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OMB Says No Sequestration for FY 2015

It’s official! The Office of Management and Budget (OMB) has announced that for fiscal year (FY) 2015, federal agencies will not have to worry about sequestration-related budget cuts. That’s now two years in a row that sequestration has been removed from the radar.

In their latest sequestration update report to Congress, OMB provides their analysis as to why agencies have dodged the sequestration bullet as laid out in the 2011 Budget Control Act (BCA). The report was recently addressed in a Federal News Radio article.

The biggest reason agencies are not feeling quite the same sequestration pressure is because Congress worked out a deal back in 2013 to this effect.  Under the two-year Bipartisan Budget Act (BBA) of 2013, which covered FY 2014 and FY 2015 budget levels, agencies were subject to smaller reductions in the spending caps in 2015 than originally set forth in the BCA.

In the report OMB shows that the defense discretionary budget for FY 2015 of $585.9 billion is down more than $20 billion from FY 2014’s $606.3 billion level, but is coming in right at the revised spending limit under the BBA.  In the non-defense discretionary spending category, federal departments and agencies could spend up to $514.1 billion under the BBA for FY 2015, which would be an increase of more than $9 billion from the $504.8 billion level in FY 2014. However, Congress appropriated nearly $4 billion less than the overall BBA limit for FY 2015. (See table below.) 


Given that Congress has the Department of Homeland Security (DHS) operating under continuing resolution (CR) until mid-February it is possible that some of this budget breathing room will be used when Congress finishes its DHS appropriations bill in the coming weeks.

Implications

As law, the “sequestration ball” remains in the hands of Congress to determine how to move forward. OMB recognizes that “the BBA restored $22.4 billion each ($44.8 billion in total) to the 2014 defense and non-defense categories and replaced the reductions for 2015 that would have taken place with smaller reductions of $44.7 billion to the defense cap and $27.6 billion to the non-defense cap.”  So Congress provided some budgetary relief and breathing room without completely overturning sequestration rules set in the 2011 BCA.

The big question is whether Congress will take similar action for FY 2016 and beyond, or possibly even remove the BCA caps all together – a possibility that remains unclear with the increase in Republican majority in the House and a new Republican majority in the Senate. One thing seems certain. Unless the Congress takes actions similar to the 2013 BBA the sequestration reductions in the BCA will remain the discretionary caps for 2016 through 2021. That will surely color the debate over the FY 2016 budget which was just released this week.

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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 me on Twitter @GovWinSlye.

 

State of the Union – Potential Opportunities and Impacts for Federal Contractors

In Tuesday night’s State of the Union address, President Obama highlighted issues and initiatives he hopes to tackle in his last two years in office such as improving “middle-class economics,” building U.S. infrastructure, and increasing cybersecurity.  

Reading between the lines we can attempt to predict the impact some of these initiatives may have on the federal contracting community.

The potential upside for federal contractors:  

  • Obama’s plan to improve infrastructure in the form of trains, bridges, ports, and internet speed and access could provide opportunities for heavy construction and IT contractors. 
  • Strengthening cybersecurity efforts may provide companies with additional opportunities to sell cybersecurity services and solutions to the federal government, as well as the commercial market.  
  • Easier, more affordable access to higher education and increased training will provide employers with a larger, better trained labor pool. 
  • The president’s Precision Medicine Initiative may provide contracting opportunities in the area of health IT, health informatics, medical research, medical technology, and medical devices. 
  • Revisions to the tax code may adversely or positively impact contractors and other companies depending on specifics of proposed tax code changes.  
  • The president’s commitment to continue to fight terrorism may provide opportunities for defense contractors. 
  • Obama’s statements about surveillance and privacy allude to continued funding for intelligence agency surveillance programs, but with emphasis on simultaneously safeguarding citizen privacy.  

The potential downside for federal contractors:  

  • Obama’s call for higher wages in the form of equal pay for women and increasing the minimum wage, may negatively impact companies’ profitability.  
  • The appeal for guaranteed paid sick leave for all employees may place a financial burden on small businesses.  
  • Potential new cybersecurity legislation could impose additional security requirements for federal vendors and service providers.  
  • Revisions to the tax code may adversely or positively impact contractors and other companies depending on specifics of proposed tax code changes. 

