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Real ID Holdouts

GovWin confirmed with DHS Program Manager, Darrell Williams, five states have not filed for an extension for REAL ID compliance. Those states are; Delaware, South Carolina, New Hampshire, Montana and Maine. The extension provides states additional time to meet DHS deadlines, the first being Dec. 31, 2009 which requires states to have security upgrades in place for drivers license systems to provide verification of lawful status of all applicants, thereby ensuring illegal aliens cannot obtain REAL ID licenses.

Maine led opposition to the passage of the REAL ID legislation from the outset and Montana's Governor Schweitzer sent a letter to Colorado's Governor Bill Ritter (and 16 other governors), stating, "We recognized that Real ID was a major threat to the privacy, constitutional rights, and pocketbooks of ordinary Montanans."

South Carolina Governor Mark Sanford voiced his concerns about REAL ID in his State of the State address in January: "We're defending privacy rights by becoming the fifth state in the country to say no to the heavy-handed Real ID legislation from the federal government, and I thank each one of you who voiced your opinion in that important debate tied to the larger principle of limiting federal power." That said, a state official commented to GovWin that the decision to file the extension is in the governor's court and legislators are not vehemently opposed to filing the extension, given there is no compulsory obligation by doing so. The South Carolina Department of Motor Vehicles has a hot button regarding customer service. The concern is simply protecting citizens from the impact systematic changes would have on citizens seeking a driver's license, given the state recovered from customer service issues in recent years.

GovWin Take:

  • Opposition to REAL ID remains to be centered around two key issues; privacy and funding.
  • Governors collectively continue to respond to REAL ID concerns, as evidenced by the February 24th National Governors Association meeting where all the heads of state voted to push back on DHS for more funding.
  • DHS released $87 million dollars dedicated REAL ID grants; however, nationwide implementation costs are still estimated to be 3.9 billion, which means the states are left to fund the bulk of the effort.
  • DHS has come a long way from this time last year and have responded in part to the cry of the states, as evidenced by the release of less stringent requirements in the final regulations released in January. Much work lies ahead to gain consensus and shared investment in REAL ID goals.

New Hampshire: Extending HIPAA to Cover EHRs

New Hampshire, in an effort to protect patient's rights and prevent unprecedented privacy violations, is considering a health information privacy bill, House Bill 1587. The bill does not seek to replace the federal Health Insurance Portability and Accountability Act (HIPAA), but does propose to extend it through tighter state laws.

Concerns have been raised around the country amongst stakeholders in the health care community over the lack of regulation for electronic health records under current HIPAA standards. Several states have engaged in study groups and participated in the Health Information Security and Privacy Collaboration (HISPC) led by RTI International. Now New Hampshire is seeking to legislatively address the transition from paper based records to electronic records.

HB1587 seeks to give patients control over who can access their medical records. This includes a provision for an "audit trail" that enables a patient to request information on who accessed their account, when and how much of it they saw. Further the bill seeks to place stricter limitations on the use of health information for research. A study committee would be created under the bill to look into a potential standard health information release form that all state health care providers could use. However, reportedly some portions of the bill are in conflict with HIPAA standards.

GovWin's Take:

  • NH is at the legislative forefront of the on-going privacy and security measures to protect health information. Rhode Island is considering similar measures in the RI Health Information Act of 2008. Stakeholders may see more state legislature activity seeking to assist in developing privacy policies to balance the protection of individual rights while continuing to push for the implementation of electronic health records.
  • The closer states get to providing effective and efficient governance the closer the Health IT tipping point is. The technologies for health IT exist, but the lack of governance, security and privacy standards have been a chief barrier to widespread adoption.

DHS' EINSTEIN -- new relativity?

DHS Secretary Michael Chertoff announced a proposed $5.4 Billion IT budget for 2009, the bulk of which ($3.7B) will go to mission investments that are no surprise.  However, he also indicated a big new source of technology funding for DHS -- the President's recently announced Cyber Initiative, which was consolidated under the Director of National Intelligence (DNI) and will fund programs across the Federal Government.  As perhaps an indicator of what is coming, DHS' National Cyber Security Division (NCSD) received $293.5 million in funding for US-CERT's EINSTEIN system, which monitors traffic at the gates of Agency portals for suspicious activity.  According to last year's OMB-300 for Einstein, the anticipated BY2008 spending was only $14.2MM, so we have certainly found one area where the Cyber Initiative is pumping up the volume.  We will be looking for more.

