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Congress Passes FY 2015 Funding – Civilian Highlights, Part 1

The U.S. Congress passed an omnibus funding bill for the remainder of fiscal year (FY) 2015 that includes $1.1 trillion in total in discretionary federal funds, roughly half of which goes to federal civilian departments and agencies.

Federal News Radio reported that the Senate voted 56-40 late Saturday for the bill that will fund most agencies through September, the end of FY 2015. The House of Representatives had voted two days earlier on the spending measure, passing it 219-206.

The final bill removes concerns over the possibility of government shutdowns for the rest of the fiscal year and address funding for each of the agencies covered under the twelve individual appropriations bills that traditionally make their way through Congress. The only exception in full-year funding is the Department of Homeland Security, which is funded by at continuing resolution (CR) levels through Feb. 27, 2015, due to congressional concerns over White House immigration plans. Future funding will be taken up by the next Congress.


 

Department Highlights

Energy

Department of Energy funding of $27.9B supports programs across the department’s five primary mission areas: science, energy, environment, nuclear non-proliferation, and national security.

  • National Nuclear Security Administration (NNSA): Funding for NNSA sees an increase of $200M over FY 2014 levels to maintain the safety, security, and readiness of the nation’s nuclear weapons stockpile. This increase brings NNSA’s funding to $11.4B for FY 2015.
  • Funding includes $8.2B for weapons activities as well as $1.2B for naval reactors. Advanced simulation and computing efforts receive $598.0M, including $50.0M for activities related to the exascale initiative.
  • Energy Programs: Support for programs that encourage U.S. competitiveness drive an increase of $22M over FY 2014 enacted levels, bringing funding for Energy Programs at DOE to $10.2B.
  • Science Research: Funding for energy science research is maintained at FY 2014 levels, providing $5,071M to strengthen innovation and support basic energy research, development of high-performance computing systems, and exploration into next generation clean energy solutions.
  • Advanced Research Projects Agency-Energy (ARPA-E): The advanced research organization ARPA-E receives $280.0M, $45M below the level requested for FY 2015.

Commerce

Department of Commerce funding of $8.5B marks an increase of $286M above the level enacted for FY 2014.

  • Patent and Trademark Office (PTO): $3,458M for the U.S. Patents and Trademark Office, the full estimated amount of offsetting fee collection for FY 2015. The Patents and Trademark Office had nearly $651M in unobligated balances at the end of FY 2014.
  • National Institute of Standards and Technology (NIST): $675.5M for the scientific and technical core programs at the National Institute of Standards and Technology (NIST).
    • This amount includes $15M for the National Cybersecurity Center of Excellence and up to $60.7M for cybersecurity research and development.
    • National Initiative for Cybersecurity Education receives $4M. These funds also provide $16.5M for the National Strategy for Trusted Identities in Cyberspace (NSTIC), which includes up to $6M for the lab-to-market program and up to $2M for urban dome programs.
  • National Oceanic and Atmospheric Administration (NOAA): $5,441M for the National Oceanic and Atmospheric Administration (NOAA). This amount includes $3,333.4M for coastal, fisheries, marine, weather, satellite, and other programs.
  • Census Bureau: $1,088M for the Bureau of the Census, which includes $840M for periodic censuses and programs.
  • International Trade Administration: $472M in total program resources for the International Trade Administration. $10M of those funds are expected to be offset by fee collection, resulting in a direct appropriation of $462M.  Of those funds, up to $9M ins for the Interagency Trade and Enforcement Center, up to $10M is for SelectUSA, and Global Markets are funded at levels at least equal to FY 2014.

Go to Part 2 of Civilian Highlights, or check out our Defense Highlights of the FY 2015 Omnibus here.

Fellow GovWin Federal Industry Analysis (FIA) analysts Kyra Fussell, Angela Petty, and Alex Rossino contributed to this entry.

