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NASA Seeks Industry Guidance on Data Center Solutions

Mid July 2014, The National Aeronautics and Space Administration's Goddard released a request for information on data center consolidation strategies for near-term, interim, and long-term strategies to address federal mandates for reducing IT footprint and improving energy efficiency.

Although federal agencies they've continued monitoring progress, agencies have not publicly released any recent updates to their data center consolidation plans. As part of the Federal Data Center Consolidation Initiative (FDCCI), NASA initially reported 79 data centers, closed 14 centers and revised the count to 58 after a physical inventory. The target is to retain 22, and at the end of 2014, NASA is expected to have 16 data centers to close before reaching its goal.

Along with the request for information around the Data Efficiency and Containerization effort, NASA GSFC released details regarding the several approaches under consideration. The first approach targets retrofitting technologies and solutions with a high return on investment (ROI) as short term and interim measures. A number of technologies to address cooling, power, and software management are under consideration. Approaches for cooling include rear door heat exchanger, direct liquid cooling, and application of water-side economizers. For power, NASA is looking at transformer-free uninterruptible power supply (UPS), power distribution units (PDU) that convert power from AC to DC, and fuel cells. Management software technologies being explored include remote power monitoring, power management based on the impact on energy consumption, and server utilization management. The potential for heat reuse applications is also on the table for deliberation. The second approach for data center consolidation targets standalone, containerized solutions for two possible use cases. One use case involves a management information systems computing scenario with power requirement up to 10 kW per rack. The other user case scenario involves high power computing with power requirements up to 30 kW per rack. The third approach aims to establish a long term strategic data center plan leveraging containerized data center solutions with a high return on investment. All of the approach must meet compliance requirements for Federal Data Center Consolidation and Green mandates.

Beyond the efforts at Goddard, NASA's consolidation of Agency and Center-specific data centers will continue through efforts to simplify IT architecture by reducing duplication within the IT footprint. Some of the savings expected to result from these efficiencies will be reinvested to support mission programs and projects. NASA intends to reinvest a portion of these savings to fund critical IT innovations in order to drive further efficiencies and cost savings. Candidate investments to drive efficiencies include standardization of mobile and collaboration capabilities, continued consolidation of IT security tools and computing services, and shifting web services to a cloud platform. Analytics will be one significant area that will benefit from data center improvements. NASA's vision for big data includes improving the capability to extract value and insight from the data it already has. To this end, NASA may explore the potential for creating a new, virtual mission to examine the data it possesses. With the vast volume and variety of data on its systems, NASA will need to overcome storage and accessibility challenges to ensure timely availability of information.

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

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.

 

Past Performance a Prediction of Future Demand for SEWP?

The current iteration of the National Aeronautics and Space Administration’s (NASA) government-wide acquisition contract (GWAC) for information technology products and product-based services is set to expire at the end of October 2014. The Solutions for Enterprise-Wide Procurement (SEWP) program office is currently evaluating proposals received for SEWP V, the follow-on to the existing procurement.

As SEWP IV moves toward its expiration, spending through the vehicle has continued to increase over the past three fiscal years after a dip in 2010. Throughout the life of the contract, various agencies have issued guidance on buying through SEWP, including the Department of Defense, Veteran’s Affairs, Department of the Interior, and NASA. Based on total spending to date, the agencies with the most spending through SEWP IV are as follows: Veteran’s Affairs (25.93%), Defense Department (13.66%), Department of Justice (9.84%), Air Force (6.16%), Navy (6.34%), and NASA (4.55%).


The SEWP contract vehicle will be getting bigger in this next chapter, as both the ceiling value and duration increases. Solutions are also adapting to new technologies and concerns, like cloud computing and supply chain risk management.  In recent years, agencies have leveraged SEWP IV as a vehicle for buying cloud infrastructure. Moving forward, SEWP V will include cloud computing offering, which fall under the “breadth and depth offerings that can be proposed as available components” by vendors in all Groups.

 

As it’s grown over the years, SEWP has found itself in new role. The program office grew from 15 to 50 people and it’s gotten a higher profile as agencies look to optimize acquisition strategies. Data collection efforts in SEWP V are expected to drive strategic sourcing through analysis of agency buying habits. In a more overt strategic sourcing effort, the SEWP program office was appointed by the Office of Management and Budget (OMB) to lead an effort to streamline and improve agency options for buying laptops, desktops, and other end user devices. In a request for information posted May 20, 2014, industry is asked to field questions about extended warranties, technology refreshment, reporting requirements, and pricing among other topics. (Responses to the RFI are due June 6, 2014.)

The program office anticipates announcing the award for SEWP V on or about mid-August 2014, but vendors can still participate in SEWP V even if they did not submit a proposal. Following the announcement, vendors will have the opportunity to add their products or product services as part of the awarded contracts. Historically, vendors not priming SEWP might find larger contract holders keen to partner as a way of gaining a competitive advantage through innovation, teaming, or socio-economic standing. However, the addition of supply chain security concerns in the next iteration of the contract is likely to make contract holders more cautious about their partnering arrangements. With a ceiling value of $20 billion, the next version of the SEWP contract stands to offer plenty of business opportunities.

Updates and additional information about the opportunity may be found in the GovWin opportunity database (opportunity ID: 82396) as well as through NASA’s SEWP program office.

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

 

Open Data Action Plan Poses IT Investment Challenges

Government information systems create, manage, and store a wealth of information that has yet to be fully utilized. The push to treat information as an asset is fuelled by the potential to increase government efficiency, improve accountability, and drive economic growth through innovation and scientific discovery. As progress continues toward making government data publicly available and useable, agency technology spending must straddle various and sometimes incompatible objectives.