Seeing Green in Green

It is a wonderful thing for a life-long environmentalist to see governments and vendors scrambling to be green. I am not bothered one bit if the motivation is to make or save money either. I don't think it is possible to peruse a public sector rag without a headline or two pointing out data center innovations here or new purchasing policies there. As this practice gains momentum, the Feds now have added some real steam to the process.

On December 26, the Federal Acquisition Regulation Council released an amendment to FAR that will require agencies to give preference to EPEAT (Electronic Products Environmental Assessment Tool)-rated PC's and related hardware.

The Office of Management and Budget released a proposed policy letter on December 28 that provides structure for agencies to acquire environmentally friendly products and services including high-efficiency vehicles, bio-based and EnergyStar products, EPEAT rated electronic products, recycled products, and intelligent material selection. Under this proposed policy, GSA will populate their catalogs with green products and phase out competing non-green products by 2010.

The greening of GSA's Schedule 70 could prove to bolster it's usage in the state and local market. If GSA can get these green products in their catalogs quickly, it could save the states a lot of effort in identifying and negotiating contracts for green products themselves.

In addition to new products, disposal of electronic waste is just as important an issue in overall greening. The Commonwealth of Kentucky is currently investigating it's options in adopting responsible disposal of electronic equipment through an RFI on January 9, 2008.

GovWin's Take:

  • Vendors who can establish purchasing vehicles for states to obtain green products will have a major competitive advantage
  • build on already impressive growth in state and local government usage by quickly including green products in Schedule 70
  • Look for more and more states to establish contracts for responsible disposal and recycling of electronic equipment

Moving Up the Priority Chain – Is Child Support Last in Line?

The theme of this year's National Child Support Enforcement Association (NCSEA) Policy Forum and Training Conference in Washington, DC, January 28-30, 2008, Putting Families First? How the Policy Provisions of Federal Law Affect Families, Government, and Communities, truly portrayed the emerging hot topic currently being debated in Congress: restoring child support funds. State and federal child support agencies, employees, and the vendor community joined together to discuss the rippling effects of child support funding cuts and the sense of urgency to take action to convince Congress to reverse these cuts that are included in the Deficit Reduction Act (DRA) of 2005.

Unfortunately, the President's proposed budget for FY 2009 does not make any changes to the current provision in the Deficit Reduction Act (DRA) of 2005 that prohibits states from using child support incentive payments to match federal child support funds that are awarded to states based on their performance. The DRA has cut incentive funding by two-thirds. According to a document prepared by the NCSEA in January 2007 based on issues and discussions raised with members of the Congress in the deliberations over the DRA, the incentive funding matched with federal funds has motivated states to do better on their performance measures over the recent years by implementing:

  • Electronic funds transfers
  • Direct deposit of child support payments
  • Electronic payment methods
  • Automated voice response systems
  • Web-based access
  • Internet staff training

Furthermore, the Congressional Budget Office has estimated a reduction in the total amount of child support collections by $11 billion over the next decade. As a result of the 17 percent cuts in overall child support program funding, states and counties have been postponing or cancelling their technology plans, such as system replacements, computer upgrades, and document imaging projects. Additionally, these cuts have cost states and counties significant lay-offs. For example, as mentioned by one of the panelists, Vicki Turetsky, Director for Family Policy, Center for Law and Social Policy, one medium-sized state that has experienced significant lay-offs. About 300 positions at both the state and county level have been effected and the state is also preparing to cut back on a major state contract to expand employer health care coverage through child support. According to a study conducted by the Lewin Group, Anticipated Effects of the Deficit Reduction Act Provisions on Child Support Funding and Performance, 2007, the child support cuts will imperil call centers, timely payment processing, enforcement efforts, and child health insurance initiatives, just to name a few.

