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GovWin Recon - April 17, 2015

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts. 

Sequestration / Budget:

 

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Big Data / Analytics:

Mobility:

Transparency and Performance:

Waste, Fraud and Abuse:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Legislation:

State and Local:

AEC News:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

Half-way Through FY 2015, How Much Are Agencies Spending on Contracts?

It’s April, and that means we are half way through fiscal year (FY) 2015. So I thought I would take a look at the available federal contracting data to see what can we tell so far about how much federal departments have spent on contracts at the mid-point in the year and see what might be in store for us in the second half of FY 2015.

For comparison and context I looked the federal contract obligations reported for each federal agency for FY 2014, quarter by quarter, and then the first two fiscal quarters of FY 2015, which just closed at the end of March. Then, to get what I thought would be a conservative approach to estimating what spending might look like for the remainder of FY 2015 I took 90% of each agency’s total FY 2014 contract spending and subtracted out what agencies have already reported for actual Q1 and Q2 contract spending. In other words, my assumption is that agencies would spend at least 90% of what they did last year. Finally, based on this 90% spending assumption I calculated each agency’s FY 2015 Q1 and Q2 relative percentages of total (90%) estimated obligations.

Contract Obligations Compared

Historically, the twenty top-spending departments accounted for about 98% of all federal contract obligations, so I focused my attention on these departments. In FY 2014, these accounted for $85.9B and $105.2B in total contract obligations for Q1 and Q2 respectively. For comparison, these departments reported $104.7B and $141.7B in contract obligations for Q3 and Q4 respectively for FY 2014. (See table below.)

In FY 2015, these top twenty have reported $89.3B and $34.1B for Q1 and Q2 respectively, although DoD lags in their financial reporting by up to 90 days so Q2 is understated. Still, if these top agencies spend 90% of what they did in all of FY 2014 they will have more than $270B left to obligate in the remaining two quarters of this fiscal year.


Observations

  • A handful of departments have Q1 FY 2015 obligations lower than they did in Q1 of FY 2014 (DoD, USAF, State, DoT, Ed, and Labor). Most have marginally higher obligations year-over-year, although Navy reported over $6B (+40%) more in obligations in Q1 in FY 2015 than last year.
  • More departments appear to be lagging in Q2 FY 2015 compared to Q2 of last year and some of these are fairly large relative proportions. For example, HHS shows a $1B (-24%) decrease in Q2. Similarly, VA has reported a $1.1B (-30%) decrease. Finally, State, GSA, and DOT each have reported about a 50% drop in Q2 FY 2015 obligations from Q2 FY 2014. Of course, given the DoD’s three-month reporting delay we will not know the contracting rates among those departments until this summer.
  • Taken together, the four defense branches in Q1 FY 2015 have reported $3B more in obligations than they reported in Q1 of FY 2014, although the DoD and Air Force have reported lower levels year-over-year.  

A graphical representation of the relative proportions of each department’s contract spending gives a sense of seasonality and/or changes from year to year. Due to the sheer number of departments I have split these into Defense and Civilian segments. This further highlights the yearly changes for Navy, HHS, VA, State, GSA, and DOT. (See charts below.)


 


 

This kind of macro-level analysis is useful in getting a general sense of quarterly and yearly patterns across the departments. Of course, the remaining FY 2015 obligation estimation depends on its main 90% assumption. Last year, this approach pointed to roughly $285B in combined FY 2014 Q3 and Q4 obligations among the top twenty departments. A year later, the final FY 2014 Q3 and Q4 data shows that actual obligations came in at $246.4B, so at first glance it appears that my 90% assumption was a bit optimistic. However, the difference turns out to be a matter of timing rather than magnitude. The final FY 2014 Q1 and Q2 obligations given above come in at $69B higher than what agencies reported at this time last year, reflecting revisions due to lagging obligation data being added later in the year. So the numbers effectively washed out once the dust settled. Unfortunately, there is no reliable way of predicting how consistently agencies will report their contract spending from year to year.

As most federal business development people will attest, understanding your agency’s spending patterns goes a long way to being able to successfully work with them to get contracts awarded as well as develop your yearly business plan. 

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

 

GovWin Recon - April 16, 2015

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Big Data / Analytics:

Mobility:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

State and Local:

AEC News:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

State infrastructure priorities: Where do states want to invest?

Deltek’s Industry Analysis team published its annual State of States report last month, which analyzes each governor’s state-of-the-state speech for key projects anticipated in the year to come. Thirty-three governors mentioned major architecture, engineering, and construction (AEC) projects in their addresses. Below is a list of several high-value AEC projects states are focusing on in 2015.  

Water/Energy projects – $13 billion estimated value

  • Alaska Governor Bill Walker (Independent) announced his administration will begin building the Alaska gas line to Tidewater, at an estimated cost of $10 billion.
  • California Governor Jerry Brown (D) announced his administration will invest in long-overdue water projects, saving $2.8 billion in the state's new rainy-day fund.
  • Montana Governor Steve Bullock (D) asked for support for his infrastructure plan, The Build Montana Act, which would invest more than $300 million into bridges, water and sewer systems, schools and roads.

