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Information Technology Provisions in the 2014 Farm Bill

After years of delay, the latest Farm Bill (H.R. 2642) is making its way through Congress. President Obama is expected to sign the bill once it clears the Senate. Officially titled the “Federal Agriculture Reform and Risk Management Act of 2013,” the legislation contains a lot more than provisions applying to agricultural subsidies and oversight. There are several information technology provisions as well that will be of interest to the contractor community. These provisions are particularly relevant to the Department of Agriculture’s use of big data analytics, which Congress is pushing the agency to use.

Ferreting Out Fraud

In 2013 the Federal Crop Insurance Program (FCIP) paid out $17.3 billion to American farmers for crop losses due to extreme weather conditions. This amount was a record for the program and that kind of money tends to draw attention. Suspecting that fraud may account for a certain percentage of the payments being made, Section 1107 directs that the Secretary of Agriculture “use all available information and analysis, including data mining, to check for anomalies in the provision of revenue loss coverage payments.”

While this provision does not explicitly demand that the Risk Management Agency acquire data mining tools it can use to find “anomalies,” it does suggest there is a need for such tools at the RMA that industry may want to investigate. However, before anyone gets too excited and begins calling around the RMA, be aware that there is an entrenched IT provider to contend with. Presumably any investment made in response to provision 1107 would be part of the RMA’s Emerging Information Technology Architecture (EITA) efforts, which are intended to “replace mission-critical legacy financial and business systems that are at or past end-of-life and unable to meet the demands of the current Risk Management Program.” This would suggest that any data mining tools required are likely, but not guaranteed, to be procured under a $208 million IT services contract awarded to SAIC in 2011 (Contract #GST0011AJ0019).

Pine Needles in Haystacks

AG doesn’t just insure crops, it also counts trees. In an effort to get a better handle on U.S. forest inventory, Section 7401 directs the Secretary of Agriculture to revise the USDA’s strategic plan for forest inventory and analysis. The key to collecting the required data is collaboration between “the Natural Resources Conservation Service, National Aeronautics and Space Administration, National Oceanic and Atmospheric Administration, and United States Geological Survey to integrate remote sensing, spatial analysis techniques, and other new technologies in the forest inventory and analysis program.”

Again, it’s impossible at this point to know how the U.S. Forest Service will fulfill this requirement. FS has been working for years to upgrade its IT systems. Most of this investment takes place under the Forest Service Computer Base (FSCB) program, with work being performed by a number of industry partners. The FSCB contract I have my eye on that could be relevant to Section 7401 is #IND11PC40028, held by Snap, Inc. An 8a IT company, Snap provides computing infrastructure support to the Forest Service under this contract. Presumably, integrating data from multiple agency sources for the forest inventory program would require work on the systems for which Snap provides support. Should this not be the case, then we could see a solicitation for this requirement in FY 2014.

$55 Million to Go Organic

The final provision worth examining from an IT perspective is Section 9004 concerning organic agriculture. Section 9004 is the only provision in the Farm Bill that explicitly directs the Secretary of Agriculture to make an IT investment. Specifically, “the Secretary shall modernize database and technology systems of the national organic program” and the program will receive $11 million each fiscal year from 2014 to 2018 to get the job done. In short, the USDA will be throwing $55 million at the modernization effort, making this an effort worth keeping your eye on.

 

Congress Set to Pass FY 2014 Funding – Would Avert Shutdown, Mute Sequestration

The U.S. Congress is expected to pass an omnibus funding bill for the remainder of fiscal year (FY) 2014 that includes $1 trillion in discretionary federal funds.

The Hill reported that H.R. 3547 passed the House and is now moving onto the Senate. The bill is a compromise measure in keeping with the budget agreement the two parties reached late in 2013. As such, the bill is set to increase total discretionary spending to $1.102 trillion in FY 2014, an increase over the $986 billion that was originally planned.

