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GovWin Recon - November 20, 2013

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

Headlines beginning with an * include quotes from Deltek analysts. 

 

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Health IT:

Transparency and Performance:

Contracting / Acquisition:

Legislation:

State and Local:

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

 

 

 

 

Depressed Spending Heightens Focus on Key Technology Investments

At the beginning of November 2013, Defense Secretary Chuck Hagel delivered a speech at the Center for Strategic and International Studies that explored the future role of the U.S. military forces. Budget pressure is expected to continue as commanders weigh decisions about reduced end strength levels and optimized resource management. For Hagel, preserving investments in several strategic technologies will be critical to modern warfare.

Defense Secretary Robert Gates established the ISR Task Force in 2008 to expedite development and delivery of ISR technologies to forces in Iraq and Afghanistan. To date, the organization is reported to have spent around $12 billion.  Some of the technologies delivered include surveillance aircraft and drones. This past September, a memo from Deputy Defense Secretary Carter outlined a transition of the ISR Task Force from part of the Office of Secretary of Defense to the Under Secretary of Defense for Intelligence. The move is expected improve staffing and support rapid technology development. At the same time, the move suggests a strategic change for the organization as the task force evaluates global warfighter requirements.
 
The increasing emphasis on what General James Cartwright called “computational power in our command-and-control data analysis” will fuel demand for technology developments in areas including space systems, cyber capabilities, and ISR (intelligence, surveillance, and reconnaissance). The model of operations that evolved through conflicts in Afghanistan and Iraq has driven demand for greater precision through intelligence gathering capabilities.
 
In response to these shifts, tailored technology offerings are being brought to market that acknowledge eroding bandwidth prices and ballooning scale of data transfers in the defense and intelligence community.  In addition to improving access to data, systems that automatically scan ISR data sets for anomalies are accelerating data processing, analysis, and dissemination. These high volume/high data rate solutions will continue to present growth opportunities for vendors as requirements rescope and align with changes to military strategic priorities.

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

IT Security Proves Complex Challenge for VA

The ongoing investigation into unreported security breaches at VA highlights the disconnect between lawmakers’ oversight and departmental realities.

In the aftermath of a potentially disastrous breach in 2006, the VA began a concerted effort to transform how it handles privacy. The department formed a Data Breach Core Team (DBCT) responsible for investigating, cataloging, and reporting potential security incidents. These reviews leverage the VA’s Privacy Security Event Tracking System (PEST) to determine whether a breach has occurred. Since then, the department has continued to make other investments in information security. Collecting and analyzing contracted spending associated with a selection of security-centric terms yielded over $3 billion in awards since FY 2009.  Over the last five years, contracted spending reported by the VA for these various information security areas has followed an upward trend. 

This steady investment, however, has not resolved all of the department’s security challenges. More recently, in March 2013, the inspector general (IG) reported that an investigation substantiated allegations that the department failed to meet encryption requirements for transmitting sensitive data. In particular, personally identifiable information (PII) and internal network routing data were transmitted over an unencrypted carrier network. At the completion of its investigation, the IG recommended that VA implement configuration controls to ensure encryption of sensitive data and that information technology personnel receive specialized training regarding appropriate data protection practices and associated security risks.

Then, at a House Committee on Veteran’s Affairs hearing in June, compromises to the department’s computer network were confirmed. However, department representatives were unable to identify which systems were breached, attributing the issue to lagging adherence with the Federal Information Management Security Act of 2002 (FISMA). The failure to notify Congress of the security compromise was also called into question.

Recent reports regarding the department’s failure to comply with FISMA requirements should include the following note: As of FY 2012, none of the 24 major federal agencies achieved full compliance with all 8 of the FISMA components.

That’s right, none of them. Not one.

Further, the VA scored just above 80 percent for its overall FISMA compliance. With agency scores ranging from 34 percent compliance to barely shy of 100, this puts VA in toward the top of the middle tier - a rather unremarkable position of not being at (or even near) the bottom of the ranks but still needing some work to improve security implementation. 

According to IT security spending reported in the FISMA report (drawn from the Office of Management and Budget’s Exhibit 53B), the VA reported $111.9 million in investments for FY 2012.  While this figure does not capture any off books spending, considering how these funds are allocated sheds some light on where resources are focused. With nearly 90% of IT security spending tied up in personnel costs, funding for upgrades and development of security improvements are likely to rely heavily on non-security programs with embedded security requirements.