Roads – $4.7 billion estimated value

  • Texas Governor Gregg Abbott (R) added more than $4 billion a year to the state’s budget to build more roads in Texas.
  • Indiana Governor Mike Pence (R) called for an additional $300 million in funding for roads to allow cities and towns new resources to plan regional growth strategies.
  • Nevada Governor Brian Sandoval (R) called for a $250 million investment in Project NEON to improve Southern Nevada’s I-15, reduce congestion, and create construction jobs.
  • New Mexico Governor Susana Martinez (R) proposed at least $180 million of infrastructure money over the next three years for major highway construction projects across New Mexico.

Building/School Revitalization - $1.8 billion estimated value

  • North Carolina Governor Pat McCrory (R) will submit to the General Assembly a $1.2-$1.4 billion bond proposal for Project Phoenix, to revitalize old buildings, build more efficient facilities, and spur economic development.
  • North Dakota Governor Jack Dalrymple (R) called for an additional $300 million for the school construction revolving loan program.
  • Tennessee Governor Bill Haslam (R) allocated $260 million in this year’s budget for capital projects including new science facilities at Jackson State Community College and the University of Tennessee, nearly $25 million for improvements to colleges of applied technology across the state, and funding for a fine arts classroom building at East Tennessee State University.

Transportation - $1.4 billion estimated value

  • North Carolina Governor Pat McCrory (R) announced he will request a transportation bond of $1.2 billion to allow quicker construction of projects in the 25-year vision plan.
  • New York Governor Andrew Cuomo announced a $65 million investment in ports and hubs from Albany to Oswego, to Syracuse, to the Port of Ogdensburg, to the Binghamton Rail Yard.
  • Governor Cuomo is also calling for $150 million for construction of vertical parking structures at strategic locations in Long Island and Westchester to assist commuters coming in on the Long Island Rail Road.

Continued budget growth sets the stage for ongoing investments and innovation as the governors look to allocate a collective $750 billion in FY 2015 general funds across a variety of spending areas. For access to the 2015 State of the States report, please click here.

State and local Industry Analysis provides an in-depth comprehensive perspective of the market. Our highly trained analysts provide answers to your critical questions about agency priorities, budgets allocated for your technology or service, trends and forecasts in state and local technology spending – enabling you to determine your strategy and tactics for capturing more business. For more information on State and local Industry Analysis, click here

 

GovWin Recon - April 15, 2015

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Health IT:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Legislation:

State and Local:

AEC News:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

CIOs Claim IT Reporting to OMB is Not Useful for Their Own IT Management

In a recent GAO study, CIOs claimed that required IT reporting to OMB was not useful to their own IT management.  OMB uses the information reported by CIOs with the goal of improving the management, oversight, and transparency of the federal government’s IT as a whole. But according to CIOs, reporting efforts on their part are burdensome and not helpful in improving IT management.  

OMB requires agencies to routinely report on IT management in five areas:  

  • IT strategic planning  
  • Capital planning and investment management 
  • IT security 
  • Systems acquisitions, development, and integration  
  • E-government initiatives

OMB directs agency CIOs to respond to 36 IT management reporting requirements within the five IT management areas.  Reporting frequency varies from monthly, quarterly, annually and “as needed” depending on the requirement, with most requiring quarterly or annual reporting.  

Agencies report and transmit the information regarding their IT initiatives via the following methods/systems:  

  • CyberScope – for 5 requirements  
  • Integrated Data Collection – for 7 requirements  
  • MAX Portal – for 3 requirements  
  • Federal IT Dashboard  - for 6 requirements  
  • Agency Websites – for 9 requirements  
  • Data Point – for 1 requirement  
  • DHS Continuous Monitoring Dashboard – for 1 requirement   
  • Federal Data Center Consolidation Initiative Program Management Portal – for 1 requirement       
  • Meetings with OMB Officials – for 2 requirements  
  • E-mail to OMB – for additional requirements as needed

CIOs reported that addressing the reporting requirements did not always clearly support departmental priorities and took a significant level of effort to implement.  Agencies reported spending approximately $150M to $308M annually to report to OMB, in part due to the frequency, formatting, duplicative elements and differing data collection systems in use. 

CIOs identified the following reporting as most useful in managing IT:  

  • Information Resources Management strategic plan  
  • Enterprise roadmap  
  • Exhibit 53  
  • IT investment performance updates

Although OMB has taken steps to streamline some IT reporting requirements, the efforts do not address additional challenges, such as the use of multiple online tools to report information. If OMB addressed the IT reporting issues identified by CIOs they could make the reporting effort and information gained a more useful tool for IT management at the agency level.  GAO recommends that OMB collaborate with CIOs to address proposed reporting improvements and challenges and ensure a common understanding of priority IT reforms.  