The President’s FY 2016 Budget Request, due for release in less than two weeks, will bring to light many of the proposals and initiatives mentioned in the State of the Union address, and is rumored to contain a substantial increase over current year budget levels.

For detailed budget information and federal contractor impacts, watch for Deltek’s future analysis of the President’s FY 2016 Budget Request in the coming weeks.

 

DHS Would Get a $400 Million Boost for the Rest of FY 2015 Under House Bill

While most federal departments received their final fiscal year (FY) 2015 appropriations in mid-December, the Department of Homeland Security (DHS) was put in a funding holding pattern by the last Congress. Now, the new 114th Congress is in session and the U.S. House of Representatives has moved forward on a funding bill for the department.

In December, Congress passed an FY 2015 omnibus that funded all federal departments through the rest of the fiscal year, ending on September 30, except for DHS, which was funded with a continuing resolution (CR) until February 27, 2015. 

Now, with the DHS CR set to expire in a few weeks, the House has approved a FY 2015 Homeland Security Appropriations bill which would fund DHS through September, provided the Senate can move forward on a comparable version and the two chambers can reconcile a final bill to send to the president by the deadline.

The House bill, H.R. 240, provides a total of $39.7 billion in discretionary funding, which is an increase of $400 million (+1%) over the FY 2014 enacted level of $39.3 billion, which itself was a billion dollars more than White House requested in the FY 2015 budget. If enacted, the $37.7 billion would constitute more than a 3.5% increase over what the president requested for this fiscal year.

The bill and the accompanying Explanatory Statement provide details into agency funding and some specific IT investments areas.

  • Office of the Chief Information Officer (OCIO) – $288.1 million, of which $189.1 million is multi-year money available through FY 2016. The $288.1 million is $31 million over the FY 2014 enacted level. An additional $1 million is provided for the DHS Data Framework initiative and an additional $500 thousand is provided for cyber remediation tools.
  • Cybersecurity – The bill includes a total of $753.2 million for cybersecurity operations in the National Programs and Protection Directorate (NPPD). An additional $164.5 million is provided for NPPD Communications and $271 million for infrastructure protection programs, for an aggregate total of $1.19 billion. Cybersecurity workforce funding of $25.9 million is provided for Global Cybersecurity Management, of which at least $15.8 million is for cybersecurity education.
  • Science and Technology – $1.1 billion, $116.3 million below the FY 2014 enacted level, but $32.1 million above the president’s request. This includes $973.9 million for Research, Development, Acquisition, and Operations.
  • Customs and Border Protection (CBP) – $10.7 billion, an increase of $118.7 million above the FY 2014 enacted level. Of this, a total of $808.2 million is provided for Automation Modernization efforts for TECS, Automated Commercial Environment (ACE), International Trade Data System (ITDS) and others. The bill slates $382.5 million for Border Security Fencing, Infrastructure, and Technology (BSFIT).
  • Immigration and Customs Enforcement (ICE) – $5.96 billion, an increase of $689.4 million over the FY 2014 enacted level. IT funding includes $3.5 million to support enhancements to the PATRIOT system for visa vetting
  • Transportation Security Administration (TSA) – $4.8 billion, a decrease of $94.3 million below the FY 2014 enacted level. Technology provisions include $334 million for Explosives Detection Systems (EDS) Procurement and Installation, of which $83.9 million is discretionary funds. The bill also includes $449 million for Transportation Security Support IT and $295 million for Screening Technology Maintenance.
  • Coast Guard – $10 billion, $159 million below the FY 2014 level but $439.5 million above the president’s request, including $2.5 million to restore cuts to USCG information technology programs.
  • Citizenship and Immigration Services (CIS) – $124.4 million in discretionary appropriations is provided for the E- Verify program.
  • Federal Emergency Management Agency (FEMA) – $934.4 million for Salaries and Expenses, down $12.6 million from the FY 2014 enacted level. The bill allows for $7 billion for disaster relief and $2.5 billion in first responder grants, including $1.5 billion for state and local grants; $680 million for Assistance to Firefighter Grants, and $350 million for Emergency Management Performance Grants.
  • Secret Service – $1.7 billion, an increase of $80.5 million above the fiscal year 2014 enacted level. This includes $21.5 million to begin preparation and training for presidential candidate nominee protection for the 2016 presidential election, including for protective vehicles and communications technology. It also includes $45,6 million for investments in Information Integration and Technology Transformation programs.

