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FAA’s NextGen Remains a Winner in Fiscal 2015 Budget Request

The Federal Aviation Administration, a perennial “winner” when it comes to appropriations, is slated to once again receive nearly $1 billion in funding for work related to the Next Generation Air Transportation System (NextGen).  The president’s budget request for the FAA actually works out to $836 million, plus an additional $186 million if Congress also chooses to fund the so-called “Opportunity, Growth, and Security Initiative” for the Department of Transportation.  One billion dollars per fiscal year is a lot of money under good circumstances.  In the context of the United States’ currently dire fiscal condition, it is an eye-popping amount

What has the DOT/FAA been doing with this annual budgetary largesse, generally untouched even in the face of sequestration?  Falling behind schedule and making bad business decisions, according to a recent audit by the DOT’s Office of the Inspector General.  To quote from the report “While FAA is making progress with elements of NextGen, [its] work continues to find longstanding problems with cost increases, schedule slips, and performance shortfalls.”  Some specific problems cited in the report include:

  • Failing to make “key Enterprise Architecture decisions … such as investments needed for a NextGen weather-related system that was scheduled for 2010.”
  • Failing “to develop an executable implementation plan that addresses costs and technology development and integration.”
  • Allowing the production schedules of “key modernization projects … needed to implement NextGen capabilities” to slip.

The result of these “challenges” is that members of the aerospace industry are becoming increasingly skeptical of spending money on the installation of NextGen electronic components in their aircraft given the lack of clear benefits to do so.  This is a remarkable observation considering NextGen has been touted for years as the future of air travel in the United States.

The picture that emerges from the OIG audit is not uniformly bleak.  In fact, for IT providers there is considerable opportunity in the FAA’s chaos.  NextGen schedule slips suggest the potential for more contractor work in the future and if the government is going to continue throwing close to $1 billion at the problem, who are industry partners to complain? 

For example, the longer NextGen systems remain under development, the longer legacy National Airspace System components will require sustainment.  The DOT proposes to fund the FAA’s NAS Sustainment Strategy to the tune of $370 million in FY 2015 “to reduce some of FAA’s multi-billion dollar maintenance backlog.”  Therefore, what we are really talking about in FY 2015 is a total of $1.37 billion for NextGen/NAS sustainment funding.

Finally, if all this screams legacy contract recompetition to you, then we’re on the same page as the DOT OIG.  To again quote from the report, the “FAA will need a sufficient workforce to manage FAA’s increasing acquisition workload.”  By my count there are at least 7 NextGen/NAS related contracts expiring by the end of FY 2015.


Of these contracts, two stand out – the ERAM support contract held by Lockheed Martin and the System Wide Information Management (SWIM) System Engineering and Business Support Services contract held by the North Star Group.  The ERAM contract deserves attention because it is by far and away the largest of the contracts listed and because the implementation of ERAM has experienced repeated delays over the years.  The SWIM support contract is worth knowing because the SWIM system is the SOA-based information sharing interface that sits at the center of NextGen.  Obviously, the others are worth having on the radar as well.  It’s just that these efforts stand out to me more than the others.

 

 

GovWin Recon - March 19, 2014

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:

Health IT:

Big Data / Analytics:

Mobility:

Transparency and Performance:

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!

 

 

UPDATED 3/18: Which state health insurance exchanges are failing?

Most of the national discussion regarding health insurance exchanges (HIXs) has centered on the federal exchange. However, most of the state exchanges have faced varying amounts of technical difficulties. The chart below provides the status of each exchange based on Deltek research over the last two weeks. For more information on the trends behind the state HIX market, see Deltek's latest report. The latest updates to the chart below are marked with an asterisk (*). 