If the final bill passes the Senate and is signed by the President, as is expected at the time of this writing, another looming government shutdown will have been averted. Further, departments and agencies that have been coping with the limitations imposed under the “same stuff, different day” scenario that accompanies continuing resolutions (CR) will have real appropriations with operating budgets and more program flexibility, even if their budgets don’t necessarily grow.

Year-over-Year Changes

The pending omnibus would, in one sweeping appropriations, address funding for each of the agencies covered under the twelve individual appropriations bills that traditionally make their way through Congress.  Barring any unexpected changes in either chamber, a summary of the appropriation’s impact on departmental budgets is presented in the table below and following descriptions.

Department of Defense

Total FY 2014 funding is set at $572B and includes $487B in base budget and $85B for OCO.

  • Military Personnel (MILPERS) - $129B, up $1.3B from FY 2013. Includes 1% pay raise for armed forces and civilian workforce, the first civilian raise in 4 years.
  • O&M - $160B, down $13.6B from FY 2013. Priority on essential readiness programs, including $447M for CYBERCOM
  • Procurement - $92.9B, down $7.5B from FY 2013 enacted level.
  • RDT&E - $63B, $6.9B below FY 2013
  • Military Construction (MILCON) - $9.8B, a decrease of $817M from FY 2013
  • These budget categories (MILPERS, etc.) are split and aggregate across the four defense areas as follows:
    • Air Force - $133B, Army - $117B, Navy/Marine Corps - $144B, Defense-wide - $57B
  • Identifiable OCO spending breaks out as follows:
    • Air Force - $16.5B, Army - $40B, Navy/Marine Corps - $14B, Defense-wide - $7.4B
  • Includes a 1% pay raise to members of the Armed Forces and the Department of Defense civilian workforce. This is the first pay raise for Department of Defense civilians in four years.
  • Supports readiness with O&M funding that is $11B higher than under a full-year CR.
  • Provides $1B billion for the National Guard and Reserve Equipment Account to ensure Guard and Reserve units have the critical equipment necessary for both homeland security and overseas missions.
  • Includes $2.4B to continue operation and begin modernization of nine Navy ships which had been proposed for retirement due to budget constraints
  • Adds $175M for the Rapid Innovation Program and $75M for the Industrial Base Innovation Fund to promote the development of new technologies and timely fielding of critical equipment.
  • Instead of across-the-board sequestration cuts, the bill proposes 1,065 specific cuts to programs and redirects some of those funds to higher priorities.
  • Translates delays in acquisition programs into spending deferments and reductions, including:
    • $204M from the Army’s Warfighter Information Network-Tactical Increment II due to test issues
    • $85M from the Air Force’s Space Fence radar system due to acquisition delays
    • $45M from follow-on development of the Navy’s E-2D Advanced Hawkeye aircraft due to contract delays.

Health and Human Services

HHS funding is part of the broader Labor, Health and Human Services, and Education Appropriation which totals $156.8 billion in discretionary funding, and the Agriculture Appropriation.  We estimate the HHS portion of these appropriations to be $80B.  HHS highlights of the omnibus bill include the following:

  • $2.6B for FDA, $217M above FY 2013
  • $3.7B for CMS management and operations, equal to the sequester level
  • $6.9B for the CDC, $567 million above the FY 2013
  • $4.4B for the Indian Health Service, $304M above the post-sequestration level
  • $29.9B for NIH, $1B above FY 2013 post-sequester
  • $30.9B for ACF, $782M above FY 2013 enacted level
  • $3.6B for SAMHSA, $144M over FY 2013 enacted level
  • $8.6B for Head Start, a $1B above the post-sequestration level
  • $2.36B for the Child Care and Development Block Grant, $154M above FY 2013
  • $3.6B Community Health Centers (CHCs), a $700 million increase
  • $2.3B HIV/AIDs Programs, a $70M increase
  • The bill provides no new funding for ObamaCare, and holds the line on ObamaCare funding in CMS.
  • $305 million for CMS to allow for the timely processing and payment of benefits, and the continuation of essential services for the increasing number of Americans who rely on traditional Medicare programs.