2020 Census Continues to Hit Planning Hurdles

The Department of Commerce’s Census Bureau has big plans for the upcoming decennial census, aiming to turn over a new leaf around costs and sustainability. Progress over the last year, however, shows the effort is encountering many of the same old problems.

Background

The constitutionally mandated decennial census conducted by the Census Bureau determines the allocation of billions of dollars in federal funds to states and realigns the boundaries for Congressional districts. Since 1970, the cost of enumerating households has climbed from around $16 to around $98 in 2010. During that same time period, the mail response rate dropped from 78 percent to 63 percent. The 2010 census was the costliest in U.S. history, weighing in at $13 billion. Throughout its strategic plans and program documents, the Department of Commerce continues to reiterate its commitment to conducting the 2020 Census at lower costs per housing unit than the 2010 Census. The Government Accountability Office (GAO) found issues with managing, planning, and implementing IT solutions for both the 2000 and 2010 enumerations. These issues contributed to acquisition problems and cost overruns.

Planning Progress and Missteps

In September 2013, the GAO released a progress report on efforts to contain enumeration costs. The Census Bureau launched a number of cost-saving, modernization initiatives in advance of the 2020 Census. These efforts targeted changes like establishing enterprise standards and tools for IT management and reducing duplicative investments. The GAO found that the Census Bureau had made progress towards long-term planning, but the roadmap for the 2020 census still lacked milestones for decision and cost estimates. The study also determined that while the Census Bureau identified some cost saving approaches, the new implementation of these practices for the 2020 census carries operational risk. The Census Bureau estimates that it could save up to $2 billion by using administrative records in 2020 to decrease the need for door-to-door visits. In particular, using the internet to include a self-response option stands to improve response rate and lower costs by reducing the number of households visited by field staff.

Later in 2013, the GAO reported that the Census Bureau was not producing reliable schedules for the 2020 Research and Testing program and the Geographic Support System Initiative. These two programs as the most relevant to constructing the master address file for the 2020 census. In both cases, activities were omitted from the schedule, which could potentially lead to unforeseen delays. While many activities were linked sequentially, the schedules lacked the preceding and following activities. Thus, the schedules were not producing accurate dates, which would interfere with determining whether the work is on schedule.

In the spring of 2014, a review of the 2020 Decennial Census program found that the Census Bureau had made progress in researching and testing IT options, but several of the supporting projects lacked schedules and plans. The absence of this scheduling data raises uncertainty about whether the projects will be completed in time to support operational design planning slated for September 2015. Four of the six IT research and development projects did not have finalized schedules. As for the two projects that did have completed schedules? They were not estimated to be completed until after the September 2015 design decision date. The same review found inconsistencies with the risk assessments and mitigation plans for the associated IT options.

By the summer of 2014, the Department of Commerce’s Inspector General released an assessment of the Census Bureau’s mandatory budget cuts. The review determined that cost information inaccuracies made it impossible to determine the impact of budget reductions. Further, the OIG found that internal practices increased the risk of incorrect or fraudulent charges. Four recommendations were issued for improvements, all centering on processes and procedures for the programs oversight. In addition to agreeing to the recommendations, the Census Bureaus acknowledged the “deficiency in the completeness” of its documentation around budget estimates and financial decisions.

This fall, the Census Bureau’s efforts to identify data sources for addressing and mapping requirements were examined. Once again, inconsistencies were found in the research and planning processes. These gaps included failing to document cost and quality information for executed decisions related to use address and mapping data from state, local governments, other agencies, and a commercial vendor. Additionally, management approval for the data source decisions failed to be documented, which would present accountability and transparency issues for future sourcing decisions.