As anticipated, the House bill restricts the use of funds for controversial White House immigration measures. The House Appropriations Committee Report that accompanies the bill includes an amendment stipulating that no funds, resources, or fees provided to DHS may be used to implement the immigration policy changes that the president initiated last fall.

The ball is now in the hands of the Senate Appropriations Committee (SAC), which has just solidified and announced committee chairs after the leadership change resulting from last November’s election. The Homeland Security subcommittee will need to quickly move their bill forward from the last committee action last summer if they hope to make the February 17 deadline, so the clock is ticking.

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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 me on Twitter @GovWinSlye.

 

Congress Passes FY 2015 Funding – Defense Highlights

The U.S. Congress passed an omnibus funding bill for the remainder of fiscal year (FY) 2015 that includes $1.1 trillion in total in discretionary federal funds, roughly half of which goes to the Department of Defense (DoD).

Federal News Radio reported that the Senate voted 56-40 late Saturday for the bill that will fund most agencies through September, the end of FY 2015. The House of Representatives had voted two days earlier on the spending measure, passing it 219-206.

The final bill removes concerns over the possibility of government shutdowns for the rest of the fiscal year and address funding for each of the agencies covered under the twelve individual appropriations bills that traditionally make their way through Congress. The only exception in full-year funding is the Department of Homeland Security, which is funded by at continuing resolution (CR) levels through Feb. 27, 2015, due to congressional concerns over White House immigration plans. Future funding will be taken up by the next Congress.

Department of Defense

This omnibus provides total FY 2015 funding for DoD set at $553.9B – about 50% of the $1.1 trillion bill – including $490.2B in base budget and $63.7B for Overseas Contingency Operations (OCO). The $490.2B base budget is $3.3B more than the enacted FY 2014 base level of $486.9, but $5.4B less than the president’s FY 2015 budget request of $495.6B.

The following is a high-level breakout of the funding levels provided for DoD in the Consolidated and Further Continuing Appropriations Act, 2015.

Department of Defense Observations

Procurement

  • Overall – $93.8B up just $900M from FY 2014 enacted level and $4.1M over the FY 2015 budget request
  • Defense-wide Chem-Bio Situational Awareness – $184M in procurement, up $14M over request
  • Navy CANES – $336M, down $22M from request of $358M due to delays and NGEN ES is set at $106M, off $10M from the FY 2015 request due to tech refresh growth, in procurement budget
  • Air Force GPS III Space Segment – $87M, up $30M from budget request to fund advance procurement
  • Air Force AFNET transfers $15.6M to the Information Transport System program; AFNET budget was reduced an additional $15.6M
  • Air Force Mobility Equipment – $13M, a marginal $2.5M increase over budget request
  • Information Systems Security Program -- $33M increase over president’s FY 2015 request – $20M in Procurement budget, $13M more in RDT&E

RDT&E

  • Overall – $63.7B, $700m over the FY 2014 enacted level and $179M more than requested
  • Defense-wide – $225M for the new Defense Rapid Innovation Fund
  • DoD High Performance Computing Modernization Program – $221.6M, $40M more and a 22% increase over the FY 2015 president’s request
  • Navy University Research Initiatives – $134M, a $20M increase over budget request
  • Navy Defense Research Sciences Program – $497M, an increase of $53.5M over budget request
  • Navy New Design SSN – $88M with a $15M increase for small business tech insertion
  • Army Integrated Military Human Resources System, $68.5M, a $70M reduction from the $138M budget request

O&M

  • Overall – $161.7B, up from the FY 2014 enacted level of $160B, but down $4.3B from the $166B request
  • Defense Logistics Agency - $385.4M, an addition of $12M over the budget request of $381.5M for DLA’s Procurement Technical Assistance program
  • $10M for insider threat detection enhancements
  • Marine Corps Facilities Sustainment, Restoration, and Modernization - $631M, an addition of $57.4M over requested budget.
  • Air Force Facilities Sustainment, Restoration, and Modernization - $1.45B (15 Req.), $1.6B (15 Omnibus). $145M increase.
  • Army Facilities, Sustainment, Restoration, and Modernization Budget - $2.4B, $400M over $2B request
  • Army Service-Wide Communications Budget - $1.6M, a $13M reduction from budget request attributable to less funding needed than assumed for the Integrated Personnel and Pay – Army (IPPS-A) program

The FY 2015 National Defense Authorization Act (NDAA) that was passed by both the House and Senate around the same time as the omnibus had authorized $521.3B in base discretionary spending, but Congress ultimately provided $31.1B less in actual funding in the Omnibus appropriations. See a previous entry for more information on the NDAA and its IT management and acquisitions implications.