Education

  • $250M for Race to the Top—Preschool Development  to be used for grants to States
  • $11.5B for IDEA/Special Education 
  • $14.4B for Title I/Disadvantaged Schools, a $625M increase
  • $1.2B for 21st Century Community Learning Centers, an increase of $58M
  • $1.3B for Impact Aid, an increase of $65M
  • $22.8B for the Pell Grant program

Veterans Affairs

VA funding is part of the broader Military Construction/Veterans Affairs Appropriations.  VA’s discretionary funding totals $63.2B for FY 2014.  VA highlights of the omnibus bill include the following:

  • $55.6B in FY 2015 advance appropriations for veterans medical care
  • $20M above the budget request to upgrade computer hardware, such as servers, in VA Regional Offices to handle the advanced program requirements of the Veterans Benefits Management System
  • $250M for rural health care, including telehealth and mobile clinics
  • Mandates several requirements before the VA can obligate more than 25% of the funding for  Vista electronic health record modernization
  • $4B in FY 2014 to meet the health care needs of veterans who have served in Iraq and Afghanistan
  • $4.9B to provide healthcare for women veterans in FY2014
  • $7.6B for Long Term Care
  • $586M for Medical and Prosthetic Research
  • $3.7B for Information Technology, $20M over the request
  • $140M – an increase of $20 million above the President’s request and $26 million above
  • the fiscal year 2013 enacted level – for information technology upgrades at regional offices to
  • manage the improved paperless claims processing system;
  • $250 million for rural health care, including telehealth and mobile clinics, for veterans in rural and highly rural areas, including Native American populations.
  • Minor Construction within the VA is funded at $715M – the same as the President’s request and $108 million above the fiscal year 2013 enacted level.

State and International Programs

  • $49B includes $6.5B for Overseas Contingency Operations (OCO) and $15.7B in base and contingency funding for operational costs of the State Department and related agencies
  • $1.3B for USAID operations, of which $91 million is for contingency funding

Homeland Security

Overall FY 2014 discretionary spending for DHS is $39.3B, a reduction of $336 million from the FY 2013 enacted level.

  • Coast Guard: $10.2B overall, of which $8.7B is discretionary spending. The bill also provides $425 million in targeted increases above the FY 2014 request to support front line personnel with resources, including $23 million and $2 million respectively for pre-acquisition design work of the Offshore Patrol Cutter and for initial acquisition planning and design of a new polar icebreaker.
  • Transportation Security Administration (TSA): $7.4B for TSA is reduced by $2.1B in offsetting collections and fees. The bill includes funding for investments in explosives detection systems, passenger screening technologies, and air cargo security. The bill includes $177 million for passenger screening technologies, $93 million for Secure Flight, which matches passenger data against records contained in portions of the Terrorist Screening Database, $83 million for expedited and other vetting programs, and $25 million for the Federal Flight Deck Officer and Flight Crew Training program.
  • U.S. Customs and Border Protection (CBP): $10.6B, which adds $111 million above the FY 2013 enacted level. Adds $91 million above the budget request for Air and Marine operations and procurement of critical assets, including enhanced radar for unmanned aircraft systems and restoring the 30% cut to flight hours proposed in the budget. Adds $10 million for trusted traveler programs, including additional Global Entry kiosks and mobile document readers, expanding preclearance activities, and for border transformation programs like the land border integration effort and the port runner/absconder program.
  • U.S. Immigration and Customs Enforcement (ICE): $5.6B for ICE, of which $2.8B is for detention and removal operations, including border patrol, special agents and immigration officials.
  • United States Citizenship and Immigration Services (USCIS): $116 million in direct appropriations for USCIS and with $114 million, fully funds the E-Verify employment eligibility verification system.
  • United States Secret Service: $1.6B, expands cyber training provided by the Secret Service to state and local law enforcement officials, grows cooperation between the Secret Service and the FBI in cybersecurity, and maintains the Service’s primary role in protecting U.S. financial systems in cyberspace.
  • Domestic Nuclear Detection Office (DNDO): $285 million, including $14 million for handheld portable radiation detectors, $71 million for research and development of next-generation detection technologies, and $22 million for the Securing the Cities program.
  • National Protection and Programs Directorate (NPPD): $1.2B for the Infrastructure Protection and Information Security Program, including $792 million for cybersecurity protection of Federal networks and incident response, consisting in part of:
    • $382 million for intrusion detection on civilian Federal networks
    • $200 million to build on a new monitoring and diagnostics program begun in 2013 to better protect civilian Federal networks against threats through real time analysis of day-to-day activity
    • $15.8 million for cybersecurity education to train future cyber warriors
  • Science and Technology (S&T): $1.2B, sustains investment in high-priority research and development efforts, including $404 million in funding for the construction of the National Bio- and Agro-Defense Facility (NBAF).  
  • Office of Health Affairs (OHA): $127 million, including $85 million for the Bio-Watch Program and $2 million to complete demonstration projects through the Chemical Defense Program.