State Site Status Notes
California* Operational The site was recently down for five days, but the problem was ascribed to a maintenance malfunction rather than a systemic flaw.  A security flaw was fixed relating to the exchange's access to central federal databases.  The site has passed the 1 million enrollment mark.
Colorado* Operational No publicly reported issues.  The exchange has the fourth highest enromment rate among state-operated exchanges.
Connecticut* Operational As of 2/24, the site was in good enough order that the exchange operator was considering becoming an application service provider (ASP) to other states.  Maryland is considering adopting this exchange to replace its failed implementation.
District of Columbia* Operational The District dealt with "hundreds" of problem applications and other minor technical glitches during rollout.  Enrollment figures for this exchange are significantly below the target figure, but it is unclear as to what extent technical problems are to blame.  The exchange recently extended the agreement with its contractor for follow-on work.
Hawaii* Failing The site has remained plagued with difficulities that might prevent the non-profit entity that oversees it from achieving sustainable funding.  The state might have to take over the exchange in order to maintain operations.  Exchange CEO quit during rollout.
Kentucky* Operational No publicly reported issues.
Maryland* Failing Maryland is considering adopting Connecticut's exchange to replace its failed implementation.  A recent report detailed the costs of the exchange.  U.S. HHS's Inspector General will be investigating the exchange.
Massachusetts* Failing Problems during rollout were so severe that the state opted to turn off certain backend software functionality and perform manual workarounds to enroll citizens.  The state has fired its contractor and will seek another extension to the federal enrollment deadline.
Minnesota* In remediation Severe enrollment backlogs continue and the state was slow to address call center capacity.  Manual workarounds are the backbone of the system for now.  The state may seek a new contractor.
Nevada* Failing Insurers, brokers, and service providers have found the site unusable.  Publicity has become so bad that the governor has had to personally pressure the contractor for action.  Consultants have been hired to help develop a remediation plan before the 2015 open-enrollment period begins.  The exchange CEO quit in February.
New York* Operational The site was overwhelmed in December, but no other issues have been publicly reported.  The site is experiencing a last-minute enrollment surge.
Oregon* Failing The state has considered a host of political and technical fixes to the exchange in an effort to salvage the system, but it is not expected to be operating before the enrollment deadline.  U.S. GAO will be investigating this exchange.
Rhode Island* Operational No publicly reported issues.  The state is providing a social media tool for parents to nag their children into signing up for insurance via the exchange.
Vermont* Failing The site has suffered from several failings since its launch with the latest being the failure of the payment engine for small businesses seeking to acquire insurance for employees.  The state halted funding to its contractor in late December until fixes are completed.  Online payment has been added to the site, but fundamental operational failures linger.
Washington* In remediation The site was down in early December.  Officials claim that the state is still working on the website and call center, which are both open for business.  Thousands of enrollees have been stuck in the exchange, but it is operating.

 Source: Deltek (as of March 18, 2014)

Updates:

  • 2/4: NV downgraded from "Operational" to "Failing"
  • 2/4: Updated info for MN
  • 2/25: CT upgraded from "In remediation" to "Operational"
  • 2/25: Updated info for CA and MD
  • 3/18: Updated info for all states.
  • 3/18: DC upgraded from "In remediation" to "Operational"
  • 3/18: WV (partnership exchange) removed from table.

DHS FY 2015 IT Budget Request Snapshot

Last week the White House released its fiscal year (FY) 2015 budget request and we looked at the high points of the top ten departments. This week I want to look a focus on bit more closely at the Department of Homeland Security (DHS) and specifically its proposed information technology (IT) budget.

The submission of the federal fiscal year (FY) 2015 budget request to Congress provided an opportunity for some broad observations, data points, opinions, and analysis as we tried to get an immediate sense of direction and priority across the various areas of government. Digging specifically into the DHS IT budget gives a sense of where the dollars are directed to flow in the next year and what are the highest priorities.

DHS IT and New Development Budgets

For starters, a basic slice of the DHS IT budget identifies how the department is allocating its $5.8B in proposed budget across the directorates. Their overall IT budget is essentially flat from the FY 2014 level, which had received a $470M increase (+9%) over FY 2013 in the midst of budget turmoil and sequestration concerns. So as we often say around GovWin FIA, flat is the new up.

The year-over-year changes for the various directorates and agencies are fairly diverse, ranging from -40% to +15%. (See table below.) Further, looking at the portion of each agency’s allocation for new development spending, known as Development, Modernization and Enhancement (DME), also has a wide variety in change from 2014 to 2015. Note that growth or decline in agency total IT budget does not always correspond to the same in DME spending, e.g. the TSA, ICE, and the central DHS IT budget.  In the case of FEMA, a 4.3% overall increase comes with a 37% increase in DME.


 

Noteworthy IT Programs . . . by the Numbers

Looking at the details of DHS’s specific IT investments and initiatives gives even more insight.  Here are just five initiatives that stand out among others due to relative size, budget growth, and/or proportion of new development spending.