Check out our Civilian Highlights in the FY 2015 Omnibus.

Fellow GovWin Federal Industry Analysis (FIA) analyst Alex Rossino contributed to this entry.

 

Congress Passes FY 2015 Funding – Civilian Highlights, Part 1

The U.S. Congress passed an omnibus funding bill for the remainder of fiscal year (FY) 2015 that includes $1.1 trillion in total in discretionary federal funds, roughly half of which goes to federal civilian departments and agencies.

Federal News Radio reported that the Senate voted 56-40 late Saturday for the bill that will fund most agencies through September, the end of FY 2015. The House of Representatives had voted two days earlier on the spending measure, passing it 219-206.

The final bill removes concerns over the possibility of government shutdowns for the rest of the fiscal year and address funding for each of the agencies covered under the twelve individual appropriations bills that traditionally make their way through Congress. The only exception in full-year funding is the Department of Homeland Security, which is funded by at continuing resolution (CR) levels through Feb. 27, 2015, due to congressional concerns over White House immigration plans. Future funding will be taken up by the next Congress.


 

Department Highlights

Energy

Department of Energy funding of $27.9B supports programs across the department’s five primary mission areas: science, energy, environment, nuclear non-proliferation, and national security.

  • National Nuclear Security Administration (NNSA): Funding for NNSA sees an increase of $200M over FY 2014 levels to maintain the safety, security, and readiness of the nation’s nuclear weapons stockpile. This increase brings NNSA’s funding to $11.4B for FY 2015.
  • Funding includes $8.2B for weapons activities as well as $1.2B for naval reactors. Advanced simulation and computing efforts receive $598.0M, including $50.0M for activities related to the exascale initiative.
  • Energy Programs: Support for programs that encourage U.S. competitiveness drive an increase of $22M over FY 2014 enacted levels, bringing funding for Energy Programs at DOE to $10.2B.
  • Science Research: Funding for energy science research is maintained at FY 2014 levels, providing $5,071M to strengthen innovation and support basic energy research, development of high-performance computing systems, and exploration into next generation clean energy solutions.
  • Advanced Research Projects Agency-Energy (ARPA-E): The advanced research organization ARPA-E receives $280.0M, $45M below the level requested for FY 2015.

Commerce

Department of Commerce funding of $8.5B marks an increase of $286M above the level enacted for FY 2014.

  • Patent and Trademark Office (PTO): $3,458M for the U.S. Patents and Trademark Office, the full estimated amount of offsetting fee collection for FY 2015. The Patents and Trademark Office had nearly $651M in unobligated balances at the end of FY 2014.
  • National Institute of Standards and Technology (NIST): $675.5M for the scientific and technical core programs at the National Institute of Standards and Technology (NIST).
    • This amount includes $15M for the National Cybersecurity Center of Excellence and up to $60.7M for cybersecurity research and development.
    • National Initiative for Cybersecurity Education receives $4M. These funds also provide $16.5M for the National Strategy for Trusted Identities in Cyberspace (NSTIC), which includes up to $6M for the lab-to-market program and up to $2M for urban dome programs.
  • National Oceanic and Atmospheric Administration (NOAA): $5,441M for the National Oceanic and Atmospheric Administration (NOAA). This amount includes $3,333.4M for coastal, fisheries, marine, weather, satellite, and other programs.
  • Census Bureau: $1,088M for the Bureau of the Census, which includes $840M for periodic censuses and programs.
  • International Trade Administration: $472M in total program resources for the International Trade Administration. $10M of those funds are expected to be offset by fee collection, resulting in a direct appropriation of $462M.  Of those funds, up to $9M ins for the Interagency Trade and Enforcement Center, up to $10M is for SelectUSA, and Global Markets are funded at levels at least equal to FY 2014.