Housing and Urban Development

  • HUD’s operating budget declines this year as FY 2014 discretionary funding of $32.8B represents a 2% decrease from the FY 2013 enacted level of $33.5B.
  • Funding includes:
    • $26.3B for Public and Indian Housing (increase of $411M from FY 2013 enacted and $1.5B below FY 2014 request)
    • $10.5B for Housing Programs ($561M above FY 2013 enacted and $381M below FY 2014 request)
    • $6.6B for Community Planning and Development Programs ($145M less than FY 2013 enacted)
  • Provisions of Interest
    • $36M for the HUD OCIO.
    • $250M for development, modernization, enhancement and maintenance of Department-wide and program-specific IT programs.

Justice

  • Bolsters resources for DOJ capabilities to counter growing cyber threats. Within 120 days of enactment, DOJ is to provide a multiyear strategic plan that identifies resources, programs and coordination structures need to enable prevention of and more rapid response to future cyber attacks.
  • Justice Information Sharing Technology (JIST):  $25.8 million in funding for JIST, as well as enabling the Attorney General to transfer funds to this account from funds available to DOJ for enterprise-wide IT initiatives.
  • National Security Division (NSD): $91.8 million for the NSD, including funds to support the Intelligence Community to combat cyber threats at with resources that at least match FY 2013 levels.
  • Federal Bureau of Investigation (FBI): Receives $8.3 billion, an increase of $232 million over FY 2013 enacted levels.
    • $8.2 billion for salaries and expenses of the FBI.
    • $390.0 million in resources to continue support its Next Generation Cyber Initiative and cyber task forces
    • The FBI is expected to increase resources for the National Instant Criminal Background Check System (NICS) by $60,000,000 to expand capacity of NICS to meet rising demand for system resources.
  • Drug Enforcement Administration (DEA): $2.4 billion, marking a rise of $21 million over FY 2013 levels.
  • Includes $361.0 million for regulatory and enforcement efforts to combat prescription drug abuse.
  • Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF): $1.18 billion, an increase of $47 million over FY 2013 enacted.
  • Includes resources for the updating and expanding of the National Integrated Ballistic Imaging Network (NIBIN).
  • U.S. Marshals Service: $2.7 billion, marking a decrease of $72 million from FY 13 due to reduced estimates for federal detention requirements.
  • Federal Prison System (BOP): $6.9 billion, an increase of $79 million above FY 2013 enacted.
  • Maintains staffing levels and continues activation of new prisons.
  • Grants Program: $2.2 billion for various state and local grant programs, $32 million above FY 2013 enacted level.
  • State and Local Law Enforcement Assistance: $1.17 billion for initiatives including victims of human trafficking, DNA grants, Byrne-Justice Assistance Grant (JAG) subgrantees, as well as National Instant Criminal Background Check System (NICS) Initiative grants.