So are states headed toward a downward spiral? According to an unpublished NCSEA state survey (McNichol and Lav, 2008), child support funding cuts will threaten state budgets in the upcoming years. So far, the following seven states with projected gaps in their overall state budget for FY 2009 have failed to pass temporary stop-gap child support funding for FY 2008: Alabama, Arizona, Maine, New Jersey, New York, Rhode Island, and South Carolina. Iowa and Maryland have passed partial child support funding for FY 2008. In addition, the following 17 states have projected budget gaps in FY 2009, even though they have passed full or partial stop-gap funding in FY 2008:

  • California
  • Connecticut
  • Florida
  • Illinois
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Nevada
  • Ohio
  • Oklahoma
  • Texas
  • Vermont
  • Virginia
  • Wisconsin

GovWin's Take:

  • The DRA provision has significantly cut states' ability to efficiently administer the child support program and collect child support payments. With the 17 percent total cuts in child support program funding, states will continue to experience significant lay-offs and cut-backs on services on both the state and county levels, which will have an impact on families, CIOs, and the vendor community.
  • Many states are already experiencing financial shortfalls and budget gaps in the current and upcoming fiscal years. If the child support program funding is not restored, states could be facing a significant freeze on technology initiatives and improvements. Many states and counties are also expected to roll back their programs, such as reducing or closing customer service units and call centers.
  • Vendors who depend on Business Process Outsourcing should get their lobbyists involved immediately and should be working with and not against Congress. Furthermore, vendors should also be meeting with state delegations and seeking sponsorships.

Federal Communications Commission's Summit on Next Generation 911

On February 6, 2008, the Federal Communications Commission held a summit on Next Generation 911 (NG-911). The summit was aimed at exploring NG-911 technologies and the steps that need to be taken by Public Safety Answering Points (PSAP) to implement this technology. NG-911 is a 911 system that uses an IP-based network which allows for the sharing of voice, video, and data across the network. With more than half of commercial cell phones equipped with camera and video capabilities, it only seems necessary that those technologies be used to their full capacity during emergency situations. The goal of NG-911 is to allow a person to transmit voice, video, or data from an emergency to the PSAP. Pictures and video of suspects, crime scenes, license plates, and disaster areas can be valuable to first responders during an emergency.

The summit began by discussing PSAPs and their use of technology. Panelists included Directors and Commanders of emergency communication centers as well as a variety of agencies and industry leaders. The discussion centered on PSAP planning efforts and the actions that need to take place to ensure that disaster recovery is effective. Many expressed the need to "professionalize" the PSAP industry. PSAPs are struggling to retain dispatchers for long periods of time. It is crucial for PSAPs to provide the resources necessary to make dispatching a career. Many panelists confirmed that the turnover rate among PSAP dispatchers is so high because of the level of stress and lack of competitive pay and benefits. In order to begin planning, you need to have dedicated and skilled dispatchers to sit at the discussion table. These dispatchers will have the knowledge and understanding of how to properly address the "what if's" of emergency response. They can help formulate proper contingency plans.

The panel also discussed the need for a set of national standards that guide PSAP directors and dispatchers in dealing with disaster scenarios. Who will take over calls if a PSAP is compromised? What is the best way to communicate with the deaf and hard of hearing? What roles will people play in recovery? What technologies need to be implemented to ensure that calls get directed to the right PSAP? These are all the questions that will need to be answered through national standards.

The second panel gave insight into what NG-911 is and the progress it has made over the past few years. Many noted that it is imperative that PSAPs implement IP networks as soon as possible. It may not be as necessary to implement an entire NG-911 system as it is to implement a digital IP network. This has been expressed as one of the possible standards.

The panel also discussed the status of 911 systems in rural areas. There are still a good number of cities and counties who don't have wireless 911 or even standard landline 911. A move to wireless 911 should be a federal mandate if the nation wants to eventually move to a NG-911 standard. A few panelists noted that we are far behind where we thought we would be in this realm. Many would have thought that phase II wireless 911 would be nearly nation-wide. A lack of funding, standards, and proper national attention to this issue can be attributed to the lack of wireless 911 coverage.

GovWin agrees with many of the statements made by the panelist and understands that there needs to be more attention put towards 911. It is important for the public sector to work closely with the private sector to improve 911 coverage. GovWin sees wireless 911 and NG-911 as an ever growing industry. As agencies and PSAPs move towards this level of service, there will be greater demand for IP networks, telephony, and system software that is capable of handling voice, video, and data. It is important for vendors to be on the look out for jurisdictions that are working on pre-basic 911 systems. These jurisdictions are most likely going to be implementing wireless and NG-911 systems in the near future as federal and state legislatures are beginning to demand IP-based 911 systems.