 

GovWin Recon - April 14, 2015

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Sequestration / Budget:

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Health IT:

Big Data / Analytics:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Legislation:

State and Local:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

Big Data Programs at the Defense Advanced Research Projects Agency

The Department of Defense is investing big in goods and services related to big data. This investment, however, is not spread evenly across the department. It exists instead in certain agencies where the spending is deep and related to a variety of other programs. One of these agencies is Defense Advanced Research Projects Agency, or DARPA, as it is commonly known. DARPA does research and assessments related to the applicability of cutting edge technologies to U.S. national security, including unmanned systems, robotics, cyber security, mobility, networking and computing technologies, and others.

Underlying the research and development work at DARPA are significant investments in advanced algorithms, analytics, and data fusion that illustrate the importance of “big data” to the efficient use of next generation systems and weapons platforms. Put differently, more and more of DoD’s weapons and communications systems, as well as the platforms that carry them, are becoming extremely complex. They are now so complex, in fact, that big data analytics and algorithms are necessary for them to function properly. Big data analytics and algorithms are thus a foundational technology without which an increasing number of advanced DoD weapons systems and platforms would not function.

Knowing this makes a big difference when it comes to understanding where business opportunity can be found at the DoD. Big data is such a complex subject, and its uses are so varied, that it is rare if an acquisition calls explicitly for a specific solution by name or the term “big data.” This makes selling big data solutions and services to defense customers tricky.

Getting back to DARPA, the fact is that big data is in use across the agency. It appears primarily in R&D work related to software development, algorithm design, and data fusion efforts. The two tables below identify programs that have big data requirements related to them. Table 1 lists DARPA programs in which big data goods or services are the primary requirement. Table 2 shows DARPA programs in which big data requirements are but one of many different pieces of work. These programs have been drawn from the DARPA Research, Development, Test, and Evaluation Budget Request for FY 2016.


As we can see in Table 1, spending rises from approximately $97 million in FY 2014, to the $164 million that DARPA forecasts in FY 2016. This represents a projected 69% increase over the course of three fiscal years.

Turning to the list of programs that includes both big data specific projects and those with a big data component (the gold lines in Table 2 below), we can see that the trend is the same – spending at DARPA on big data related R&D is on the rise. The increase is a more modest 21% from FY 2014 to FY 2016, but this is still a positive return in an overall declining DoD technology market.


Summing up, the DoD’s spending on big data, particularly on R&D, is rising. Because money is flowing to R&D efforts, the fact that the work is related to big data may be hidden in general project descriptions. The best thing to do when searching for big data related work is to seek out complexity. Where agencies like DARPA are conducting R&D work on complex systems, the integration of massive volumes of sensor data, the development of advanced algorithms for controlling unmanned systems, and/or fusing large data sets into common pictures, that is where you’ll find big data related spending.

 

State and Local AEC Snapshots: Baltimore County, Md.

You know Baltimore County’s capital project plan is big when the Maryland Stadium Authority is the agency administering the project. How big? More than $1 billion big.

In 2014, Baltimore County Executive Director Kevin Kamenetz unveiled an aggressive $1.1 billion school renovation plan. More than 80 percent of the county’s schools are more than 40 years old, and school populations are expected to grow, despite the county’s 0.7 percent population growth rate.

In fiscal year 2014, Baltimore County spent $97 million on construction within elementary and secondary education, and an additional $19 million within higher education. Elementary and secondary spending is up from $84 million in fiscal year 2011, and the numbers are expected to rise dramatically with the billion-dollar capital project plan coming to fruition. 

It is no secret that local governments tend to favor local vendors when it comes to AEC contracts, but this doesn’t mean that a company based outside of Maryland or Virginia has no chance of winning a piece of the $1 billion pie. Vendors should be aware that the Maryland Stadium Authority has publicly stated that it is “not restricting it [contracts] just to local firms,” but “part of the desire of the program is to maximize local participation.”

Another unknown result of the county’s massive education infrastructure overhaul is the effect it will have on surrounding counties or even neighboring states. Many counties and cities across the country have dilapidated schools in dire need of renovation or replacement, but lack funding to pay for the upgrades. Baltimore County brought the $158 million education bond to voters in November 2014. It was the largest voter-approved referendum in the county’s history. Additional localities may take a similar route to put more money toward education.

A quick glance at the county’s surrounding Baltimore area shows a similar picture. Howard County’s top construction expenditure in fiscal year 2014 was elementary and secondary education, at $71 million. Anne Arundel County spent nearly $131 million on elementary and secondary education construction, also its highest expenditure. While education and construction on education-related projects are typically top spending areas for counties, it is clear that education spending has taken even greater priority in Maryland.

You can learn more about state and local spending with GovWin IQ’s State Profiles and Local Snapshots. Not a subscriber, click here to gain access with a free trial. 

 

GovWin Recon - April, 13, 2015

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Federal IT

Agency News:

 

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

 

Health IT:
Mobility/Communications:

 

Defense / C4ISR / Embedded Technology:
Contracting / Acquisition:
Legislation/Policy:
State and Local:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

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