Going Forward

Census has just completed the research and testing phase of the program, which ran from FY 2012 to FY 2014. The nest phase runs from FY 2015 to FY 2018 and will incorporate operational development and systems testing. FY 2015 activities are expected to focus on supporting research and testing infrastructure. Projects slated for this fiscal year include automation, workload management, Bring Your Own Device (BYOD) incremental development and research, enumeration system reuse, geographic program planning, IT security as well as a virtual office computing environment. In October, the Census Bureau released a request for information (RFI) as part of its market research into source for the Integrated Communications Program. Responses were due by the end of the month, and as of mid-October no decision on an acquisition strategy had be made yet. The mandated execution of this program and its expanding use of IT to execute the 2020 Decennial Census and to establish a sustainable model for future enumeration provide a number of elements for contractors to watch. In addition to the potential business opportunities associated with the census, the convergence of technologies like mobile computing, cloud environments, and data analytics will be a practical test of government technology adoption.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @FIAGovWin.

 

What Portion of Federal Civilian Information Security Spending Is Contractor Addressable?

With the inconsistencies in reported federal spending, it can be difficult to determine how much agencies are investing in different technology areas, like information security. That lack of visibility can make it even more challenging for contractors to determine the size of the addressable market. The reported data for top and mid-tier civilian agencies suggests around 80% of IT security funds could be in play for contractors.

 

Drawing on agency rankings from FIA’s previous information security market reports, we see that the top five civilian agencies along with mid-tier agencies account for the lion’s share of spending on IT security outside the Defense Department. According the FY13 FISMA report, these agencies comprised 87% of civilian cyber spending. While the FISMA figures give a sense of historic direct security spending, they do not reflect current addressable funding.

 

One approach to determining the current addressability of information security spending leverages the IT budget details that agencies report to the Office of Management and Budget (OMB). First the information security related categories within the Federal Enterprise Architecture (FEA) Business Reference Model (BRM) services are identified. These categories allow investment details to be filtered by determining primary and secondary service requirements. The results that meet the FEA BRM service criteria are reviewed for relevance to information security. This process yielded 208 IT investments reported for FY 2015. Then, the contractor addressable portion of spending for each of these investments is calculated. Finally, the figures for each of the investments are used to approximate averages for the spending per investment and for the contractor addressable portions.  

Key Findings

  • Contractor addressable information security at the top 10 civilian agencies amounts to nearly $3 billion.
  • On average, contractors vie for 81% of civilian IT investments that address information security.
  • Addressability varies across the civilian agencies and does not necessarily correspond to the highest levels of spending.
    • While the Energy Department appears to have the highest contractor addressability, it has the lowest average for funding per investment.
    • Not surprisingly, the Department of Homeland Security also has a high level of addressability and the funding per investment is significantly higher, indicating a high reliance on contracted goods and services.

There are some drawbacks worth acknowledging with this approach. Obviously, the calculations rely on the accuracy of agency reporting and consistently coding investments to FEA BRM service areas. This analysis also only takes public data into account, which omits any classified funding or details. Numerous investments include an unspecified portion of spending dedicated to security. In such cases, the whole amount has been included. Additionally, the funding level associated with each of the investments reflects the requested, not approved or actual, sum. Despite some of the limitations around the conclusions, the offer a decent starting point for sizing contracted spending on information security within the federal civilian government. 

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @FIAGovWin.

 

Energy Department Cloud Services Need Oversight

In September 2014, the Department of Energy's (DOE) Inspector General (IG) released findings from an audit of the cloud environments across DOE. The report highlighted several issues including problems with inventory management and implementation of security controls. These problems were linked to a more fundamental concern: DOE lacks a cloud strategy.

The DOE issues around cloud inventorying practices are reminiscent of challenges agencies encountered when taking stock of data centers and software applications. Lack of visibility and transparency raise difficulties around duplication of effort and ensuring return on investment for cloud services. DOE estimates that spending on independently acquired and managed cloud services are in excess of $30 million.

Reviews of eight contracts provided at six different locations determined that the contract did not properly or consistently address business and cybersecurity risks. The inconsistent implementation of security controls raises serious compliance issues with internal guidance as well as with the Federal Risk and Authorization Management Program (FedRAMP). The DOE cloud program audit found inconsistent and incomplete compliance with FedRAMP, which agencies were supposed to achieve by June 2014. More troublesome than having some programs in process of implementing requirement was the fact that DOE had erroneously reported to the Office of Management and Budget (OMB) that the majority of DOE cloud services met all FedRAMP requirements.