Energy

  • National Nuclear Security Administration (NNSA): Receives $11.2 billion to maintain the safety, security, and readiness of the nation’s nuclear weapons stockpile.
    • Increases funding for Weapons Activities by $847 million over FY 2013, providing $7.845 billion in FY 2014.
    • Critical defense funding upholds national nuclear deterrence posture.
    • Includes $537 million to extend the life of the B61 nuclear bomb.
  • Energy Programs: Increases funding for energy programs to $10.2 billion, a $620 million rise over FY 13 enacted levels. Including:
    • $562 million for research and development to advance coal, natural gas, oil, and other fossil energy technologies. ($28 million above FY13 enacted level)
    • $889 million for nuclear energy research and development to further next generation of nuclear power. ($36 million over the FY13 enacted level.)
  • Science Research: Office of Science receives $5.071 billion ($450 million over FY 2013) for breakthroughs in energy applications and development of next-generation high performance computing systems.
  • Provides $280 million for Advanced Research Projects Agency-Energy (ARPA-E), an increase of $29 million over FY 2013, to develop promising/high-risk future energy technologies.
  • Energy and Efficiency and Renewable Energy (EERE) programs receive $1.9 billion, an increase of $182 million over FY 2013, to advance biomass, electric vehicle, and energy efficient advanced manufacturing technologies.
  • Defense Environmental Cleanup receives $5.0 billion, an increase of $381 million above FY 2013.
  • Cuts funding for Nuclear Nonproliferation by $289 million from FY 2013, providing $1.954 billion for FY 2014.
  • Provides $147 million for Electricity Delivery and Energy Reliability, including $5 million within Cyber Security for Energy Delivery Systems to enhance full-scale electric grid testing capabilities associated with integration of wireless technologies, power generation, and communications and control systems.

Agriculture

  • USDA’s operating budget is a winner this year as FY 2014 discretionary funding of $20.9B represents a 2% increase over the FY 2013 enacted level of $20.5B.
  • Funding includes:
    • $5.5B for the Forest Service
    • $2.6B for Agriculture Research
    • $292.8M for the Forest Service
    • $828M for the Animal and Plant Health Inspection Service
    • $1.5B for the Farm Service Agency
    • $2.4B for Rural Development ($180M above FY 2013 enacted level)
    • $1B for the Food Safety and Inspection Service ($19M below FY 2013 enacted level)
    • $2.6B for the Food and Drug Administration (Restores $85M in fee revenue lost dues to sequestration)
    • $215M for the Commodity Futures Trading Commission ($100M below President’s 2014 Request)
    • $826M for the Natural Resources Conservation Service
  • Provisions of Interest
    • Budget contains requirements for the Secretary of Agriculture to eliminate waste, fraud, and abuse in the Supplemental Nutrition Assistance Program.
    • Makes cuts to lower-priority programs.
    • Provides $44M for the USDA OCIO, no less than $27M of which is to be spent on USDA cybersecurity requirements.
    • Provides $4.2M for APHIS’ IT infrastructure.
    • Increases CIO governance over IT expenses, requiring the CIO to approve of any investment greater than $25K before the investment is made.
    • Stipulates no new IT system or upgrade of current systems may be acquired without OCIO and Executive IT Investment Review Board approval.

Transportation

  • DOT’s operating budget is flat this year as FY 2014 discretionary funding of $17.8B represents a 0.5% decrease from the FY 2013 enacted level of $17.9B.
  • Funding includes:
    • $41B for the Federal Highway program (same level authorized in the MAP-21 transportation authorization legislation that expires on September 30, 2014); an increase of $557M from FY 2013 enacted
    • $12.4B for the Federal Aviation Administration ($168M below FY 2013 enacted);
    • $1.6B for the Federal Railroad Administration (decrease of $34.6M from FY 2013 enacted)
    • $2.15B for the Federal Transit Administration (decrease of $100M from FY 2013 enacted)
    • $819M in mandatory and discretionary funding for the National Highway Traffic Safety Administration (increase of $8.9M over FY 2013 enacted)
    • $585M for the Federal Motor Carrier Safety Administration (increase of $24M above FY 2013 enacted)
    • $12.8M increase over the FY 2013 level for the Pipeline and Hazardous Materials Safety Administration
  • Provisions of Interest
    • Funding for FAA NextGen investments is preserved.
    • $15.7M for the DOT OCIO.
    • $7M for upgrading and enhancing the DOT’s financial systems and re-engineering business processes.
    • $4.45M for cybersecurity initiatives.

