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GovWin Recon - August 30, 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:

Big Data / Analytics:

Mobility:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

State and Local:

AEC News:

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

 

 

GovWin Recon - August 29, 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:

Big Data / Analytics:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

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!

 

 

 

GovWin Recon - August 28, 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:

Big Data / Analytics:

Mobility:

Waste, Fraud and Abuse:

Defense / C4ISR / Embedded Technology:

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!

 

 

OMB Offers Guidance for Further Implementation of the Do Not Pay Initiative

Recently, OMB released guidance on further implementing the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) which was signed into law in January.  The legislation is meant to eliminate federal payments to the wrong recipient, payments in the wrong amount, or improper use of payments.                     

The guidance specifically addresses the use of the Do Not Pay List (DNP) by federal agencies and its implementation while protecting individual privacy.  In 2010, the President directed the establishment of a "single point of entry" through which agencies would access relevant data in order to determine eligibility for a federal award or payment.  IPERIA codified the DNP Initiative.

IPERIA directs the Department of Treasury to host a working system (Treasury's Working System) for the DNP Initiative where agencies perform prepayment eligibility reviews.  Treasury’s responsibilities also include entering into Memorandums of Understanding (MOU) with original source agencies and maintaining the central DNP Initiative website.   

The law lists five databases to be included in the DNP Initiative: the Social Security Administration's Death Master File, the General Services Administration's System for Award Management (formerly known as the Excluded Parties List System), Treasury's Debt Check Database, the Department of Housing and Urban Development's Credit Alert System or Credit Alert Interactive Voice Response System, and the Department of Health and Human Services Office of the Inspector General's List of Excluded Individuals/Entities.  IPERIA also gives OMB authority to mandate the addition of databases to DNP through a designated process.   

Paying agencies will only be required to match against relevant databases in the DNP system (e.g., payment-issuing agencies shall not be allowed to match against income data if income is not relevant to the payment or award in question).   

The OMB memo also addresses the inclusion of commercial databases in the Treasury Working System.  Commercial databases may be added to the DNP Initiative when OMB goes through the specified process for adding a database to the system, and the data is sufficiently accurate, up-to-date, relevant, and complete. Additionally, Treasury is required to establish administrative, technical, and physical safeguards to ensure the security and confidentiality of information in commercial databases in use.   

Treasury will be allowed to enter into pilot programs with commercial database providers without satisfying the stringent commercial database use requirements established in the OMB memo.  However, the pilot programs can last no longer than six months and cannot interfere with agency payments to recipients.  

 

DOI’s $10 Billion in Cloud Contracts: It’s a Ceiling, Not a Promise

The recent Foundation Cloud Services award for from the Department of Interior (DOI) stands to shell out as much as $10 billion to ten companies for cloud computing adoption. The high ceiling value of the awards has attracted a lot of attention. While the strategic effort underscores the agency’s focus on changing their IT operations, the potential value may not reflect the investment Interior will be making.
 
According to the FY 2012 Annual Report from DOI’s CIO, the cloud contract awards will support a number of different initiatives:
The Foundation Cloud Service Contract will streamline access to commercial cloud services in support of the Federal Data Center Consolidation Initiative (FDCCI), the Federal Cloud-First policy, the DOI Information Technology Transformation (ITT) Initiative, as well as emerging system owner demand for application and data hosting services. This contract will provide an attractive alternative to purchasing and maintaining hardware and software. Additionally, it will help improve “speed to market” for developing and modernizing applications by providing our developers and system owners with access to computing and storage resources on demand.
 
In short, transitioning the data and applications housed in more than 400 data centers, rooms, and closets to the cloud will improve the operating efficiency of DOI as well as supporting FDCCI goals. In a recent blog, Andrew Jackson, Interior’s Deputy Assistant for Technology, Information and Business Service, wrote:
The approach we've chosen also allows us to speed up our acquisition process, which in turn allows us to leverage this technology more quickly. We can now make our data and applications more accessible to the public, and to DOI employees across the country. We'll also be able to provide a wider variety of services, security solutions, and support than we currently do. 
 
The Foundation Cloud Services awards target a variety of cloud computing services, including storage, secure file transfer, virtual machine, database, web hosting, and a development and testing environment. These initial service offerings address the agency’s most urgent requirements and will be the building blocks for future service developments. To this end, ten different vendors were selected for the IDIQ awards, listed below.
 

 
 
Individual projects are expected to be competed among the awardees and assigned via task order. One of the aims of compiling a pool of ten vendors is to produce more competitive and innovative offerings. The first task order was awarded in June to Unisys for migrating DOI’s Financial and Business Management System (FBMS) to the cloud. Under the $44 million arrangement, the transition will occur over the next eight years, helping to reduce the costs of the enterprise resource planning system (ERP).
 
Budget Environment
Under recent budget pressure across the federal IT market, we’ve seen reductions in contracts, increased performance scrutiny, and more judiciousness around investment decisions. Although DOI’s total discretionary budget request for FY 2014 amounted to $11.4 billion, less than a tenth of which goes toward IT, contractor addressable spending that’s decreased in recent years. The current budget environment suggests these spending patterns are likely to endure for some time.
 
Although it does not capture the entirety of the agency’s IT spending, Department of Interior’s 2014 IT budget totals $1012.9 million. The department completed business cases for forty-five major programs with a combined total of $974.15 million, just over 96 percent of the amount accounted for in the IT budget. Of those funds for major programs, approximately 61.2 percent is directed to either operations and maintenance (O&M) or development, modernization, and enhancement (DME). Also, fourteen of those major programs, totaling around $85.8 million in FY 2014 spending, are expected to conclude by 2018. Starting with a relatively modest IT budget, DOI expects expediting their move to the cloud to save DOI $100 million annually from 2016 to 2020. Unless, DOI foregoes legacy system operations in favor of devoting all of their IT budget to cloud adoption, it unlikely that these contracts will approach their ceilings.
 