FY 09 Federal IT Security Budget Request Increases 9.8%

Information security received a 9.8% boost in the President's FY 2009 budget request, growing from $6.6 billion in 2008 to $7.3 billion in 2009. The Department of Transportation emerged as the leading requesting agency increasing its security request $432 million, or 130%. Much of this request may be tied to the desire to secure the department's IT infrastructure during its move. The Department of Defense follows Transportation with the largest dollar increase to its security request with a $131 million increase. If approved as requested DOD's overall security budget will increase from $3.9 billion to just over $4.0 billion.

Few agencies saw their budgets decrease, and for those that did the decreases varied significantly form under 1.0% to nearly 40%. The Corps of Engineers and Social Security Administration fared the worst out of all agencies seeing their security budgets cut by 40% and 38% respectively.

GovWin's Take:

Although most high-end request can expect to be pared down as the FY 09 budget moves through the authorization process, the enacted FY 08 budget hints that agencies are following a trend of spending more than requested. Spending on IT security is no exception to this rule as enacted FY 08 spending increased 8.8% over the FY 08 request, growing from a requested amount of $6.0 billion to an enacted amount over $6.6 billion.

2008 Department of Homeland Security Grants

The Department of Homeland Security (DHS) today announced the release of application guidance for 14 federal grant programs whose collective purpose is to strengthen prevention, protection, response and recovery capabilities at all levels of government. In Fiscal Year 2008, DHS will award more than $3 billion in grants to states, territories, urban areas, and transportation authorities under 14 programs to bolster national preparedness capabilities and protect critical infrastructure- that's $376.3 million over last year!

The two largest grant programs are the Homeland Security Grant Program (HSGP) totaling $1.69 billion and the Infrastructure Protection Program (IPP) totaling $852.4 million. IPP applications are due to the department no later than March 17, 2008, and HSGP applications are due May 1, 2008.

HSGP is a wide-reaching program that funds planning, organization, equipment, training, and exercise activities in support of the National Preparedness Guidelines and related plans and programs. It is comprised of four programs:

  • State Homeland Security Program (SHSP) -- $862.9 million to enhance state, territorial and local capabilities through planning, equipment, training and exercise activities
  • Urban Areas Security Initiative (UASI) -- $781.6 million to build capabilities in 60 high-threat, high-density urban areas across the country
    • Law Enforcement Terrorism Prevention Activities -- In addition, the department is directing that at least 25 percent of funds allocated from both SHSP and UASI build state and local law enforcement terrorism prevention capabilities
  • Metropolitan Medical Response System Program (MMRS) -- $39.8 million to 124 MMRS jurisdictions to enhance mass casualty preparedness
  • Citizen Corps Program (CCP) -- $14.5 million to states and territories to engage citizens in community preparedness

IPP supports specific activities to protect critical infrastructure, such as ports, mass transit, highways, rail and transportation. IPP is comprised of five separate grant programs:

  • Transit Security Grant Program (TSGP) -- $388.6 million protect critical transit infrastructure from terrorism
  • Port Security Grant Program (PSGP) – $388.6 million to enhance access control and credentialing, protect against IED and other non-conventional attacks, and conduct disaster-response training
  • Buffer Zone Protection Program (BZPP) -- $48.5 million to safeguard critical infrastructure sites from terrorist site surveillance or attacks with a focus on public-private partnership and fusion center coordination
  • Trucking Security Program (TSP) -- $15.5 million to identify and recruit highway professionals (carriers, drivers, first responders, highway workers) to actively participate in an anti-terrorism and security awareness program, as well as implement training programs and enable 24/7 call center support
  • Intercity Bus Security Grant Program (IBSGP) -- $11.1 million to prioritize vulnerability assessments, security plans and preparedness exercises

A few other programs include:

  • Emergency Management Performance Grants (EMPG) -- $291.4 million to support state and local emergency management programs
  • Operation Stonegarden Grants (OPSG) - $60 million to land border states to enhance law enforcement border security operations
  • Regional Catastrophic Preparedness Grant Program (RCPGP) -- $60 million to bolster catastrophic incident preparedness in designated UASI jurisdictions
  • REAL ID Systems Integration and Data Verification Grant Program -- $48.5 million to states for cooperative efforts to enhance the integrity and reliability of driver's licenses
  • UASI Nonprofit Security Grant Program (NSGP) -- $15 million to support target-hardening activities by nonprofit organizations at high risk of an international terrorist attack

Changes to the FY 2008 grants program include significant improvements based on extensive outreach to state and local preparedness partners. Guidance on all 14 grant programs is being released simultaneously to allow applicants more time to plan and apply for funding, as well as more rapidly begin implementing security measures.