Go to Part 2 of Civilian Highlights, or check out our Defense Highlights of the FY 2015 Omnibus here.

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

Congress Passes FY 2015 Funding – Civilian Highlights, Part 2

The U.S. Congress passed an omnibus funding bill for the remainder of fiscal year (FY) 2015 that includes $1.1 trillion in total in discretionary federal funds, roughly half of which goes to federal civilian departments and agencies. In part 2 we’ll look at HHS, DHS, Justice and State.

Read our Civilian Highlights, Part 1.

Health and Human Services    

HHS funding is part of the broader Labor, Health and Human Services, and Education Appropriation which totals $156.8B in discretionary funding which is the same as FY 2014 enacted levels, $926M below the president’s budget request.  Deltek estimate the HHS portion of these appropriations to be $80B.  HHS highlights of the omnibus bill include the following:

  • $2.7B in emergency funding to address the Ebola crisis.
  • $3.6B for CMS management and operations, which is equal to the level put in place by sequestration and the same as the FY 2014 enacted levels.
  • $6.9B for CDC for disease prevention and bio-defense research activities, $43M above FY 2014 program level.
  • $30B for NIH, $150M above the FY 2014 level.
  • $20M to combat prescription drug abuse around the country.
  • The bill contains several provisions to protect life, continues all longstanding restrictions on abortion funding that have been included in appropriations legislation in prior years, and promotes abstinence education.
  • $17.8B in discretionary resources for the Administration of Children and Families, which is a $108M increase.
  • The bill provides no new funding for the Affordable Care Act.

Homeland Security

The Department of Homeland Security is the only department in the Omnibus that is not receiving funding through the remainder of FY 2015, i.e. September 30, 2015.  The Omnibus funds DHS with a continuing resolution at the FY 2014 annual level of $39.3B through February 27, 2015 as media reports indicate that the Republican majority will seek to influence the implementation of the president’s recent immigration policy actions.

Justice

Department of Justice funding of $26.7B marks a reduction of $600M below FY 2014 enacted levels.

  • $25.8M for Justice Information Sharing Technology
  • Federal Bureau of Investigation (FBI): $8.4B for the FBI increases resources by $93M over FY 2014 levels to support activities around counter-terrorism, cybersecurity, and human trafficking.
  • Drug Enforcement Administration (DEA):  $2.4B marks an increase of $21M over the 2014 enacted level.
  • Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF): An increase of $22M above 2014 enacted levels brings ATF funds to $1.2B for 2015.
  • National Instant Criminal Background Check System (NICS) Initiative grants: $73.0M in grants are provided to improve NICS records. These grants are expected to assist states in identifying and executing approaches to add more records to the system, particularly mental health records.
  • Prescription Drug Monitoring Programs (PDMPs): New state laws promoting the increase of PDMP best practices around prescribing controlled substances maintain support for technical assistance for PDMPs, PDMP data users, and other key stakeholders.
  • Additionally, DOJ is expected to identify and report on specific metrics related to cybercrime and cybersecurity efforts that may be measured.

State and International Programs

The Department of State and USAID appropriation of $49B includes $15.7B in base and contingency funding for operational costs of the State Department and related agencies, of which $5.4B is targeted for embassy security.

  • $1.4B for USAID base and contingency funding
  • $2.5B in Ebola emergency funding
  • $8.4B in base and contingency funding for international security assistance


Go to Part 3 of Civilian Highlights, or check out our Defense Highlights of the FY 2015 Omnibus here.

Congress Passes FY 2015 Funding – Civilian Highlights, Part 3

The U.S. Congress passed an omnibus funding bill for the remainder of fiscal year (FY) 2015 that includes $1.1 trillion in total in discretionary federal funds, roughly half of which goes to federal civilian departments and agencies. In part 3 we’ll look at Transportation, Treasury, and the VA.

Read our Civilian Highlights, Part 2.

Transportation

Department of Transportation receives $17.8B in discretionary funding, the same as the fiscal year 2014 enacted level and $4.8B below the president’s request.