In May 2013, the administration issued an executive order establishing open and machine-readable data as the default for government information. On the first anniversary of that step, the White House published its Open Data Action Plan. The document outlines new commitments and builds on the efforts established through the Open Data Charter.

The five strategic principles of the Open Data Charter, released mid June 2013, include achieving open data as a default expectation, maintaining quality and quantity of data releases, providing the data in a range of useable formats, improving governance by cultivating expertise around data collection, standards, and publishing; and cultivating innovation through empowering users. Continuing in this vein, the Open Data Action Plan describes four commitments around publishing data, prioritizing data releases, supporting innovators, and improving data.

Working toward making open data the default for government information, progress has been made both at a strategic level around policy and administrative initiatives as well as at the federal agency level. For example, the new action plan notes that, “All executive branch agencies are now required to develop a machine-readable catalog of their public data at [department].gov/data.json, such as www.treasury.gov/data.json, allowing simple software tools to automatically get updated information about the latest data available and have access to the same information that Data.gov collects and publishes.”

The requirements for cataloging and providing access to data will shape efforts in parallel to agency initiatives around modernization and consolidation. The technology transformation underway (e.g. adoption of shared services, mobile technologies, and cloud computing) offers an opportunity to incorporate necessary adjustments to make data available at the same time. As agencies pursue work to refresh technology and improve efficiency, they will also need to be aware of the information being handled by their systems. While some data sets pose no issue for public release, security and privacy concerns present hurdles for others. Some agencies face additional challenges around making information available externally without compromising the internal performance of work by federal users. 

The goal of releasing and enhancing high-priority data sets will engage the support of Presidential Innovation Fellows. Projects that will be led by Presidential Innovation Fellows include work at the Departments of Commerce, the Interior, Labor, and Energy, the National Aeronautics and Space Administration, and the Internal Revenue Service. These efforts, along with other examples highlighted in the plan, will serve as test cases for agencies to demonstrate the successful adoption of best practices and the value of the technology investments made along the way to the achievement.

These days, government agencies are aiming to stretch their technology spending, looking to improve both their efficiency and effectiveness. At the same time, increased oversight continues to drive greater accountability and drives reporting requirements. Together, this creates a push to be selective and prioritize funding. While the goal of default open data is clear, there’s a lot to be done to reach that target. The forty-some data sets selected as examples of expansions, enhancement, and releases in the action plan illustrate the work that lies ahead for agencies.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

 

 

OMB Reports $10.3 Billion on Cybersecurity in FY 2013

While no area of federal IT spending is “off the table” when it comes to scrutiny for efficiency, economy and return on investment, agency spending on information security continues to be an area for focused spending. The latest report out of the Office of Management and Budget (OMB) on Federal Information Security Management Act (FISMA) efforts shows that agencies spent $10.3 billion in FY 2013.

The latest FY 2013 FISMA report to Congress provides OMB’s FY 2013 assessment on what agencies have achieved in FISMA-related information security in the previous fiscal year.  Last week, I looked at the number of reported federal cybersecurity incidents and noticed that they were up 25% in FY 2013 across a broad range of categories from policy violations to malware. This week, I’ll look at the spending data reported by OMB within the FISMA report.

OMB requires executive branch agencies to report information security spending data on an annual basis. For FY 2013, agencies reported spending information in the following three areas:

  • Prevent Malicious Cyber Activity – monitoring government systems and networks and protecting the data within from both external and internal threats. Such categories include trusted internet connection (TICs); intrusion prevention systems; user identity management and authentication; supply chain monitoring; network and data protection; counterintelligence; and insider threat mitigation activities.

  • Detect, Analyze, and Mitigate Intrusions – systems and processes used to detect security incidents, analyze the threat, and attempt to mitigate possible vulnerabilities. These categories include Computer Emergency Readiness Teams (CERTs); federal incident response centers; cyber threat analysis; law enforcement; cyber continuity of operations (COOP); incident response and remediation; forensics and damage assessment; continuous monitoring and IT security tools; and annual FISMA testing.

  • Shaping the Cybersecurity Environment – improve the efficacy of current and future information security efforts, including building a strong information security workforce and supporting broader IT security efforts. These categories include the National Strategy for Trusted Identities in Cyberspace (NSTIC); workforce development; employee security training; Standards development and propagation; international cooperation activities; and information security and assurance research and development.

The federal cybersecurity spend in the classified areas of the civilian and defense segments are not reported, but OMB provided the reported spending for the executive departments and agencies by the three categories above. I have put the data into a chart for ease of comparison, but separated out DoD with its reported $17.1 billion in spending due to scale.


Together, the civilian departments and agencies account for just over 31% of the total federal spend last fiscal year and the top twelve civilian organizations account for 29%. DHS’s reported $1.1 billion in spending accounts for just 11% of the overall $10.3 billion in spending, but DHS represents nearly 35% of the overall civilian agency spending in FY 2013. DHS spent 33% of its dollars in the Prevent Malicious Cyber Activity category, an aspect that it shares only with Treasury and Energy among the largest departments.


 

The $17.1 billing in Defense Department spending accounts for nearly 70% of the total reported $10.3 billion in cybersecurity spending in FY 2013. Half of the DoD spend is in the area of shaping the environment, which sets it apart from the ratios of most civilian agencies with the exception of the National Science Foundation (NSF) above. Another contrast is that the DoD spent just 15% of its FY 2013 dollars in the Detect, Analyze, and Mitigate category where many civilian agencies often spend the most.

