptical eye to be cast from the Office of Management and Budget on large, complex integration projects.

However, Vivek will face some significant challenges in the federal world that will be new to him.

• Agency Turf Battles
  Agencies in the federal sector have struggled under the burden of great scale and bureaucracy to move quickly and work cooperatively.  As a newbie to the federal bureaucracy, it will take him time and great political savvy to navigate the waters of the federal market.
• Large Scale, Complex Systems, Yet Still Under a Microscope
  The most unique aspect of federal IT is the tremendous scale and complexity of the systems that have been built that live under the microscope of the constituent groups that rely upon them.  It is a far greater challenge to make substantial changes to the types of systems operated by the federal government than it is to make changes to comparably smaller systems at the state or local government level.

Regardless, if there is one key element he brings to the federal IT community it is a tremendous enthusiasm and desire to make a difference through innovation.  Having heard Vivek speak at a number of GovWin events, I believe that enthusiasm will be contagious among other federal IT leaders, and at the end of the day, he will be a very successful federal CIO.

As of this morning, there is still no public comment on the Obama administration's plan to name a national Chief Technology Officer (CTO). So, as the stimulus legislation transitions from front page news story to funding for federal agencies, we decided to take a look at some of the potential reasons why we have not heard an update regarding the CTO.

Round Peg, Square Hole

Perhaps one reason the Obama administration has not been able to name a CTO is the administration is having trouble crafting the position. Finding a place either within an existing organization or as a new addition to the already crowded West Wing could be harder than anticipated. Considering the vast network of issues the CTO must touch on a regular basis – technology implementation, IT policy, HealthIT, GreenIT, cyber security and transparency/efficiency – there might not be an easy spot.

Thanks, but No Thanks

As some have hypothesized, potential candidates have not accepted the position because it does not have enough authority. Whether potential CTOs are looking for budget or policy authority (or both), there is no incumbent or mold for this position thus making it somewhat risky for seasoned professionals. It is likely the CTO will need to be an authority either within the executive branch or within the administration to be effective – policy, budget, advisory or a new version of one of the three.

We've Got This Covered

Perhaps there is no unique need for a CTO because Obama has fulfilled all necessary roles with other nominations, for example: OMB e-Gov Director Kundra, cyber security advisor (Melissa Hathaway), and other leadership roles, including Chief Performance Officer (CPO). In a related possibility, just as the CPO was merged with a leadership position at OMB, the administration could be planning to rework the CTO position into one or several other positions. If so, the CTO would best be distributed across the advisors and policy makers who oversee the IT budget(s), CIOs, government-wide performance issues, and someone who still could have a hand in implementation.

Time is Money

One obvious reason we have not seen a CTO nomination or clarification lately is there has not been enough time. Time is limited and the priorities associated with the economy, recession, stimulus package and nominations for key departments like Commerce and HHS have taken precedent. In fact, it is likely that many of Obama's timelines have been skewed due to the tour associated with the economic stimulus process, the reaction to TARP and unplanned obstacles with the aforementioned nominations.

It's Not You, It's Me

Let's be honest, it is possible that Obama has not found the right person. We can all assume that some vetting has taken place, perhaps even an offer for the role, but while reviewing all the options, we should address the fact that the appropriate person has not been chosen because the appropriate person has not been found. If Obama is sincere about reworking how government operates and understands the complexities of this role, it is also likely he's holding back until the best possible match can be found.

The Last Word

As long as we're going through all the options (even though we have not seen any evidence of this), it is also possible the administration could be rethinking the nomination of a CTO. With all the other priorities and issues to focus on, the administration is not ready to establish this position and define all its roles. So, perhaps we won't see a CTO and instead the administration has sped past this position to deal with national priorities.

On the other hand, this position cannot do everything for anyone. So finding someone who is capable of being well-versed in public and private processes and navigating both the contracting, policy and political issues on a national stage is unlikely. So, just as the administration is currently prioritizing economic issues dealing with those that require immediate attention, the future CTO will have to do that same thing once they take office and ultimately, that's the name of the game this year in Washington D.C.

While the country's eyes have been focused on the Stimulus Bill, just signed into law, another important milestone recently took place: Department of Defense (DoD) and Office of Management and Budget (OMB) officials agreed to a new FY2010 base budget request of $537 billion. According to a recent report from Inside Defense NewsStand, this figure is $10 billion higher than previously planned in order to incorporate more of the war's recurring costs into the base budget. This change was promoted by Defense Secretary Robert Gates and will be welcome on Capitol Hill, where lawmakers are frustrated that seven years of war spending have been appropriated as emergency expenses.

According to the Inside Defense NewsStand report, OMB began deliberations with DoD at $524 billion in discretionary spending, with another $2.9 billion for mandatory costs. The agreed-upon $537 billion figure also represents four percent growth from FY09, while also rejecting nearly $50 billion in additional FY10 spending that the Joint Chiefs of Staff attempted to add last year.