Departmental management concurred with the IG's recommendations, including the need to establish an enterprise approach to implementation of cloud computing and to ensure oversight of adoption efforts. The FY 2014-2018 DOE Information Resource Management (IRM) Strategic Plan replaces over 15 different strategic documents and efforts. One of the objectives outlined in the IRM document calls out a target for creating a network of the department's clouds, which may serve as a high level strategy. DOE plan to update its departmental cyber security program (DOE Order (O) 205.1B) to include clear requirements and guidance around oversight of cloud computing efforts. DOE is also in discussions with the FedRAMP program management office to evaluate DOE-specific FedRAMP requirements that would be included in the revision of DOE O 205.1 B. As for the issues around contracting inconsistencies, DOE expects to continue working on contracting guidance and standard clauses as well as leveraging work with the Federal CIO Council to identify and adopt best practices. All of the recommendations share the same estimated completion date of September 30, 2015.

DOE's IG attributes some of these issues to the lack of a comprehensive cloud strategy. For example, the inventory of cloud initiatives was incomplete. DOE reported only 44 ongoing initiatives to OMB. Review found, however, that DOE has at least 130 initiatives across 24 federal and contractor locations. An overarching strategy would have provided a foundation for coordination of efforts along with oversight and risk management.

It's fair to expect more reports on cloud implementation practices from other agencies to follow, since this DOE audit links back to a NASA audit and a government-wide review. In July 2013 NASA's IG published a report that found the agency lacked governance to support efficient cloud implementation. According to the DOE audit, "As a result of issues identified during [the NASA IG cloud program] audit, a Government-wide initiative was undertaken by the Council of Inspectors General for Integrity and Efficiency to provide insight to agency heads and lawmakers on how well the Federal government has adopted cloud computing technologies. In support of that effort, [the Energy Department] initiated this audit to determine whether the Department efficiently and effectively managed its cloud computing environment."

Historically, some agency reporting has fallen under other IT areas, like security. For example, USDA's audit of the department's information security included review of cloud services. Similar to the findings of the DOE audit, the USDAreport highlighted hurdles around contracting and managing risks. Another instance comes from the Department of Homeland Security (DHS).

More recently, however, reports have singled out cloud computing adoption as a focus. At the start of 2014, the Transportation Department announced it was auditing practices for acquiring and monitoring cloud services. In July of this year, the EPA released findings from its review of cloud technology adoption. Other agencies have announced or planned audits that are likely still in the works. Last December, for example, the Commerce Department announced that it had commenced an audit of cloud-computing environments. As part of the planned projects around cybersecurity, Department of Defense's IG audit plan for FY 2014 included evaluating the efficiency of their cloud migration strategy and efforts. With a number of reports still underway, it's too soon to fully assess how the government has fared in its adoption of cloud computing. So far, however, issues around governance, oversight and risk management appear to be thematic.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @FIAGovWin .

Collaboration Needed to Improve Health IT Security

The Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) and the Department of Commerce’s National Institute of Standards and Technology (NIST) hosted the seventh annual conference on Safeguarding Health Information on September 23 and 24, 2014. Exploring information assurance through the Health Insurance Portability and Accountability Act (HIPAA) Security Rule, the event covered topics including breach management, technical assurance of electronic health records, and integrating security into health IT.

The keynote address that kicked off the event was delivered by Darren Dworkin, the chief information officer and senior vice president for of enterprise information systems for Cedars-Sinai Health System. Dworkin described major security events that have shaped security architecture. For example, 2003’s Blaster RPC Worm led to better security patch management as well as improvements to antivirus deployment. More recently, Heartbleed resulted in enhancements to security scanning and inventory. Dworkin noted that hackers have not been the only threat. In fact, 35% of patient data breaches in 2013 were due to loss or theft of unencrypted laptops or other devices. The recent explosion of medical devices and mobile computing are further changing the landscape for health IT security. As new technologies change how data is accessed and shared, protecting health information becomes increasingly challenging.