Each year the information that OMB includes and highlights in the FISMA report varies, sometimes widely. The inclusion of spending data by the above three categories is different from the cost categories included in previous FISMA reports (e.g. personnel costs, etc., which OMB did not include this year.)

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

IT Contracting Half-way Through FY 2014 – Civilian is Chugging, but Can DoD Catch Up?

A year ago at this time, if you will recall, we were watching and waiting to see if federal agencies would have FY 2013 appropriations made and budgets approved or whether they would face full-year continuing resolution-level spending and sequestration. What a difference a year makes, with FY 2014 budgets passed months ago. So how are agencies doing at getting their information technology (IT) contract dollars obligated at the mid-point and what might we expect in the second half of FY 2014? Let’s take a look.

Last week, I looked at the total market contract obligations at the mid-fiscal-year point. This week I’ll look specifically at IT obligations. In this, and other similar scenarios that I have explored, I took a rough “back of envelope” approach to projecting potential contract obligation rates for the remaining two fiscal quarters. For consistency, I will use the same baseline: If agencies obligate at least 90% of what they did in FY 2013, what might that project for spending on contracts in the second half of this fiscal year.

In the latest federal FY 2015 IT budget request, OMB reported the total enacted FY 2014 IT budget to be about $75 billion, which is $2.5 billion (3.5%) more than agencies spent in FY 2013.  So this 90% threshold that I am using for potential FY 2014 spending, while not a perfect comparison, might be conservative. We’ll just have to see.

Contract Obligations Compared

For IT, these twenty top-spending departments account for $16.2 billion in combined Q1 and Q2 obligations for FY 2014 so far, although DoD’s reporting lag will most certainly increase that amount. If they spend 90% of what they did in FY 2013 they will have $43.2 billion left to obligate in the remaining two quarters of this fiscal year. (See table below.) Under that assumption, the remaining federal departments and agencies would account for roughly $1.1 billion for Q3 and Q4, reaching the overall $44.4 billion mark for the second half of the year.

Observations

  • The civilian agencies in the top twenty have reported yearly obligations of $9.4 billion, $8.9 billion, and $9.5 billion for FY 2012, 2013 and 2014 respectively. So for FY 2014 these civilian departments are currently running on par with FY 2012.

  • The defense branches have reported yearly obligations of $18.4 billion, $16.2 billion and $6.7 billion for FY 2012, 2013, and 2014 respectively. Granted, the FY 2014 Q1-Q2 data is incomplete due to DoD’s reporting lag, which could take up to 90 days to settle out. So the question then is whether we will see another $10 billion in obligations post to the defense branches in the coming days to put them on par with last fiscal year or whether we will see the softening that’s apparent from FY 2012 to FY 2013.

  • Outside of DoD, there is not that much variance year-over-year. Most departments are within $100 million of what they spend in Q1-Q2 of last year. The SSA, USDA, and VA have posted increases of $200 million in obligations over this time in FY 2013.

What we may be seeing in the data so far – at least with the civilian organizations – is that they are enjoying the benefits of having budgets in place relatively early in the fiscal year, compared to dealing with CRs and late-breaking omnibus spending measures. There’s no surprise there. The real story in the data may be what is happening in the defense sector – that draw-downs, realignments, and program delays appear to be having noticeable impacts on their IT contracting run rates. Only time will tell if they will make up the difference in the second half of the year.

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

A Possible Contracted Spending Scenario for the Rest of FY 2014

Can you believe that we are half way through fiscal year 2014? Let’s take a look at the 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 2014.

When I looked at the mid-fiscal-year spending rates last year, I proposed what I felt was reasonable approach to projecting potential contract obligation rates for the remaining two fiscal quarters. This year I again set a baseline that in FY 2014 agencies will obligate at least 90% of what they did in FY 2013 to drive my general projections for what they might spend on contracts in the second half of the fiscal year. See my previous blog for a more detailed explanation of my approach.

Contract Obligations Compared

The twenty top-spending departments account for $122.4B in combined Q1 and Q2 obligations for FY 2014. If they spend 90% of what they did in FY 2013 they will have $285.5B left to obligate in the remaining two quarters of this fiscal year. (See table below.) Under that assumption, the remaining federal departments and agencies would account for roughly $4.5B for Q3 and Q4, reaching the overall $290B mark for the second half of the year.


Observations

  • Only a few departments have a FY 2014 Q1 and Q2 obligation rate lower than they did in FY 2013, suggesting that their obligation rates may be higher than last year at this time, depending on total final obligations.

  • At this point in FY 2013, each defense branch had reported at least $3 billion more in obligations than they have reported for FY 2014, even under sequestration.
    • Navy has reported $15.2B for FY 2014, compared to $25.3B at this point in FY 2013
    • Army has reported $12.4B for FY 2014 18B, down from $17.8B for FY 2013
    • Defense Agencies have reported $16.6B for FY 2014, compared to $19.1B for FY 2013
    • Air Force has reported $14.1B, compared to $17.3B for FY 2013.

  • Seven of the twenty departments above saw drops of 5% or more from FY 2012 to FY 2013, five of which are civilian agencies, i.e. Energy, NASA, DHS, Justice, and Education. But without exception each of these departments has reported increases in the first two quarters of FY 2014 compared to FY 2013. Energy, NASA, and Education each show increases of 15 percentage points or greater.

  • Energy’s yearly cyclicality continues. During Q1 and Q2 the DoE tends to obligate roughly 45% and 75% alternately from year to year. Looking back at FY 2011 reveals that they spent $11.1B in the first two quarters, which accounted for 45% of their $25.1B total FY 2011 obligations.