In addition, Secretary Robert Gates held his first meeting with Obama administration's appointed Pentagon leaders and top uniformed commanders in order to discuss the FY2010 request so that it corresponds with the Obama administration's policies and priorities. Known as the Defense Senior Leadership Conference, the group established eight issue groups in order to evaluate military weapons programs, part of Secretary Gates' plans for a "strategic reshaping" of existing weapons programs. Gates has long favored transitioning funds from conventional weapons systems to those more suited for the existing wars in Iraq and Afghanistan. The eight weapons groups under examination include:

• Tactical aircraft;
• Mobility;
• Shipbuilding;
• Network-centric capabilities;
• Rotary-wing aircraft;
• Missile defense;
• Irregular warfare; and,
• Nuclear technologies.

As previously speculated in this blog, DoD officials will use the results of these analyses to determine which programs can afford a few cuts or even be cut from the FY2010 budget altogether.

In the short term, the budget request for FY2010 is good news for defense contractors who have been preparing for the worst in tough economic times under a new administration. However, Secretary Gates himself told Congress in January that he believes the post-September 11, 2001 increase in Defense spending is coming to an end. Once the economy has stabilized and the administration turns its focus to the ever-growing deficit, cuts in Defense spending are likely to be at the top of everyone's lists.

The controversy over Daschle's nomination amongst a slew of other appointment problems has led some to question President Obama's credibility and promise to run a more ethical and responsible administration. As Daschle steps aside, Obama gets a second chance to follow-through on his campaign promises and select the next health care czar.

Tom Daschle, Obama's nominee for Health and Human Services (HHS) Secretary has withdrawn his nomination on account of his failure to pay $146,000 in back taxes. Daschle has been heavily criticized for owing $128,203 in back taxes and $11,964 in interest for the use of a private car and driver. He was also being examined about speaking fees he accepted from healthcare interests and advice he provided to health insurers and hospitals through his post-Senate work at a law firm.

Daschle was selected for appointment to two posts, HHS Secretary and the health care point person, neither of which he will serve. President Obama said in a statement this morning, "Tom Daschle asked me to withdraw his nomination, I accept this decision with sadness and regret."

The delay in confirming a new HHS Secretary could impact Obama's plans for speedy health care reform and lead to delays in potential HHS consulting projects to develop a policy framework. The timeliness of selecting a HHS leader is crucial to meeting the timeframe provisions of the proposed economic stimulus bill. The Department needs a leader to assist in administering the health care stimulus funds immediately, but without a leader there could be major set-backs in getting money where it is needed and subsequently delay the release of market opportunities for vendors. Also to consider is whether the next Secretary nominee will be a Republican or a Democrat and whether they will be an advocate for major health care reform and/or a champion of health IT? Health IT advancement is dependent upon government funding and progress could come to a stand-still if the new nominee does not share Obama's campaign ambitions. The new Secretary nominee will set the tone for how the Administration will seek to address major health care reform, as well as, the related contract opportunities that will enable vendors to engage in the process.

Now the question remains, who will take over the HHS Secretary post?

I've already written a bit about Obama's high level focus and Dr. Peter Orszag's confirmation hearing as the Director of the Office of Management and Budget (OMB). However, I didn't want a few other points to slip through the cracks while everyone is focused on the economic stimulus legislation. Of the three positions/panels I'd like to evaluate, only the Federal Chief Technology Officer (CTO) remains vacant. Obviously there are still nominations and hearings to take place before the entire administration is confirmed and in place. However, over the past week, we have witnessed the hearing for Secretary of Veterans Affairs (VA) with General Eric Shinseki and the creation of Obama's Technology, Innovation and Government Reform (TIGR) Team which will shed some light on the role of technology and information technology (IT) in the new administration. I'll try to use this information to inform a few comments about the federal CTO as well.

Shinseki to Modernize VA

The fact that a retired Army general will be heading VA is already making active and retired military personnel happy. As for the IT industry, the Secretary's two main goals are update VA's information technology network and move toward an electronic records system. He understands and respects veterans and their needs as well as his desire to create a proactive, "21st century organization." Since we know he'll have the support of the Obama administration when it comes to technology, e-records and efficiency implementation, it is likely that we can expect Shinseki to have a quick and significant impact in the department.

Technology, Innovation and Government Reform (TIGR) Team

The new TIGR team has two main focuses early on: innovation and transparency. The team's goal in innovation seems to be two-fold. Combine members with both public and private sector backgrounds to evaluate new ideas and technologies while allowing government programs to place effectiveness and efficiency above all else. The TIGR team also launched the "Citizens' Briefing Book" in an effort to allow citizens to submit proposals regarding government policies, programs, etc. According to GovTech, the TIGR team wants to improve who the new administration accepts and implements IT but also support innovations as they come along – mash-ups and cloud computing – to name a few. Lastly, an interesting note. One of the potential candidates for the Federal CTO position, Washington, DC CTO Vivek Kundra, is one of the members of Obama's TIGR team. It will be interesting to see if by early February he has double duty as the nation's first CTO.