Other speakers at the event stressed hurdles around risk assessments and promoting end-user awareness. One speaker from the HHS observed that it’s impossible to achieve effective risk management if organizations don’t know what their risks are. Another presentation (from industry) emphasized the importance of encrypting data at rest, in transit, or in process. One major takeaway from the event was the need for health care organizations to perform comprehensive security risk assessments. There’s no such thing as eliminating vulnerability or being “risk proof.” The key is managing risks, but first organizations need to know what those risks are. 

While speakers described a broad range of challenges and setbacks related to safeguarding healthcare information, the burden of progress must be shared by the whole community. As the Food and Drug Administration’s Suzanne Schwartz put it, "No one organization, no single government agency, no sole stakeholder, manufacturer, healthcare facility, provider, information security firm is going to be able to address and solve these issues on their own ." Schwartz’s comments echoes a recent blog entry from the White House Cybersecurity Coordinator, which stressed the need for collaboration between government and industry to strengthen the nation’s information security posture.

Vendors will find a number of opportunities to engage with government in the discussion around cybersecurity improvements. For example, NIST is accepting comments on its Framework for Improving Critical Infrastructure Cybersecurity until October 10, 2014. Later in October, the Food and Drug Administration will be holding a public workshop on adapting medical device cybersecurity. These discussions will help lay groundwork for partnerships, identify best practices, and may help shape requirements for future guidance.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @FIAGovWin. 

 

Federal Busy Season – Which Agencies are Ramping Up to Spend in September?

August is here and that puts us right at the mid-point of the fourth and final quarter of the fiscal year – the federal “busy season.” But that doesn’t mean that half of this business is already accounted for. In fact, historical spending trends suggest that things are just ramping up for its climax in September and several agencies will have billions of dollars to spend on IT before they face expiring funds.

Recently, I showed how federal agency spending trends in Q4 accounted for an average of 39% of agency contracted IT spending for the year, translating into an average of $30 billion in IT products and services contracted during the fourth quarter. Yet, the spending is even more concentrated than that. Upon further analysis, we can see that federal contract spending is disproportionately large in September, the final month of the fiscal year. Agencies obligate 18% of their total contract dollars across all goods and services and 23% of their yearly contracted information technology spending in September alone. That works out to nearly 60% of Q4 IT contract spending and means that about $17.3 billion in IT is likely to be contracted in the month of September.

Twenty five federal departments and agencies account for about 99% of this IT spending. So which of these biggest spending departments and agencies will have the largest percentage of their IT dollars likely to go out next month? See the chart below.


Twelve of the 25 highest spending departments – roughly half – will obligate 25% or more of their FY 2014 IT contract dollars in September, based on a 5-year average. State and AID will obligate more than a third!  The FY 2009-2013 average September contract spending for these 12 agencies is provided below.


Again, we are looking at an average of over $17 billion in IT spending at these agencies in September. Not all of these funds will necessarily expire at the end of the fiscal year, but the historical spending data averaged over the last five years still supports the trend that these agencies will spend at or near these levels, as it reflects some of the spending impacts of recent trends like shifting and tightening budgets, program delays, and sequestration.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @GovWinSlye.