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’s worth noting that only four of these vendors have completed the Federal Risk and Authorization Management Program (FedRAMP) process and received authority to operation (ATO) from the FedRAMP Joint Authorization Board. These vendors are AT&T, Autonomic Resources, CGI Federal, and Lockheed Martin. All of the accredited offerings are for Infrastructure as a Service models.

What Will the Impact of Sequestration be on Defense-Wide Budget Accounts?

August feels different this year.  Late summer in DC is typically slow, but it is also filled with anticipation for an uptick in business activity the final month of the federal fiscal year.  This year, however, is filled with complications.  When Congress kicked the can of divisive budgetary matters to the September-October 2013 timeframe, it made sure that the end of the summer would be hot with simultaneous debates about the debt ceiling, enacting sequestration, and the 2014 budget.  As a result, this August feels more like Groundhog Day than it does the end of a sleepy DC summertime.  The issues facing Congress have become so onerous that House Speaker John Boehner has already thrown in the towel and called for a short-term Continuing Resolution.  Surely no one will be surprised if/when Boehner’s brief CR is extended once Congress finds that it cannot rise above partisan lines to agree on a FY 2014 budget.

Because no one knows what the budget picture will look like in FY 2014, Deputy Defense Secretary Dr. Ashton Carter issued a memo in late May instructing the DoD to prepare for three separate budget scenarios: 1) operations at funding levels requested in the President’s FY 2014 budget request, 2) operations at 5% below those levels, and 3) operations at 10% below those levels.  The third scenario takes into account a cut of $50 billion due to sequestration.  Unlike FY 2013, the ‘good news’ this year is that the DoD will have the flexibility to choose where the cuts fall (vs. the uniform percentage cuts across budget accounts required for FY 2013).  Commanders and agency heads across the department are therefore looking at program portfolios to determine what should stay and what must go.

Where Are Cuts Likely to Fall?

Those of us outside the process have no idea which programs are vulnerable.  The best we can do is look at the budget accounts where DoD tends to spend the most and those that fund “programs of record” that tend to be mission critical and take an educated guess about the areas that might be most susceptible.  In today’s post I take a look at Defense Agency spending only, not spending by the Military Departments.  To do this analysis I am relying on Federal Procurement Data System (FPDS) obligations data that I have parsed by Defense-Wide budget accounts.  The data spans obligations over fiscal years 2011-2013, with the data for 2013 being only partially reported.

As the graphic below shows, the three largest accounts are the Defense Working Capital Fund (DWCF) with $95 billion, Defense-Wide Operations and Maintenance (O&M) with $42 billion, and Defense-Wide Research, Development, Testing and Evaluation (RDT&E) with $19 billion in obligations respectively.  Beyond these three accounts the nominal amounts available for cutting dwindle rapidly.  Reducing the Defense Working Capital Fund is a non-starter because these funds are generated by services provided to Defense customers.  It goes without saying that DWCF levels will also be falling in the years to come as Defense customers have less to spend.  This leaves Defense-Wide O&M and RDT&E as the likely major targets for budget cuts in FY 2014 and beyond.  Budgets for procurement and Defense Health Programs are sure to be cut as well, but I think the axe will fall heaviest on the Defense-Wide O&M and RDT&E budget accounts.


Top 10 Major Programs Funded through the Defense-Wide O&M Budget Account

Assuming Defense-Wide O&M is most susceptible to cuts, which contracts under this budget account are vulnerable to sequestration based on historical spending?  The chart below shows the top 10 contracts/contract vehicles by obligations that fall under this budget account.
 

As we can see, Encore II and SeaPort-e figure prominently.  This suggests that active orders awarded through both vehicles have the potential to see spending cuts and cancellations as sequestration begins to bite.  The Northrop contract for Joint Warfighting Center support is another case altogether.  This contract was extended in March 2012, ostensibly to provide time for the follow-on Enterprise Joint Training Support contract to be competed.  The competition for EJTS is now in source selection.  One wonders if once this contract is awarded it will see only a trickle of business flow through it.  Finally, the DSTS-G contract held by DRS has been replaced already by the GSA/DISA Future Commercial Satcom contract. 

Top 10 Major Programs Funded through the Defense-Wide RDT&E Budget Account

Looking at vulnerable contracts/contract vehicles from the perspective of potential cuts to the Defense-Wide RDT&E budget account yields more bad news for active efforts under SeaPort-e and Encore II.  In addition, some efforts under the Army’s Information Technology Enterprise Solutions – Services 2 (ITES-2S) and S3 vehicles could also see funding cuts and cancellations.  Keep in mind that we are talking about active efforts in most cases that are still funded through the RDT&E budget account.  The other thing to consider is a decrease in the number of contracts procured through these vehicles.  If yet-to-be competed contracts are ultimately dependent on RDT&E dollars, then they are likely to not be competed at all.
 

Although I’ve mentioned a few large vendors doing business with Defense Agencies, I don’t mean to pick on them specifically.   The reality is that big programs and high spending make big targets in this environment, and unfortunately the vendors attached to those programs tend to rise to the top of the statistical heap.  All vendors whose contracts are funded through the O&M and RDT&E budget accounts are very likely to see reduced obligations in the years to come.  The question is how much and what vendors will do to mitigate the impact.

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

 

 

GovWin Recon - August 27, 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:

Health IT:

Mobility:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

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!

 

 

 

 

 

GovWin Recon - August 26, 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:

Big Data / Analytics:

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!

 

 

GovWin Recon - August 23, 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:

Mobility:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

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 - August 22, 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:

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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