The Federal CTO

The rumors and murmurs continued this week regarding Obama's choice for CTO. I think it's obvious that the economic climate and stimulus package have trumped many pieces of the President's early agenda. However, we are anticipating this nomination to be made public and at that point, we will have analysis regarding the impact to policy, budget and the technology community. In the meantime, the Obama administration has shown no signs of shying away from topics such as Health IT, technology implementation and innovative solutions. Whether this individual is from the public sector or a private company, it is unlikely they will be a technology newbie. On the other hand, many agree it's also unlikely this person will have much budget authority. Marcus Fedeli, Business Architect at NASA (and my former colleague here at GovWin), wrote on MeriTalk.com, "The notion that the new CTO will be a budget-controlling, tech-savvy administrator of technology across all agencies is unrealistic." He says, and I agree, this will be a much more collaborative position which is meant to pass technology and best practices between the agencies, work with the CIOs across the board and advise the administration on implementation costs and timeframes. As the CTO is announced and confirmed, technology and IT will be a part of almost every strategy across the federal agencies. So the new CTO will be able to be involved in things like the economic stimulus implementation, energy innovation, and Health IT before they even begin to look at Obama's agenda for the position (wireless/broadband priorities, open internet, IT security). The agenda is certainly big enough, so hopefully this delay in naming a CTO will allow the right person to be chosen with the correct level of impact and authority to help promote technology solutions across all federal agencies.

The strategy of the new Presidential administration's approach to military funding has been revealed, in part, by the funding that has been approved for the Department of Defense (DoD) in the recent House-passed stimulus bill. Green energy Research, Development, Test & Evaluation (RDT&E) programs and Operations & Maintenance (O&M) programs have been granted $350 million and $4.5 billion, respectively, to help stimulate sustainable military technologies, provide for baseline costs, and support organizational redesign efforts such as the Department of the Army Base Re-alignment and Closure (BRAC) initiatives. The Senate's version of the bill, which will likely be voted on the week of February 2, includes Defense-wide RDT&E funds and an allottment of O&M funds comparable to the House bill.

Although such funding will be received warmly, many offerors are wondering where the "meat" of the funding is for new and struggling technology programs. Support of such specified R&D funding becomes especially critical for satellite programs, many of which are experiencing greater and greater bandwidth usage and greater projected demand of such usage; these current and projected needs cannot, in many of the Services estimations, be adequately met with the current systems. However, new satellite technologies can rely heavily on such R&D funding. A good example of this struggle is the Advanced Extremely High Frequency (AEHF) satellite program, which is meant to replace the DoD's current Milstar system. According to a March 2008 GAO report (GAO-08-467SP), R&D funding for the project accounted for $1,078.9 million of the total funding amount of $1,172.9, or 92%.

So what strategies should offerors employ to win business when they help provide cutting-edge data communications solutions?

The first, and tactical, strategy is to aim at sustainment and replacement of existing satellite communications systems. One particular program to watch is the Communication and Transmission Systems program, or (CTS) (GovWin Opportunity ID: 45253). According to the Deputy Project Manager, Defense Communications and Army Systems (PM DCATS), Mr. Art Reiff, funding for this particular effort is a steady target. Mr. Art explained, "This [CTS] is not a mission requirement, but rather a purchase to meet the majority of the organization's needs." Therefore, he states, the program is "predominantly funded by OPA and OMA funding, very little from R&D." OPA (Other Procurement, Army) funding and OMA (Operations & Maintenance, Army) funding are separate from the traditional RDT&E category of funding, and maintain a somewhat steadier flow of resources. Adding to CTS' attractiveness for offerors is the fact that the procurement supports a wide variety of existing systems and has a projected funding ceiling of $30 billion on all of the awarded contracts. According to the PM, these will likely be awarded by FY10.

The second, strategic strategy is to prepare for those acquisitions which are absolutely essential to the mission of the warfighter. Falling in this category is the much-maligned Transformational Satellite Communications System (TSAT) acquisition (GovWin Opportunity ID: 53286). The program has, admittedly, been off to a rocky start: there are three sequential phases to launching the system, and although the first, the Mission Operations System (TMOS) is underway, the second phase of Development and Production (D&P) and third phase of Systems Engineering and Integration (SE&I) are on hold due a restructuring of the requirements strategy itself. Despite initial concerns that AEHF would be supplanted as a stopgap solution in the event of a TSAT acquisition collapse, military officials at the Air Force remain adamant that this requirement remains more critical than ever to replace the Wideband Gap Satellites (WGS) and to assist the warfighter in receiving reliable, protected data. In a January 17, 2009 Air Force Times article, Gary Payton, Deputy Undersecretary of the Air Force Space Programs, stated: "The uniformed warfighter is adamant about getting TSAT," he said. "I'm confident that commitment and support of TSAT will continue."