Meanwhile, the House Veterans Affairs Committee has directed a number of formal inquiries to VA’s Office of Information Technology. It’s unclear what the questions included in these inquiries aim to achieve. Responding to each question and sub-question amounts to an undertaking that will consume time and resources, pulling personnel away from other projects and tasks to meet the approaching deadline on November 14.  Once the committee reviews the feedback, it may issue recommendations or pose additional questions. In the event that major steps are necessary to correct internal issues, the reality of current resource limitations will be a hurdle.

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

Full Savings Potential Not Being Realized with PortfolioStat According to GAO

Launched in 2012 by OMB to reduced duplicative IT investments and take more advantage of shared services, the PortfolioStat process has not realized full savings potential according to a recent GAO report.

The PortfolioStat initiative requires 26 agencies to conduct an annual agency-wide IT portfolio review to reduce commodity IT spending and demonstrate how their IT investments align with the agency’s mission and business functions. PortfolioStat covers three categories of commodity IT:

  • Enterprise IT systems, which include e-mail; identity and access management; IT security; web hosting, infrastructure, and content; and collaboration tools. 
  • IT infrastructure, which includes desktop systems, mainframes and servers, mobile devices, and telecommunications. 
  • Business systems, which include financial management, grants-related federal financial assistance, grants-related transfer to state and local governments, and human resources management systems.

OMB established seven agency requirements for fully implementing the PortfolioStat review process:  

  • Designating a lead office with responsibility for implementing the process 
  • Completing a high-level survey of their IT portfolio 
  • Developing a baseline of the number, types, and costs of their commodity IT investments 
  • Holding a face-to-face PortfolioStat session with key stakeholders to agree on actions to address duplication and inefficiencies in their commodity IT investments 
  • Developing final action plans to document these actions 
  • Migrating two commodity IT areas to shared services 
  • Documenting lessons learned

According to GAO’s research, only one in 26 agencies has met all seven of the PortfolioStat requirements, which include developing a commodity IT baseline, completing an action plan, and migrating two services to a shared services model.  The chart below shows the number of requirements met by each of the top IT spending agencies.

Generally, all agencies have designated their CIOs as the lead official, completed portfolio surveys and held PortfolioStat sessions.  Few agencies have completed an action plan, developed a commodity baseline, or migrated two services.

GAO estimates that agencies could save at least $5.8 billion through FY15 by addressing 200 consolidation opportunities the identified.  The chart below shows the estimated cost savings by agency for FY13-FY15 if consolidation initiatives were implemented for the 200 investments:

DOD by far presents the most potential for costs savings with the potential for 26 initiatives at $3.2b-$5.3b in potential savings, followed by DHS with 15 initiatives with $1.4 billion in potential savings.

GAO made six recommendations to OMB to further the success of the PortfolioStat initiative: 

  • Agencies fully disclose limitations their CIOs might have in exercising the authorities and responsibilities 
  • Agencies state what actions have been taken to ensure the completeness of their commodity IT baseline information and identify any limitation with this information 
  • Agencies report on the progress of their two consolidation efforts 
  • OMB disclose the limitations of any data reported on the agencies’ consolidation efforts and associated savings and cost avoidance 
  • Agencies report on efforts to address action plan items as part of future PortfolioStat reporting 
  • Improve transparency of and accountability for PortfolioStat by publicly disclosing planned and actual data consolidation efforts and related cost savings by agency  

GAO also made 58 recommendations to 24 of the 26 departments and agencies in their review. 

PortfolioStat stands to save agencies billions in IT spending if fully and thoroughly implemented.  Additionally, agencies will likely need contractor assistance in consolidating and eliminating duplicative IT investments over the next two years.

 

 

 

 

GovWin Recon - November 19, 2013

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

Headlines beginning with an * include quotes from Deltek analysts. 

Sequestration / Budget:

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Big Data / Analytics:

Mobility:

Transparency and Performance:

Contracting / Acquisition:

Legislation:

State and Local:

AEC News:

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

 

What Will DoD Sequestration Cuts Look Like in FY 2014?