  • NASA also reveals cyclicality in its contracting. In FY 2011 NASA reported $6.4B in combined Q1 and Q2 obligations accounting for 41% of their $15.4B total obligations for that year. Looking at the chart above we can see an oscillation in NASA’s obligations since then with $7.8B reported so far in FY 2014. Depending on whether my 90% assumption is pessimistic regarding their final spending will determine whether they have between 40-50% of their budget yet to obligate this fiscal year.

Implications

Some of the year-to-year changes shown above may be due to the appropriations levels and funding priorities that these departments received under the FY 2014 Omnibus funding bill passed earlier this year. However, what these changes more likely indicate is the impact of agencies having actual budgets earlier in the fiscal year, compared to having full-year continuing resolutions that freeze priorities and limit flexibility.

How useful or accurate this kind of macro-level estimation is depends in large part on its main assumptions. Last year this approach pointed to roughly $300 billion in potential combined FY 2013 Q3 and Q4 obligations. The final data shows that actual obligations came in at $265 billion, so my 90% assumption was optimistic in the age of uncertainty, sequestration, and year-long continuing resolutions. Actual combined Q1-Q2 obligations among the top twenty departments declined from $237.1 billion in FY 2012 to $194.0 billion in FY 2013, an 18% drop.

So far in FY 2014, these same departments have reported combined Q1 and Q2 obligations of $122.5 billion, BUT the four largest spenders – the defense branches – have not fully reported their Q2 data. Looking at the civilian departments only give us $65.7 billion, $57.6 billion, and $64.2 billion for FYs 2012, 2013, and 2014 respectively, so FY 2014 is running only 2% below FY 2012 levels and is nearly 12% ahead of FY 2013.  We’ll just have to wait and see what comes from DoD.

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

Congress Set to Pass FY 2014 Funding – Would Avert Shutdown, Mute Sequestration

The U.S. Congress is expected to pass an omnibus funding bill for the remainder of fiscal year (FY) 2014 that includes $1 trillion in discretionary federal funds.

The Hill reported that H.R. 3547 passed the House and is now moving onto the Senate. The bill is a compromise measure in keeping with the budget agreement the two parties reached late in 2013. As such, the bill is set to increase total discretionary spending to $1.102 trillion in FY 2014, an increase over the $986 billion that was originally planned.

If the final bill passes the Senate and is signed by the President, as is expected at the time of this writing, another looming government shutdown will have been averted. Further, departments and agencies that have been coping with the limitations imposed under the “same stuff, different day” scenario that accompanies continuing resolutions (CR) will have real appropriations with operating budgets and more program flexibility, even if their budgets don’t necessarily grow.

Year-over-Year Changes

The pending omnibus would, in one sweeping appropriations, address funding for each of the agencies covered under the twelve individual appropriations bills that traditionally make their way through Congress.  Barring any unexpected changes in either chamber, a summary of the appropriation’s impact on departmental budgets is presented in the table below and following descriptions.

Department of Defense

Total FY 2014 funding is set at $572B and includes $487B in base budget and $85B for OCO.

  • Military Personnel (MILPERS) - $129B, up $1.3B from FY 2013. Includes 1% pay raise for armed forces and civilian workforce, the first civilian raise in 4 years.
  • O&M - $160B, down $13.6B from FY 2013. Priority on essential readiness programs, including $447M for CYBERCOM
  • Procurement - $92.9B, down $7.5B from FY 2013 enacted level.
  • RDT&E - $63B, $6.9B below FY 2013
  • Military Construction (MILCON) - $9.8B, a decrease of $817M from FY 2013
  • These budget categories (MILPERS, etc.) are split and aggregate across the four defense areas as follows:
    • Air Force - $133B, Army - $117B, Navy/Marine Corps - $144B, Defense-wide - $57B
  • Identifiable OCO spending breaks out as follows:
    • Air Force - $16.5B, Army - $40B, Navy/Marine Corps - $14B, Defense-wide - $7.4B
  • Includes a 1% pay raise to members of the Armed Forces and the Department of Defense civilian workforce. This is the first pay raise for Department of Defense civilians in four years.
  • Supports readiness with O&M funding that is $11B higher than under a full-year CR.
  • Provides $1B billion for the National Guard and Reserve Equipment Account to ensure Guard and Reserve units have the critical equipment necessary for both homeland security and overseas missions.
  • Includes $2.4B to continue operation and begin modernization of nine Navy ships which had been proposed for retirement due to budget constraints
  • Adds $175M for the Rapid Innovation Program and $75M for the Industrial Base Innovation Fund to promote the development of new technologies and timely fielding of critical equipment.
  • Instead of across-the-board sequestration cuts, the bill proposes 1,065 specific cuts to programs and redirects some of those funds to higher priorities.
  • Translates delays in acquisition programs into spending deferments and reductions, including:
    • $204M from the Army’s Warfighter Information Network-Tactical Increment II due to test issues
    • $85M from the Air Force’s Space Fence radar system due to acquisition delays
    • $45M from follow-on development of the Navy’s E-2D Advanced Hawkeye aircraft due to contract delays.