GovWin's Take

Although this is a large increase ($376.3 million) over last year and combined with the continuing resolutions in place, the competition in the Homeland Security sector is intense and will continue to intensify. Those interested in selling into the vertical should position themselves through strong competitive differentiators and deep relationships. It is also of great importance to get in early with the grant process and potentially assist the states and localities in writing the RFA, which could lead to your technology being written in the specifications so the work will be sole sourced.

The President's Budget Request -- Sound and Fury?

GovWin's forecast & analysis season kicks off each year with the submission of the President's FY 09 Budget request. (NOTE: For those of you joining us in tearing apart the Exhibit 53's, we've noticed that the data is incomplete -- OMB told us yesterday that there will be a revised version later this Spring, although they didn't say when). A big highlight was the increase in the IT budget request of Veteran Affairs, which follows up on a big issue in the President's State of the Union Address. On the other hand, NASA is seeing more money for new rockets while seeing their IT budget decrease for the second straight year. Is there hidden IT spending there?

While indicative of the administration's priorities and planned areas for spending, the budget submission is still the first step in a process that should end with formal appropriations by Congress before the beginning of FY09 on October 1st. Unfortunately, when is the last time that that happened? In fact, people in the community I have been talking to have expressed a very cynical view of the current election year budget climate: "It's not a matter of whether Congress will neglect to pass a budget. It's whether they'll even try."

This may be an early indicator to expect a CR for FY09 until the election has passed at a minimum. Of course, this makes the spending levels in the FY 08 Omnibus Appropriation more important given that they will be the basis of the CR. Stay tuned for more from us on this issue.

A Tale of Two Border Programs

Recent remarks by DHS Secretary Chertoff and Attorney General Mukasey (http://www.dhs.gov/xnews/releases/pr_1203722713615.shtm) along with news articles in the Wall Street Journal ("U.S. Curbs Big Plans For Border Tech Fence," http://online.wsj.com/article/SB120370791803186319.html), the Washington Post ("'Virtual Fence' Along Border To Be Delayed," http://www.washingtonpost.com/wp-dyn/content/article/2008/02/27/AR2008022703747.html) and Washington Technology ( "US-VISIT expands its vision," http://www.washingtontechnology.com/print/23_03/32314-1.html) show that while mega-border programs SBInet (GovWin Opportunity ID : 15084) and USVISIT ( GovWin Opportunity ID : 6274) are making incremental progress, comprehensive solutions remain elusive. We recommend separating political posturing from the very hard work that DHS continues to do.

SBInet's Project 28 recently delivered a virtual border fence pilot that is operational but full of challenges, not the least of which is that many new radar towers are being used for desert target practice. And while USVISIT has deployed systems for tracking the comings and goings of visitors at airports, progress at the land borders – where over 90% of the traffic enters and exits -- is stalled.

DHS seems to be responding three ways. First, they are applying more old fashioned non-technology resources to the problem, such as more border patrol agents and tighter restrictions document checks at ports-of-entry. Second, they recognize that the border problem is an extremely difficult one with many competing priorities and a lack of Congressional leadership. As such, they are viewing recent system deployments as incremental pilots rather than failures and are looking for new ideas to make them better. Third, they seem to open to finding these ideas from vendors other than Boeing and Accenture, the primes on SBInet and US-VISIT, respectively.

Spending for SBI was set at $110 MM in FY08 and $157MM in the FY09 Budget request. While a full roll-out of Project 28 may not happen, DHS will be using many of the elements that work in other places as they seek to optimize border security "to the vanishing point" from ports-of-entry. US-VISIT showed commitments of $462MM in FY08 and a request for $453MM in FY09. VISIT is building very real capabilities in capturing and vetting biometric data but remains challenged by the tremendous difficulty of tracking visitors inside the border and upon exit. Border security remains a very hot political football, but, as the most visible tip of the larger immigration iceberg, it will remain a top priority for the current administration and its successor in 2009.

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