The Government Accountability Office (GAO) recently released its Observations on the Department of Defense's Approach to Sequestration in Fiscal Year 2013 and what the report reveals for the future is not encouraging.  According to the GAO, the DoD responded to fiscal 2013 sequestration cuts by reducing spending in some places, reprogramming spending in others, and by utilizing funds that remained from fiscal 2012 to cover shortfalls.  In effect, the DoD waited until the last minute and then implemented a number of short-term measures intended to mitigate the immediate impact of the cuts without dramatically scaling back operations or cutting major weapons systems.  The result of these steps was to postpone some planned equipment maintenance, to reduce some weapon system quantities purchased, and delay some systems development and testing until FY 2014.  All of this was done in the hope that Congress and the President would find a way to reverse the insanity of sequestration cuts.
 
That’s the good news.  The bad news, the GAO reports, is that these same short-term measures will not be available in fiscal 2014, meaning the DoD is now forced to deal with impact of deep cuts in its budget.
 
The implications of this for industry are not pretty.  After years of budgetary expansion, the DoD will be scaling back spending in every area, presumably even in Information Technology.  Cuts in IT are anticipated despite the fact that IT can enable users to “do more with less.”  So, where will the axe fall?  Data contained in the GAO’s report may offer clues.  The following table from the GAO report shows that in percentage terms the DoD’s Procurement and Research, Development, Test, and Evaluation (RDT&E) budgets took some of the hardest hits in fiscal 2013.
 
 
How would this picture look using FY 2014 numbers?  Sequestration cuts approximately $52 billion from the DoD’s base discretionary budget of $527 billion, assuming Congress extends the current Continuing Resolution (in itself a disaster) through all of fiscal 2014.  The cuts effectively reduce the DoD’s FY 2014 base discretionary budget to $475 billion.  Looking at the $37 billion “amount of reduction” above it becomes clear that the DoD will need to cut approximately another $15 billion.  The table below approximates how those cuts will look in 2014 if the DoD applies them in roughly the same proportion as it did in 2013.
 
 
The big accounts for IT vendors to keep an eye on are Procurement and RDT&E.  In this scenario those accounts would experience cuts totaling approximately $22 billion.  Not all of these cuts would fall on IT projects, but it is almost certain that many programs will be affected.  These impacts could range from milestone delays and scaled back program scopes to outright program cancellations.
What can vendors do to mitigate the impact of these cuts on their business?
  • Focus business development efforts on programs already in full swing.  These programs will have incumbents so be prepared to fight hard for a piece of them as support contracts come up for recompetition.
  • Incumbents, prepare to defend yourselves.  Stay in your customers’ back pockets.
  • Concentrate on programs mandated by Congress and/or Executive Order, like business system modernization and data center consolidation.  By law the DoD is required to fund these efforts, making them as close to a ‘sure thing’ as is available in this market.
  • Seek out and capture work related to Programs of Record.  Even PoRs are not guaranteed funding nowadays, but you can probably count on them being first in line if funding becomes available.
  • Communicate how your solution or service can save money.  Areas like systems automation, cloud computing, and, to an extent, big data, should be strong plays.
Most of all maintain a sense of perspective.  Even with the cuts the DoD will be spending tens of billions of dollars on IT in FY 2014.

GovWin Recon - November 18, 2013

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

Headlines beginning with an * include quotes from Deltek analysts. 

Sequestration / Budget:

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Big Data / Analytics:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

State and Local:

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

 

 

GovWin Recon - November 15, 2013

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

Headlines beginning with an * include quotes from Deltek analysts. 

Sequestration / Budget:

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Mobility:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Legislation:

State and Local:

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

 

 

GovWin Recon - November 14, 2013

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

Headlines beginning with an * include quotes from Deltek analysts. 

 

Federal IT:

Agency News:

Vendor News:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Big Data / Analytics:

Mobility:

Waste, Fraud and Abuse:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Mergers and Acquisitions:

State and Local:

AEC News:

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

 

 

GovWin Recon - November 13, 2013

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

Headlines beginning with an * include quotes from Deltek analysts. 

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Big Data / Analytics:

Mobility:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Mergers and Acquisitions:

State and Local:

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

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