Spending on GSA’s Email-as-a-Service BPA

In last week’s post we took a look at lackluster spending on the GSA’s Infrastructure-as-a-Service BPAs.  This week’s post provides some analysis of spending on the GSA’s sister vehicle to the IaaS BPA, the Email-as-a-Service (EaaS) BPA.  With a ceiling value of $2.5 billion, the EaaS BPA was awarded to 20 vendors at the end of August 2012.  Unlike its IaaS predecessor, the EaaS vehicle was established at a time when the federal cloud computing market had already begun taking shape.  Federal agencies had awarded cloud contracts worth hundreds of millions of dollars in fiscal 2011 and 2012 and the GSA sought to get in on the action.  Many agencies identified email as one of the simplest systems to move to the cloud and so the GSA put together a vehicle that would facilitate the expansion of cloud-based email across government.  The $2.5 billion ceiling of the vehicle offers an indication of how much work the GSA expected to flow through the EaaS BPA.

Despite the optimistic projections, use of the EaaS contracts was not forthcoming.  As the most recent data below shows, federal government customers have largely ignored the BPAs.
  • Commerce - $975K
  • Smithsonian Institution - $17K
  • Treasury - $13K
Impressive, eh?  Since their inception at the tail end of FY 2012, three federal agencies have obligated a grand total of $1 million on the contracts.  Arranged by vendor this spending works out as follows.
  • Unisys - $975K
  • Onix Networking - $30K
The obligations to Unisys are related to the installation and maintenance of a unified messaging system for the National Oceanic and Atmospheric Administration.  The obligations to Onix Networking are for the Smithsonian and Treasury cloud-based email projects.
 
How does spending on the GSA EaaS vehicles stack up against the overall adoption of cloud-based email/messaging systems across the federal government?  Regular readers may remember the chart from a June post entitled Cloud Trends: Feds Buy Communications and Collaboration Solutions which showed that since fiscal 2010, federal agencies have implemented 27 instances of cloud-based email/bundled communications.
 
What I didn’t provide in the June post is a dollar value for these implementations.  That total, based on awarded contract value, not obligations, is $2.8 billion.  Anyone see the irony in this figure?  The ceiling value of GSA’s EaaS BPAs is $2.5 billion and agencies have awarded contracts worth $2.8 billion.  It turns out the GSA wasn’t far off in its estimate of market demand.  The trouble for the GSA vehicle is that federal customers went elsewhere to procure the service.
 
Why they chose not to use the EaaS BPAs is a mystery.  In part, a lack of awareness of the vehicles is probably to blame.  The ubiquitous availability of cloud-based email via other procurement avenues is likely another factor contributing to the lack of use.  For example, since FY 2010 agencies have used GSA’s IT 70 schedule to award contracts for email/bundled communications solutions totaling $2.5 billion in value.  Contracts totaling an additional $200 million in value for these solutions have been competed and awarded on an unrestricted basis over that span of time.  For the EaaS BPA this total is $2 million.  Remember, this figure is contract award value, not obligations, explaining its difference from the $1 million mentioned above.  Even using awarded contact value as a measurement the conclusion is the same – very little money is flowing through the EaaS BPAs.
 
What this data tells me is that overworked and understaffed agency contracting shops use the easiest, most available avenue for procurement.  In this case that avenue is GSA’s Schedule IT 70.  Notice that full and open competitions are second in line.  Given the fact that almost every vendor has an IT 70 schedule, I see those competitions as roughly the same as unrestricted competitions.
 
In conclusion it is easy to see why no one uses the EaaS BPAs – they don’t provide advantages over other potential procurement options.  In competing and awarding BPAs for an emerging technology all the GSA did was attempt to split off work that is easily available on its standard schedule.  In doing so they cost vendors precious bid and proposal dollars that could have been put to better use elsewhere.  Finally, note that GSA is now proposing a new Special Item Number (SIN) to help agencies acquire cloud services on IT 70.  It seems the agency has also noted the use of its standard IT schedule in preference to its cloud specialty vehicles.

Federal Fourth Quarter FY 2014, Part 2 – $30B in IT Contracts Likely

The last two months of fiscal year (FY) 2014 are nearly upon us and that puts us on the cusp of the height of the 4th quarter (Q4) “federal IT busy season.” Even with several disruptions that have marked the first half of FY 2014, agencies do have budgets in place and are spending. If historical averages hold, several agencies will spend more than 50% of their FY 2014 contracted IT dollars in Q4.