Health and Human Services

HHS funding is part of the broader Labor, Health and Human Services, and Education Appropriation which totals $156.8 billion in discretionary funding, and the Agriculture Appropriation.  We estimate the HHS portion of these appropriations to be $80B.  HHS highlights of the omnibus bill include the following:

  • $2.6B for FDA, $217M above FY 2013
  • $3.7B for CMS management and operations, equal to the sequester level
  • $6.9B for the CDC, $567 million above the FY 2013
  • $4.4B for the Indian Health Service, $304M above the post-sequestration level
  • $29.9B for NIH, $1B above FY 2013 post-sequester
  • $30.9B for ACF, $782M above FY 2013 enacted level
  • $3.6B for SAMHSA, $144M over FY 2013 enacted level
  • $8.6B for Head Start, a $1B above the post-sequestration level
  • $2.36B for the Child Care and Development Block Grant, $154M above FY 2013
  • $3.6B Community Health Centers (CHCs), a $700 million increase
  • $2.3B HIV/AIDs Programs, a $70M increase
  • The bill provides no new funding for ObamaCare, and holds the line on ObamaCare funding in CMS.
  • $305 million for CMS to allow for the timely processing and payment of benefits, and the continuation of essential services for the increasing number of Americans who rely on traditional Medicare programs.

Education

  • $250M for Race to the Top—Preschool Development  to be used for grants to States
  • $11.5B for IDEA/Special Education 
  • $14.4B for Title I/Disadvantaged Schools, a $625M increase
  • $1.2B for 21st Century Community Learning Centers, an increase of $58M
  • $1.3B for Impact Aid, an increase of $65M
  • $22.8B for the Pell Grant program

Veterans Affairs

VA funding is part of the broader Military Construction/Veterans Affairs Appropriations.  VA’s discretionary funding totals $63.2B for FY 2014.  VA highlights of the omnibus bill include the following:

  • $55.6B in FY 2015 advance appropriations for veterans medical care
  • $20M above the budget request to upgrade computer hardware, such as servers, in VA Regional Offices to handle the advanced program requirements of the Veterans Benefits Management System
  • $250M for rural health care, including telehealth and mobile clinics
  • Mandates several requirements before the VA can obligate more than 25% of the funding for  Vista electronic health record modernization
  • $4B in FY 2014 to meet the health care needs of veterans who have served in Iraq and Afghanistan
  • $4.9B to provide healthcare for women veterans in FY2014
  • $7.6B for Long Term Care
  • $586M for Medical and Prosthetic Research
  • $3.7B for Information Technology, $20M over the request
  • $140M – an increase of $20 million above the President’s request and $26 million above
  • the fiscal year 2013 enacted level – for information technology upgrades at regional offices to
  • manage the improved paperless claims processing system;
  • $250 million for rural health care, including telehealth and mobile clinics, for veterans in rural and highly rural areas, including Native American populations.
  • Minor Construction within the VA is funded at $715M – the same as the President’s request and $108 million above the fiscal year 2013 enacted level.

State and International Programs

  • $49B includes $6.5B for Overseas Contingency Operations (OCO) and $15.7B in base and contingency funding for operational costs of the State Department and related agencies
  • $1.3B for USAID operations, of which $91 million is for contingency funding

Homeland Security

Overall FY 2014 discretionary spending for DHS is $39.3B, a reduction of $336 million from the FY 2013 enacted level.

  • Coast Guard: $10.2B overall, of which $8.7B is discretionary spending. The bill also provides $425 million in targeted increases above the FY 2014 request to support front line personnel with resources, including $23 million and $2 million respectively for pre-acquisition design work of the Offshore Patrol Cutter and for initial acquisition planning and design of a new polar icebreaker.
  • Transportation Security Administration (TSA): $7.4B for TSA is reduced by $2.1B in offsetting collections and fees. The bill includes funding for investments in explosives detection systems, passenger screening technologies, and air cargo security. The bill includes $177 million for passenger screening technologies, $93 million for Secure Flight, which matches passenger data against records contained in portions of the Terrorist Screening Database, $83 million for expedited and other vetting programs, and $25 million for the Federal Flight Deck Officer and Flight Crew Training program.
  • U.S. Customs and Border Protection (CBP): $10.6B, which adds $111 million above the FY 2013 enacted level. Adds $91 million above the budget request for Air and Marine operations and procurement of critical assets, including enhanced radar for unmanned aircraft systems and restoring the 30% cut to flight hours proposed in the budget. Adds $10 million for trusted traveler programs, including additional Global Entry kiosks and mobile document readers, expanding preclearance activities, and for border transformation programs like the land border integration effort and the port runner/absconder program.
  • U.S. Immigration and Customs Enforcement (ICE): $5.6B for ICE, of which $2.8B is for detention and removal operations, including border patrol, special agents and immigration officials.
  • United States Citizenship and Immigration Services (USCIS): $116 million in direct appropriations for USCIS and with $114 million, fully funds the E-Verify employment eligibility verification system.
  • United States Secret Service: $1.6B, expands cyber training provided by the Secret Service to state and local law enforcement officials, grows cooperation between the Secret Service and the FBI in cybersecurity, and maintains the Service’s primary role in protecting U.S. financial systems in cyberspace.
  • Domestic Nuclear Detection Office (DNDO): $285 million, including $14 million for handheld portable radiation detectors, $71 million for research and development of next-generation detection technologies, and $22 million for the Securing the Cities program.
  • National Protection and Programs Directorate (NPPD): $1.2B for the Infrastructure Protection and Information Security Program, including $792 million for cybersecurity protection of Federal networks and incident response, consisting in part of:
    • $382 million for intrusion detection on civilian Federal networks
    • $200 million to build on a new monitoring and diagnostics program begun in 2013 to better protect civilian Federal networks against threats through real time analysis of day-to-day activity
    • $15.8 million for cybersecurity education to train future cyber warriors
  • Science and Technology (S&T): $1.2B, sustains investment in high-priority research and development efforts, including $404 million in funding for the construction of the National Bio- and Agro-Defense Facility (NBAF).  
  • Office of Health Affairs (OHA): $127 million, including $85 million for the Bio-Watch Program and $2 million to complete demonstration projects through the Chemical Defense Program.