  • ICE - IT Infrastructure – IT Infrastructure is comprised of 10 sub-programs with multiple systems that serve to enhance ICE's technology foundation, maximize workforce productivity, secure the IT environment, and improve information sharing across ICE & DHS. At $234M for FY 2015, this program is the fourth largest IT initiative in the DHS IT budget and receives a boost of $44M (+23%). All spending is classified as O&M.
  • CBP - Automated Commercial Environment (ACE) – ACE is a Web-based portal that will consolidate seven systems into a single window to execute all stages of the import/export trade cycles for CBP, PGA, and the Trade.  It includes account management, revenue management, and enforcement. ACE is in the top ten largest IT initiatives for DHS at $141M and receives the third largest increase in DME spending for FY 2015 of +$26M to bring the overall DME budget to $46M, a full 33% of the total budget for next fiscal year.
  • NPPD - Next Generation Networks Priority Services (NGN-PS) – The NGN Priority Services program is to transition Priority Telecommunication Services from circuit-switched technologies to Internet Protocol packet-switched technologies and to examine the prioritization of other packet-based communication technologies. NGN-PS is slated to receive nearly $70M for FY 2015 with an increase of $48M, 100% of which is designated as DME. This makes it the DHS initiative to receive both the largest budget increase as well as the largest DME increase over FY 2014.
  • CBP - Remote Video Surveillance Systems (RVSS) – The RVSS systems consist of day night cameras attached to fixed towers which allow the Border Patrol to monitor border activity through video transmissions to a control room. This investment is targeted to receive a$30M (+173%) budget increase to $48M for FY 2015. DME of $49M represents 93% of the program’s budget.
  • USCIS - Transformation    – USCIS has embarked on an enterprise-wide Transformation Investment that is transitioning the Agency from a fragmented, paper-based environment to a paperless, centralized environment, utilizing electronic processing for adjudication. At $177M the initiative is another of the DHS “top ten” IT investments for FY 2015 and although it receives a nominal budget increase of about $1M from FY 2014 it is among the highest percentage DME among the top ten programs at 83%.
After seeing a total IT budget growth from $5.3B to $5.8B (+9%) from FY 2013 to FY 2014, the DHS IT budget for FY 2015 has settled in for another year at $5.8B. Further, overall DME spending for FY 2015 is down 6.5% from the previous year, suggesting competition for new work may tighten for several key programs as more work shifts to O&M efforts.

DoD and VA EHRs: Is interoperability the answer and will it be achieved?

Earlier this month, GAO released a scathing report regarding DoD and VA’s progress, or lack thereof, toward interoperable electronic health record (EHR) systems.  The February report advises VA and DoD to substantiate claims that developing and maintaining two separate EHRs that share data is the most cost effective solution to achieving interoperability for military and veteran health records. 

DoD and VA started an effort in 1998 to share electronic patient health information.  In 2011, they launched a program to develop a single common electronic health record system (iEHR).  The new system was to be implemented across both departments by 2017.  The iEHR program was to be managed and led by the interagency program office (IPO) that was established in 2008 to facilitate information sharing initiatives across the departments.  The IPO estimated the cost of the iEHR would total $29 billion for 2013-2029, $9 billion for the acquisition and $20 billion for maintenance. 

In February 2013, both departments publically announced they were abandoning efforts to jointly develop a single EHR, due to new cost estimates of $12 billion versus original estimates of $4-$6 billion.  Instead, the departments would acquire, implement, or update their own EHRs, but achieve full interoperability among the two separate systems.  DoD and VA claimed that the new interoperability approach would be more cost effective to achieve the same goals of sharing patient data.

GAO’s recent report states that DoD and VA have yet to demonstrate that the new approach will be more cost effective or timely than the single-system approach.  Additionally, the departments have not developed revised cost and schedule estimates for the new interoperability strategy.  Absent this thorough analysis, VA and DoD have continued to march forward in pursuing new individual EHR systems.  VA has launched a program called VistA Evolution to enhance its current VistA EHR system by adding two enhanced clinical capabilities which are to be deployed at two VA sites by the end of FY 2014 and deployed fully across the department by the end of FY 2017.  

DoD plans to acquire a new EHR to replace its current AHLTA system.  The initial RFP for the DOD Healthcare Management System Modernization (DHMSM) was released in January 2014 and a final RFP is planned for release in July.  DoD plans to reach initial operating capability in the 4th quarter of FY 2106.  The DHMS Program Executive Officer is to develop a health data-sharing and interoperability road map that is to address interoperability with VA, private health care providers, and patients.  The roadmap will be delivered to DoD management this month.

GAO has been monitoring DoD and VA’s efforts to share patient electronic health information for the past 15 years.  GAO has consistently recommended that both departments address pervasive and persistent management challenges that hinder achieving full interoperable electronic health record capabilities.  Collaboration between VA and DOD has been hindered by long-standing barriers and ineffective implementation of the IPO.

GAO recommends that DoD and VA compile and compare costs for current and former EHR approaches.  Additionally, GAO recommends that both departments develop a plan for interoperability and grant the IPO necessary authority and resources to carry out the initiative.  VA and DoD concurred with GAO’s recommendations.  

 

GovWin Recon - March 18, 2014

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:

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 - March 17, 2014

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:

Mergers and Acquisitions:

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 - March 14, 2014

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!

 

 

 

 

GovWin Recon - March 13, 2014

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:

Transparency and Performance:

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 - March 12, 2014

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:

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!

 

 

 

 

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