Last week, I looked at potential total fourth quarter spending for the top 25 departments and agencies across all categories of contracted products and services, based on their reported historical contracted spending over the last several years. This week, I will focus on the Information Technology (IT) category in a similar fashion. (See last week’s entry for more detail on my approach.)

From FY 2009-2013 federal departments reported spending an average of 32% of their yearly contract dollars in the fourth quarter across all spending categories. However, the percentage of Q4 IT contract spending was 39% among the same departments for that period. Agencies tend to buy more of their IT in Q4 compared to other products and services, on average. Translating that into dollars, over the last five fiscal years federal agencies spent an average aggregate of nearly $30 billion on IT hardware, software, and services in Q4 alone. This is the case based on historical spending data, even in the era of sequestration and other budget constraints.

Which departments are the best targets for a firm’s Q4 IT capture efforts? Over the last five fiscal years the following 25 departments or agencies reported the largest overall contracted IT spending and make up 99% of the federal market. The chart below shows their average contracted IT spending in Q4 over the last five years.


Sixteen of the 25 top-spending departments will spend an average of 40% or more of their yearly contracted IT dollars in Q4 (and several more departments are not far behind in percentage points.) Those 16 departments account for an average of $20 billion in combined Q4 IT contracts from FY 2009-2013.

Three departments or agencies historically obligate more than half of their yearly IT contract dollars in the final fiscal quarter: AID (55%), State (56%) and HUD (70%).  Their 5-year average Q4 IT contracted spending is:

  • AID = $141.5 million
  • State = $690.5 million
  • HUD = $181.9 million

Not far behind, the departments that spend between 45% and 48% of their yearly IT contract dollars in Q4 – like HHS, DOJ, SSA, Energy, and DOI – tend to have even larger IT budgets. These five departments account for a combined average of $3.2 billion in Q4 IT contracts over the last 5 fiscal years.

Much of these contract dollars will flow to commodity IT products like software and peripherals, but significant dollars will also go toward IT services. Proposals that were submitted weeks or months ago may come back to the foreground for potential action and companies that can quickly turn around competitive quotes for their federal customers may have a chance at stealing business from incumbents. 

With FY 2014 getting a bit of a slow start due to delayed budgets and agency shutdowns, the rebounding we are seeing in the second half of the year may result in a record-breaking Q4. We will have to wait and see.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @GovWinSlye.

 

Federal Fourth Quarter FY 2014 – Who’s Got the Money?

It’s that time of year again in the federal contracting world – the final quarter of the fiscal year, i.e. the Q4 “busy season.” After a rocky start to FY 2014, marked by budget impasses, shutdowns, continuing resolutions and sequestration, contracted spending appears to be catching up and may be on track for a record fourth quarter. Some federal departments will spend more than 40% of their contract dollars in the next few weeks.  

Due to the topsy-turvy environment over the last few years taking a bit of a historical perspective on spending may help to get a sense of what is likely in store for this Q4. According to their FPDS reported contracted spending over the last seven years, federal departments spent an average of 43.4% of their yearly discretionary budgets with contractors. Applying that percentage to the enacted FY 2014 discretionary budget of $1.127 trillion means over $489 billion in contract spending would be spent in all of FY 2014. Further, from FY 2009-2013 federal departments reported spending about 32% of their yearly contract dollars in the fourth quarter. That means more than $156 billion of FY 2014 contracted spending is likely to be obligated in the last 12 weeks of the fiscal year. Given a slow start in Q1, the actual Q4 amount could be billions higher as agencies work to catch up.

So which departments and agencies are most likely to have big money to spend between now and the end of September?  Looking at total contract obligations over the last five fiscal years, the following 25 departments reported the largest overall contracted spending and make up 99% of the market. The chart below shows their average contracted spending in Q4.