Housing and Urban Development

  • HUD’s operating budget declines this year as FY 2014 discretionary funding of $32.8B represents a 2% decrease from the FY 2013 enacted level of $33.5B.
  • Funding includes:
    • $26.3B for Public and Indian Housing (increase of $411M from FY 2013 enacted and $1.5B below FY 2014 request)
    • $10.5B for Housing Programs ($561M above FY 2013 enacted and $381M below FY 2014 request)
    • $6.6B for Community Planning and Development Programs ($145M less than FY 2013 enacted)
  • Provisions of Interest
    • $36M for the HUD OCIO.
    • $250M for development, modernization, enhancement and maintenance of Department-wide and program-specific IT programs.

Justice

  • Bolsters resources for DOJ capabilities to counter growing cyber threats. Within 120 days of enactment, DOJ is to provide a multiyear strategic plan that identifies resources, programs and coordination structures need to enable prevention of and more rapid response to future cyber attacks.
  • Justice Information Sharing Technology (JIST):  $25.8 million in funding for JIST, as well as enabling the Attorney General to transfer funds to this account from funds available to DOJ for enterprise-wide IT initiatives.
  • National Security Division (NSD): $91.8 million for the NSD, including funds to support the Intelligence Community to combat cyber threats at with resources that at least match FY 2013 levels.
  • Federal Bureau of Investigation (FBI): Receives $8.3 billion, an increase of $232 million over FY 2013 enacted levels.
    • $8.2 billion for salaries and expenses of the FBI.
    • $390.0 million in resources to continue support its Next Generation Cyber Initiative and cyber task forces
    • The FBI is expected to increase resources for the National Instant Criminal Background Check System (NICS) by $60,000,000 to expand capacity of NICS to meet rising demand for system resources.
  • Drug Enforcement Administration (DEA): $2.4 billion, marking a rise of $21 million over FY 2013 levels.
  • Includes $361.0 million for regulatory and enforcement efforts to combat prescription drug abuse.
  • Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF): $1.18 billion, an increase of $47 million over FY 2013 enacted.
  • Includes resources for the updating and expanding of the National Integrated Ballistic Imaging Network (NIBIN).
  • U.S. Marshals Service: $2.7 billion, marking a decrease of $72 million from FY 13 due to reduced estimates for federal detention requirements.
  • Federal Prison System (BOP): $6.9 billion, an increase of $79 million above FY 2013 enacted.
  • Maintains staffing levels and continues activation of new prisons.
  • Grants Program: $2.2 billion for various state and local grant programs, $32 million above FY 2013 enacted level.
  • State and Local Law Enforcement Assistance: $1.17 billion for initiatives including victims of human trafficking, DNA grants, Byrne-Justice Assistance Grant (JAG) subgrantees, as well as National Instant Criminal Background Check System (NICS) Initiative grants.

Energy

  • National Nuclear Security Administration (NNSA): Receives $11.2 billion to maintain the safety, security, and readiness of the nation’s nuclear weapons stockpile.
    • Increases funding for Weapons Activities by $847 million over FY 2013, providing $7.845 billion in FY 2014.
    • Critical defense funding upholds national nuclear deterrence posture.
    • Includes $537 million to extend the life of the B61 nuclear bomb.
  • Energy Programs: Increases funding for energy programs to $10.2 billion, a $620 million rise over FY 13 enacted levels. Including:
    • $562 million for research and development to advance coal, natural gas, oil, and other fossil energy technologies. ($28 million above FY13 enacted level)
    • $889 million for nuclear energy research and development to further next generation of nuclear power. ($36 million over the FY13 enacted level.)
  • Science Research: Office of Science receives $5.071 billion ($450 million over FY 2013) for breakthroughs in energy applications and development of next-generation high performance computing systems.
  • Provides $280 million for Advanced Research Projects Agency-Energy (ARPA-E), an increase of $29 million over FY 2013, to develop promising/high-risk future energy technologies.
  • Energy and Efficiency and Renewable Energy (EERE) programs receive $1.9 billion, an increase of $182 million over FY 2013, to advance biomass, electric vehicle, and energy efficient advanced manufacturing technologies.
  • Defense Environmental Cleanup receives $5.0 billion, an increase of $381 million above FY 2013.
  • Cuts funding for Nuclear Nonproliferation by $289 million from FY 2013, providing $1.954 billion for FY 2014.
  • Provides $147 million for Electricity Delivery and Energy Reliability, including $5 million within Cyber Security for Energy Delivery Systems to enhance full-scale electric grid testing capabilities associated with integration of wireless technologies, power generation, and communications and control systems.