  • $12.4B for the Federal Aviation Administration, $17M below the fiscal year 2014 enacted level. Funding is preserved for FAA’s Next Generation Air Transportation Systems (NextGen) investment.
  • $1.6B for the Federal Railroad Administration, an increase of $23M above the fiscal year 2014 enacted level.
  • $2.3B for the Federal Transit Administration, an increase of $141M over the fiscal year 2014 enacted level.
  • $830M in both mandatory and discretionary funding for the National Highway Traffic Safety Administration, an increase of $11M over the fiscal year 2014 enacted level
  • $584M for the Federal Motor Carrier Safety Administration, a decrease of $1M from the fiscal year 2014 enacted level.
  • $9.1M for the Pipeline and Hazardous Materials Safety Administration.
  • $186M for the Maritime Security Program, the same level in the current authorization.

Treasury

The Department of the Treasury funding is part of the Financial Services Appropriations.  Treasury’s discretionary funding totals $12.5B for FY 2015.  Treasury highlights of the omnibus bill include the following:

  • $10.9B for the IRS, a reduction of $345.6M below FY 2014 and $1.5B below the president’s request. This amount includes $290M for business systems modernization.
  • $112M for Financial Crimes Enforcement Network.
  • The bill does not provide any additional funds for the IRS to implement the Affordable Care Act.
  • The bill contains several important oversight and policy provisions related to the IRS, to combat waste and increase accountability.

Veterans Affairs

The Department of Veterans Affairs funding is part of the broader Military Construction/Veterans Affairs Appropriations.  VA’s discretionary funding totals $65B for FY 2015.  VA highlights of the omnibus bill include the following:

  • $45.2B for VA medical services to provide care and treatment for approximately 6.7 million veterans. This includes: $7.2B in mental health care services; $133M in suicide prevention activities; $229M for traumatic brain injury treatment; $7.4B in homeless veterans treatment, services, housing, and job training; and $250M in rural health initiatives.
  • $209M to help address new costs related to the Veterans Access, Choice, and Accountability Act of 2014 – such as hiring medical staff and expanding facility capacity and to implement the Caregivers Act, which provides stipends and other assistance to families of seriously wounded veterans.
  • $344M to help ensure DoD-VA EHRs that will seamlessly transfer medical information.
  • Requires the VA to create a truly interoperable, working system to help prevent unnecessary mistakes or delays in veterans’ medical care. If goals are not met, a portion of the funding will not be released.
  • $2.5B for disability claims processing backlog. This is $40M over the president’s budget request.  The increase is to be used to support digital scanning of claims, to hire additional claims processors in regional offices, and for the centralized mail initiative.
  • $99M to fund the Board of Veterans Appeals to address the looming appeals backlog.
  • $562M for major construction to correcting critical seismic deficiencies and repair crumbling infrastructure in some of the VA’s oldest structures.
  • $58.7B in advance FY 2016 appropriations for Veterans Medical Programs to provide for medical services, medical support and compliance, and medical facilities, and ensure that veterans have continued access to their medical care.

Check out our Defense Highlights of the FY 2015 Omnibus here.

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

FY 2015 Appropriations Plan is on the Horizon...Hopefully

On December 9, the House and Senate Appropriations Committees released their Consolidated and Further
Continuing Appropriations Act, 2015 bill, 2 days shy of the expiration of the Continuing Resolution (CR).  While the $1.1trillion dollar discretionary budget appropriations package is good news, there are still a few steps in the process before it becomes law, which means that there is likely to be another short-term CR passed in the next 24 hours to give Congress enough time to push the bill through.

The omnibus currently sits at the committee level in both the House and Senate.  Now, the full House and Senate must pass each version, followed by the House-Senate conference committee hammering out any differences to agree on a final version that goes to President Obama for his signature.

The good news is that there is informal agreement about funding levels for each appropriation bill, including a plan for a CR to only fund the Department of Homeland Security through February 27, 2015.  The omnibus funding levels are compared to the President’s Budget Request below:

The House and Senate versions of the omnibus also show agreement on funding (or lack thereof) and oversight in several high-profile areas, including:

  • No additional funding for Obamacare   
  • Increased funding to address backlog in VA’s disability claims processing (+$69M compared to FY 2014)
  • Increased oversight of VA construction expenditures and audits of hospital scheduling and patient care
  • No DHS funding allocated to addressing “the humanitarian crisis of children and families with children crossing our Southwest border”
  • No DHS funding allocated to addressing lapses in White House security
  • IRS-specific policy provisions:
    --Funding prohibition for inappropriate videos and conferences
    --Funding prohibition on target organizations for regulatory scrutiny based on their ideological beliefs or for exercising their First Amendment rights
    --Funding prohibition for improperly disclosing confidential taxpayer information
    --Funding prohibition for the White House to order the IRS to determine the tax-exempt status of an organization
    --A requirement that the agency report on spending and activities, official time and document retention.