Eight of the largest departments on average spend at least 40% of their contract dollars in the last fiscal quarter and the State Department averages nearly 60%. In average dollar amounts, the Army, Navy, Air Force and DoD will have the most to obligate. From the civilian side HHS, VA, DHS, Energy, and State will be the biggest Q4 spenders.

Contractors need to be well-prepared to meet the needs of their federal customers to effectively and efficiently get these contract needs met by being highly responsive and by providing compelling proposals and bids. The dollars will flow, but where they go may be still up for grabs.


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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @GovWinSlye.

 

NIST Kicks Off New Cloud Computing Efforts

The National Institute of Standards and Technology (NIST) Cloud Computing Program (NCCP) launched three new working groups at the end of June 2014, and all three groups are set to start work by mid July 2014.

Following the announcement from NIST on June 25, 2014, the Cloud Computing Program will expand the number of public working groups to address several new areas. One working group will target interoperability and portability. Another group will focus on cloud services. The third group will concentrate on frameworks for federated community clouds.

Interoperability and Portability - Two of the major challenges highlighted in the U.S. Government Cloud Computing Roadmap from 2011 were cloud interoperability and portability. The focus of this group will include exploring contexts where interoperability and portability are relevant in cloud computing.

Deliverables from the working group will include definitions of cloud computing interoperability and portability along with the relationship and interactions between them. The working group will also develop contexts where interoperability and portability are relevant to cloud computing (and the cloud computing reference architecture). The group will then leverage those definitions and contexts to establish common terminology and concepts for interoperability and portability, particularly where cloud services are concerned. The kick off meeting for the working group is scheduled for July 10, 2014 with the target date for completing the work in fall 2015.

Cloud Services – According to the announcement from NIST, “The new public working group will use the NIST Cloud Computing Reference Architecture to provide consistent categories of cloud services so buyers know what they are committing to before signing costly, long-term contracts.”  This focus addresses the fourth requirement from the Cloud Computing Roadmap. The activities of this working group will enable customers to understand the complexities of different types of cloud services so they can better evaluate and select products from vendors. On the provider side, clear guidance will be established for where interoperability and portability are required within similar categories of services.

The first deliverable from this working group is expected to be a NIST guidance paper. Priority actions include categorizing common types of cloud services according to the NIST Reference Architecture to offer government organizations a clear and consistent view of cloud services. Efforts for this working group are scheduled to kick off July 15, 2015 with a goal of completing the deliverables this fall (on or around October 2014).

Cloud Federated Community Cloud Frameworks – The fifth requirement of the U.S. Government Cloud Computing Technology Roadmap covers the Federated Community Clouds. According to the group’s charter statement,” the focus of Federated Community clouds is to develop a framework to support seamless implementations of disparate community cloud environments. The future of cloud computing is where both internal and external cloud resources from multiple providers are deployed and managed in order to meet business needs.”

Deliverables from this working group include a common definition for “Federated Cloud,” as well as requirements analysis. The working group will be responsible for collecting use cases that support the need for a federated cloud and generating a list of needed technologies and standards. These efforts will also chart a development path for the federated cloud and identify key stakeholders.  The kick off meeting for this group is set for July 10, 2015 with the target date for completing this work in fall 2015.

These three new groups continue to build on the initial set of five public working groups, which included cloud computing reference architecture and taxonomy, security, standards roadmap, target business use cases, and standards acceleration to jumpstart the adoption of cloud computing (SAJACC). As the NCCP’s mission describes, “The long term goal is to provide thought leadership and guidance around the cloud computing paradigm to catalyze its use within industry and government. NIST aims to shorten the adoption cycle, which will enable near-term cost savings and increased ability to quickly create and deploy enterprise applications. NIST aims to foster cloud computing systems and practices that support interoperability, portability, and security requirements that are appropriate and achievable for important usage scenarios.” Additional information on participating in these efforts is available through the updated NCCP announcement site.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @FIAGovWin.

 

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