Agriculture

  • USDA’s operating budget is a winner this year as FY 2014 discretionary funding of $20.9B represents a 2% increase over the FY 2013 enacted level of $20.5B.
  • Funding includes:
    • $5.5B for the Forest Service
    • $2.6B for Agriculture Research
    • $292.8M for the Forest Service
    • $828M for the Animal and Plant Health Inspection Service
    • $1.5B for the Farm Service Agency
    • $2.4B for Rural Development ($180M above FY 2013 enacted level)
    • $1B for the Food Safety and Inspection Service ($19M below FY 2013 enacted level)
    • $2.6B for the Food and Drug Administration (Restores $85M in fee revenue lost dues to sequestration)
    • $215M for the Commodity Futures Trading Commission ($100M below President’s 2014 Request)
    • $826M for the Natural Resources Conservation Service
  • Provisions of Interest
    • Budget contains requirements for the Secretary of Agriculture to eliminate waste, fraud, and abuse in the Supplemental Nutrition Assistance Program.
    • Makes cuts to lower-priority programs.
    • Provides $44M for the USDA OCIO, no less than $27M of which is to be spent on USDA cybersecurity requirements.
    • Provides $4.2M for APHIS’ IT infrastructure.
    • Increases CIO governance over IT expenses, requiring the CIO to approve of any investment greater than $25K before the investment is made.
    • Stipulates no new IT system or upgrade of current systems may be acquired without OCIO and Executive IT Investment Review Board approval.

Transportation

  • DOT’s operating budget is flat this year as FY 2014 discretionary funding of $17.8B represents a 0.5% decrease from the FY 2013 enacted level of $17.9B.
  • Funding includes:
    • $41B for the Federal Highway program (same level authorized in the MAP-21 transportation authorization legislation that expires on September 30, 2014); an increase of $557M from FY 2013 enacted
    • $12.4B for the Federal Aviation Administration ($168M below FY 2013 enacted);
    • $1.6B for the Federal Railroad Administration (decrease of $34.6M from FY 2013 enacted)
    • $2.15B for the Federal Transit Administration (decrease of $100M from FY 2013 enacted)
    • $819M in mandatory and discretionary funding for the National Highway Traffic Safety Administration (increase of $8.9M over FY 2013 enacted)
    • $585M for the Federal Motor Carrier Safety Administration (increase of $24M above FY 2013 enacted)
    • $12.8M increase over the FY 2013 level for the Pipeline and Hazardous Materials Safety Administration
  • Provisions of Interest
    • Funding for FAA NextGen investments is preserved.
    • $15.7M for the DOT OCIO.
    • $7M for upgrading and enhancing the DOT’s financial systems and re-engineering business processes.
    • $4.45M for cybersecurity initiatives.

NASA

  • Preserves balance of NASA portfolio across science, aeronautics, technology and human space flight.
  • Asteroid Redirect Mission (ARM): Completion of significant preliminary activities is needed prior to NASA and Congress making long-term commitment to this mission concept.
  • Science: Funding totals $5.15B, including Education and Public Outreach, Earth Science, Planetary Science, Astrophysics, and Heliophysics.
    • Prior to expending any funds on the development of JPSS climate sensors, NASA is to prepare development plans with notional budget and schedule details for submission to the Appropriations Committee.
    • Under Planetary Science, Mars Exploration receives $288 million, including $65 million for the development of the Mars 2020 Rover.
  • Aeronautics: Funding amounts to $566 million.
  • Space Technology: Funding totals $576 million.
  • Exploration: $4.1 billion for Exploration mission directorate, including Multi-Purpose Crew Vehicle and Space Launch System programs.
    • $1.6 billion is provided for the Space Launch System (SLS) to sustain core development of mission components. Due to concerns regarding diversion of funds for activities with only tangential relevance to the SLS, NASA is expected to complete quarterly spending reports on additional potential for the investment along with tracking milestones and development schedules.
    • $1.2 billion is provided for the Orion Multi-Purpose Crew Vehicle, including $3 million for Construction and Environmental Compliance and Restoration.
  • Space Operations: $3.8 billion for Space Operations, including strong support for the International Space Station (ISS).
  • Cross Agency Support: $2.8 billion in Cross Agency Support funds security, infrastructure, and reports.
  • Office of Inspector General to receive $37.5 million.
  • Administrative Provisions include establishing terms and conditions for the transfer of funds.

Labor

  • $2.6B for Job Training through for Workforce Investment Act Grants to States, an increase of $121M
  • $80M for Unemployment Insurance (UI) Program Integrity, an increase of $16M
  • $10.4B for the Employment Training Administration, a decrease of $562M from FY 2013 enacted level
  • $1.7B for the Office of Job Corps
  • $269.5M for Veterans Employment and Training Service (VETS)

Treasury

  • $112M for the FinCEN (Financial Crimes Enforcement Network ), $7M above a FY 2014 full-year CR level
  • $226M for the Community Development Financial Institutions Fund (CDFI), $17M above a FY 2014 full-year CR level
  • $11.3B for IRS
  • $35M Treasury Inspector General, a $7M increase
  • $156.4M Treasury Inspector General for Tax Administration, a $12.6M above a FY 2014 full-year CR level
  • $92M to help address identity theft and refund fraud, combat offshore tax evasion, and improve delivery of services to taxpayers. 
  • The bill includes no additional funding for ObamaCare
  • $3M available until 9/30/15 for IT modernization requirements
  • Up to $250M available until 9/30/15 for IT support
  • $313M available until 9/30/16 for capital asset acquisition of IT systems, including management and related contractual costs for business systems modernization.