The Senate recently confirmed Dr. Peter Orszag to lead the Office of Management and Budget (OMB), so I took a look at his testimony to parse out some perspective on what to expect. Paging through the inauguration address and days of Senate testimony for the new administration can create a list mentality, it is easy for us to list the different areas mentioned which will affect our jobs or our community. Orszag's testimony was a bit different in that OMB's role and influence is interwoven in many different areas of program management, oversight, budgets and contracting. Pardon me if this sounds like a summary of the main points of his testimony, but I'm trying to pull out the valuable information while staying true to his actual comments.

OMB Version 2.0

Orszag identified his top priority as government performance; proposing an OMB Version 2.0 "where the two arms of the agency" – performance and budgeting become better integrated. As we've been pointing out, the Obama administration and many Congressional committees will be requiring a closer relationship between funding and results. As such, vendors who can provide their government counterparts with on-going metrics about a program's performances, results, and projected spending will have a much easier time supporting their work before administration and Congressional officials. Expect a greater focus on hitting incremental, measurable goals rather than waiting for a final product, report or solution to be delivered before program success is measured.

4 Topics Prior to Committee Questioning

In his opening statement, Orszag also identified the key areas his organization is likely to prioritize moving forward. These 4 are: procurement and contracting, human capital, information technology (IT), and financial management. I will quickly identify the key points in each area.

• Procurement and contracting – As the dollar value of federal contracts continues to increase (doubling in the last 8 years); the number of contract officers has remained relatively steady at 28,000. Orszag intends to improve the quality and quantity of the federal acquisition workforce. Secondly, OMB understands a need for technology to promote transparency in this area. Vendors can expect contracting officers to have quick turn-around timeframes for posting award information (and perhaps actually contract documents) to the web. A test run of this may be implemented around the economic stimulus spending, assuming it is approved. Later in response to a question he said, "It is absolutely OMB's responsibility to provide oversight and guidance on procurement issues."
• Human Capital – As alluded to previously in his testimony, Orszag sees a connection between improving performance and balancing the capacity of the federal workforce. An improved hiring process is likely to try to offset the retirement crisis over the next few years.
• Information Technology – According to Orszag, both the non-classified and intelligence community spend greater than $100 Billion on IT. As IT investments, these projects can provide much better transparency and interactive with the American public. "IT investments have not been well integrated into the budget process...and have often not been aligned with agency missions," said Orszag. Vendors should expect stronger management and auditing likely leading to greater oversight by all parties and an increased focus on cyber security in all IT projects.
• Financial Management – Lastly, Orszag identified problems with improper payments, the need for recovery auditing and an overhaul of real property management. OMB supports stronger incentives for enforcement and is looking to aggressively explore savings opportunities. Looks for some of these opportunities to be in the area of real property holdings. Vendors can look for opportunities around the selling or reconstitution of unused properties as well as the need for better real property and asset management.

Lieberman: OMB and the Proposed Stimulus Package

Senator Lieberman (I-CT) asked Dr. Orszag about oversight and management of both the remaining TARP funds and the proposed economic stimulus funding. According to Orszag, OMB is considered special oversight and auditing processes. For example, a web site created to contain information about the contracts, potentially including electronic copies of the contracts themselves. Secondly, "a special board – an oversight board" could be created composed of department inspectors general (IGs) and chaired by the Chief Performance Officer (CPO). This board would be in place for review and oversight of the web site and ultimately of the spending reports.

Collins: OMB and IT investment Oversight

Senator Collins (R-ME) asked Dr. Orszag about how OMB can better exercise oversight to get IT contracts back on track. Orszag proposed several steps from personnel to process solutions. One of the issues under evaluation is whether OMB needs a Chief Information Officer (CIO) or if the E-gov administrator is sufficient. Also, IT investments need to be better aligned with agency budgets (as we heard earlier). Orszag said the Exhibit 300s are sort of in a world of their own – agency by agency and not aligned with the non-IT part of the budget process. He would align IT and non-IT focusing on what's being accomplished overall. Lastly, he identified the need for greater oversight and auditing of performance throughout IT investments and many other areas as well in what he called "sustained focus".

Overall, Dr. Orszag supported much of what President Obama has been predicting regarding reporting, accountability and transparency in the budget and contracting processes. I'll say it again - vendors should expect a greater focus on performance and results. Also, any increase in oversight of contract spending could great more delays or headaches for contracting officials if it's not also coupled with efficiency reviews. I would expect there to be an adjustment period while many of these new cultural changes take place.