The bad news is that, while there is a general consensus that another government shutdown is off the table, the broad scope of the bill provides ample fodder for Congressional contingents to oppose various pieces of the bill. 

According to this Politico.com article, some lawmakers are opposed to the bill because it does little to block President Obama’s plans on immigration reform, others because it doesn’t cut enough spending, and others because they simply haven’t had time to examine its contents.    

Budget uncertainty is the monkey wrench of the procurement process, so the sooner agency leadership has clarity around their fiscal circumstances for the remainder of the fiscal year, the better.

 

FY 2015 National Defense Authorization Act (NDAA) Set to Pass

The National Defense Authorization Act (NDAA) for Fiscal Year 2015 has crossed a major hurdle to passage before the end of the calendar year as a House-Senate compromise bill has emerged. The final bill has implications for information technology acquisition and management at the Pentagon and beyond.

The legislation is a combination of two bills that each passed last May: HR 4435, which passed the full House, and S 2410, which passed in the Senate Armed Services Committee. As is typical, this year’s NDAA goes well beyond funding of national defense operations to include organizational and acquisition reform efforts and information technology priorities. Below is an overview of the high points of the bill.

Overview

  • Authorizes $521.3 billion in base discretionary defense spending and an additional $63.7 billion for Overseas Contingency Operations (OCO), reflecting the President’s initial request of $58.6 billion and the additional request of $5.1 billion to primarily cover counter-ISIL operations. The FY ‘15 NDAA is $48.0 billion less than the enacted FY ‘14 NDAA.
  • Does not reflect a proposed BRAC round as requested by the Administration, citing concerns that previous rounds did not yield the promised savings but rather imposed large up-front costs only to shift property between federal agencies. The current flux of military size and structure is also cited as a reason to postpone a BRAC round.
  • Selectively supports some White House proposals – like limited compensation increases for military personnel, including a for a pay freeze for General and Flag Officers – while adjusting others – like replacing a 5% reduction in basic allowance for housing (BAH) with a 1% decrease. This NDAA also blocks retirement of the A-10 aircraft, but provides for some reprogramming of those funds to higher priorities if needed.

Reform Efforts

  • Restores the Office of Net Assessment (ONA) to an independent status, reporting directly to the Secretary of Defense, and increases the ONA budget for FY ‘15 by $10 million to $18.9 million
  • Directs the SECDEF to report on the feasibility of reducing or consolidating combatant command functions by FY20 and a plan to implement a periodic review and analysis of management headquarters. This NDAA would also task GAO with assessing the DoD’s headquarter reduction efforts as part of GAO’s previous work assessing HQ growth.
  • Directs the Under Secretary for Acquisition, Technology, and Logistics, (USD (AT&L)) and senior acquisition executives for the Navy and the Air Force to issue DoD-wide policies implementing a standard checklist to be completed before issuing a solicitation for any new contract for services or exercising an option under an existing services contract. The FY ‘08 NDAA established an annual services contracts inventory requirement that DoD has yet to fully implement.
  • As a cost-control mechanism, the bill requires the Comptroller General to conduct a review of cases in which an acquisition program office believes that the Director of Operational Test and Evaluation has required testing above the required test plan.
  • Directs the SECDEF to provide the congressional defense committees with frequent reports on DoD’s damage assessment resulting from unauthorized disclosures of classified information and steps the Department is taking to mitigate the damage.
  • Provides for an overhaul of the Quadrennial Defense Review (QDR) process to produce a new Defense Strategy Review that is more long-term and strategic in nature and a more useful oversight tool.