Interior

  • $954 million for the Bureau of Reclamation’s Water and Related Resources, $106 million over FY 2013.
  • Bureau of Land Management (BLM): Funded at $1.1 billion, marking an increase of $7 million above FY 2013 enacted. Provides for effective stewardship of public lands.
  • National Park Services (NPS): $2.6 billion, an increase of $28.5 million over FY 2013 enacted. Allows every national park to remain open for the duration of FY 2014.
  • U.S. Forest Service: $5.5 billion, including increases for wildfire fighting and management.
  • United States Geological Survey (USGS): Provides $1.03 billion for Surveys, Investigations, and Research, including an increase of $400,000 for data preservation.
  • American Indian and Alaska Native Programs:  Provides funding for health care, law enforcement, and education.
    • Indian Health Services: Receives $4.3 billion in funding, an increase of $78 million over FY 2013 enacted levels.
    • Bureau of Indian Affairs and Education:  Provides $2.5 billion in funding, an $18 million increase over FY 2013 enacted levels.
  • U.S. Fish and Wildlife Service (FWS): $1.4 billion, a decrease of $32 million from the FY 2013 enacted levels. This funding provides for compensating ranchers for livestock loss, stopping spread of mussel and fish varieties, and species conservation.
  • Fully funds request for information technology management.

Commerce

  • National Oceanic and Atmospheric Administration (NOAA): $5.3 billion, marking an increase of $310 million over the FY 2013 enacted levels.
    • Including $953.6 million for the National Weather Service as well as $187.1 million for the National Environmental Satellite, Data and Information Service (NESDIS) operations, research, and facilities.
    • Fully funds NOAA’s weather satellite programs (GOES-R and JPSS). Although NOAA is expected to focus on the weather satellite program and to better address gaps in its FY 2015 budget, NOAA will continue to provide quarterly updates to the Committees on Appropriations regarding its weather satellite portfolio.
  • Bureau of Census: $945.0 million, including $693.0 million for periodic censuses and programs.
  • United States Patent and Trademark Office (USPTO): $3.0 billion, marking an increase of $91 million over FY13.
    • Maintains provision that USPTO makes available any fees collected in excess of estimates.
    • Adopts language from the House and Senate reports for Patents End-to-End. USPTO will submit a report to the Committees on Appropriations within 90 days of the Act’s enactment.
  • National Institute of Standards and Technology (NIST): $850 million for NIST, increase of $41 million over FY13 enacted, including $651.0 million for NIST’s scientific and technical core programs.
    • Increase of $5.0M for cyber security research. Increase of $1.0M for disaster resilience research.
    • $4.0M for the National Initiative for Cybersecurity (NICE) Program.
    • $15.0M for the National Cybersecurity Center of Excellence.
    • $16.5M to maintain the current operating level for the National Strategy for Trusted Identities in Cyberspace (NSTIC).
  • International Trade Administration (ITA): $470.0 million in total resources, offset by $9.4 million in estimated fee collection.
  • Bureau of Industry and Security (BIS): $101.5 million for operations and administration.
  • Economic Development Administration (EDA): $246.5 million for programs, including $209.5 million for Economic Development Assistance Programs.
  • Minority Business Development Agency: Receives $28.0 million in funding.
  • Economic and Statistical Analysis: Provides $99.0 million in funding.
  • Working Capital Fund: Rather than supporting the level requested for the WCF, the Commerce Department is expected to submit a list of transfers to and activities funded from the WCF along with its 2014 spending plan. The agreement supports the plan to establish the Enterprise Security Operations Center from the WCF.


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

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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 on twitter 
@FIAGovWin.

Targeting Security Improvements through Supply Chain Risk Management

National Aeronautics and Space Administration (NASA) officials started market research over a year and a half ago for the follow-on to a government-wide acquisition contract (GWAC) that supplies federal agencies with information technology products and product-based services. One new aspect of this follow-on is the growing emphasis on IT supply chain risk management.

Since the release of the Request for Proposal (RFP) for the next iteration of the Solutions for Enterprise-Wide Procurement (SEWP) contract in August, NASA’s program office for SEWP has released 12 amendments and extended the submission due date into December.  The security associated with IT supply chains has received increasing attention. On the vendor side, more detail around supply-chains will be disclosed in SEWP V. Information about industry supply-chains will help to clarify the various risks and costs as products move from manufacturers to government customers. Supply-chain risk management considers what technologies agencies are using and evaluates layers of risk from how a product moves from a manufacturer to a customer.

Aligned with the Executive Order released in February, efforts to improve critical infrastructure security have highlighted mitigating security risks introduced through the supply chain. Back in April 2013, the Cyber Security Research Alliance (CSRA) conducted a workshop in collaboration with the National Institute of Standards and Technology (NIST) targeting security for cyber-physical systems (CPS). Cyber-physical systems span applications in critical infrastructure including power and water, industrial systems, emergency management, security systems, and medical devices among others. Among other topics, the workshop participants explored the impact of supply chain on securing CPS. The global market for information and communication technology product manufacturing introduces numerous opportunities for products to be subject to tampering or sabotage. Both insufficient diligence around buyer practices and lack of visibility into the supply chain present challenges for reducing and managing risks.

Recommendations for moving forward included developing supplier reliability and monitoring methodologies. In particular, findings recommend advancing research and development for tools to identify vulnerabilities and corrective measures, reviewing existing practices to improve information sharing and collaboration between suppliers and buyers, building security technology refresh into life-cycle, and leveraging analytics to target potential future failures and counterfeits.

Moving forward, the practices of government contractors are likely to be subject to increasing scrutiny as agencies face growing reporting requirements, demand cost efficiencies, and strive to comply with security mandates.  Past iterations of the SEWP have been leveraged by organizations across the government. With the increased performance period and ceiling value of SEWP V, it’s clear that trend is expected to continue.  In order for vendors to maximize the opportunity, they need to meet the modernized requirements. Deadline for submission to the SEWP V RFP is set for December 16, 2013.

Further perspective on current and evolving government cyber security concerns is available in our latest report: Federal Information Security Market, FY 2013-2018.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

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