Information Technology and Cyber Operations

  • Directs the President to maintain a list of nation-states or individuals that engage in economic or industrial espionage using cyber tools, and allows for the President to impose sanctions on such individuals or nation-states
  • Directs the SECDEF to designate an executive agency for cyber test ranges and another for cyber training ranges to better coordinate and resource each
  • Requires the development of a Major Force Program for cyber to better account for the budgeting and resourcing of cyber operations capabilities
  • Requires mandatory reporting on penetrations of operationally critical contractor networks
  • Requires the development and implementation of operational metrics for the performance of the Joint Information Environment (JIE)
  • Implements the Federal Information Technology Reform Act (FITARA) that has stalled and been removed from last year’s NDAA, according to Nextgov. FITARA will give additional budgetary and management authorities to agency CIOs, although no so much in the DoD. Nextgov also notes that the NDAA also supports federal data center consolidation efforts, the DoD’s move to cloud computing, and a plan to expand the use special IT acquisition experts.

While the final bill still needs to pass both the full House and Senate and be signed by the president, the FITARA provisions should not be a major reason for a presidential veto, according to a Federal News Radio interview with some members of Congress.  

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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 me on Twitter @GovWinSlye.

 

DHS Cybersecurity Spending Trends Align with Personnel Challenges

Attracting and retaining skilled cybersecurity people is key for federal agencies in meeting their cybersecurity challenges and this is especially true at the Department of Homeland Security. Yet, DHS continues to make the news with its difficulty in retaining top staff and in hiring highly-qualified people, especially for cybersecurity.   A look at their cybersecurity spending data reveals what has been happening.

I previously looked at the media reports of morale and personnel retention issues at DHS that impact their cybersecurity mission and some legislation that Congress has moved forward that may make it easier for DHS to hire cybersecurity staff in the future. This week I want to look at some of the IT security budget data that underscores the situation at the department – especially how much of DHS’s IT security spending goes toward security personnel verses security software and hardware solutions.

Hard data on what agencies spend on cybersecurity is not usually easy to find and it can vary in its completeness and granularity. However, over the last several years OMB has released varying amounts of IT security budget data as part of their annual Federal Information Security Management Act (FISMA) report submitted to Congress to update them on the progress and challenges agencies are facing. On a few occasions OMB has provided a breakdown of spending by personnel, security tools, training and other areas.

To be sure, the amount that a federal department spends on security personnel compared to their overall IT security spending varies agency by agency and the relative mix of government personnel to contracted personnel also varies. Observing an agency’s total IT security personnel spending vis-à-vis their overall security budget can give a sense of the security landscape at the department. The stability or movement often may be tied to specific priorities at the department. Even if it is not, the mix can give us a sense and hint at what opportunities may exist

DHS IT Security Spending

Based on the last several Federal Information Security Management Act (FISMA) reports released by OMB, DHS’s reported IT Security spend was stable from FY 2010 to FY 2011 and then saw significant yearly increases in FY 2012 and FY 2013. However, over the same period, the amount of money DHS spent on security personnel actually dropped. (See chart below.)  The result is that the relative percentage of total spending that was used for security personnel decreased at an accelerating rate over the period as the two categories moved in opposite directions – total spending increased while personnel spending decreased.


But the story gets even more stark. For FY 2012 DHS reported to OMB that they employed just under 400 IT security government personnel, compared to contracting more than 600 IT security personnel from industry. While this proportion of government-to-contractor personnel itself is not completely unheard of (Treasury, Energy, and NASA have even larger spreads) the fact remains that DHS holds the predominant role in government-wide IT security, consistently receives the largest IT security budget among the civilian agencies, and is one of the most dependent on a contracted workforce to achieve its cyber- mission.

Over the last several years various members of the DHS leadership have made well-publicized comments about the challenges of attracting and retaining cybersecurity personnel. Hence the legislative push in Congress to help them. Yet the spending data suggests that there is growing opportunity at DHS in areas that are not personnel-centric, like cybersecurity solutions that put tools in the hands of the skilled people they have now in order to make them more productive and effective. Evidence for this is that DHS’s spending on IT security tools increased from about $30 million in FY 2010 to nearly $300 million in FY 2012.

DHS will probably continue to struggle to build their cyber-workforce for some time – with or without help from Congress. Until then, they’ll continue to need skilled people from industry to fulfill the mission, but to reach long-term sustainability and ultimate success they will need to look to ever-advancing security tools to leverage their people to the maximum effect.

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

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