NASA

  • Preserves balance of NASA portfolio across science, aeronautics, technology and human space flight.
  • Asteroid Redirect Mission (ARM): Completion of significant preliminary activities is needed prior to NASA and Congress making long-term commitment to this mission concept.
  • Science: Funding totals $5.15B, including Education and Public Outreach, Earth Science, Planetary Science, Astrophysics, and Heliophysics.
    • Prior to expending any funds on the development of JPSS climate sensors, NASA is to prepare development plans with notional budget and schedule details for submission to the Appropriations Committee.
    • Under Planetary Science, Mars Exploration receives $288 million, including $65 million for the development of the Mars 2020 Rover.
  • Aeronautics: Funding amounts to $566 million.
  • Space Technology: Funding totals $576 million.
  • Exploration: $4.1 billion for Exploration mission directorate, including Multi-Purpose Crew Vehicle and Space Launch System programs.
    • $1.6 billion is provided for the Space Launch System (SLS) to sustain core development of mission components. Due to concerns regarding diversion of funds for activities with only tangential relevance to the SLS, NASA is expected to complete quarterly spending reports on additional potential for the investment along with tracking milestones and development schedules.
    • $1.2 billion is provided for the Orion Multi-Purpose Crew Vehicle, including $3 million for Construction and Environmental Compliance and Restoration.
  • Space Operations: $3.8 billion for Space Operations, including strong support for the International Space Station (ISS).
  • Cross Agency Support: $2.8 billion in Cross Agency Support funds security, infrastructure, and reports.
  • Office of Inspector General to receive $37.5 million.
  • Administrative Provisions include establishing terms and conditions for the transfer of funds.

Labor

  • $2.6B for Job Training through for Workforce Investment Act Grants to States, an increase of $121M
  • $80M for Unemployment Insurance (UI) Program Integrity, an increase of $16M
  • $10.4B for the Employment Training Administration, a decrease of $562M from FY 2013 enacted level
  • $1.7B for the Office of Job Corps
  • $269.5M for Veterans Employment and Training Service (VETS)

Treasury

  • $112M for the FinCEN (Financial Crimes Enforcement Network ), $7M above a FY 2014 full-year CR level
  • $226M for the Community Development Financial Institutions Fund (CDFI), $17M above a FY 2014 full-year CR level
  • $11.3B for IRS
  • $35M Treasury Inspector General, a $7M increase
  • $156.4M Treasury Inspector General for Tax Administration, a $12.6M above a FY 2014 full-year CR level
  • $92M to help address identity theft and refund fraud, combat offshore tax evasion, and improve delivery of services to taxpayers. 
  • The bill includes no additional funding for ObamaCare
  • $3M available until 9/30/15 for IT modernization requirements
  • Up to $250M available until 9/30/15 for IT support
  • $313M available until 9/30/16 for capital asset acquisition of IT systems, including management and related contractual costs for business systems modernization.

Interior

  • $954 million for the Bureau of Reclamation’s Water and Related Resources, $106 million over FY 2013.
  • Bureau of Land Management (BLM): Funded at $1.1 billion, marking an increase of $7 million above FY 2013 enacted. Provides for effective stewardship of public lands.
  • National Park Services (NPS): $2.6 billion, an increase of $28.5 million over FY 2013 enacted. Allows every national park to remain open for the duration of FY 2014.
  • U.S. Forest Service: $5.5 billion, including increases for wildfire fighting and management.
  • United States Geological Survey (USGS): Provides $1.03 billion for Surveys, Investigations, and Research, including an increase of $400,000 for data preservation.
  • American Indian and Alaska Native Programs:  Provides funding for health care, law enforcement, and education.
    • Indian Health Services: Receives $4.3 billion in funding, an increase of $78 million over FY 2013 enacted levels.
    • Bureau of Indian Affairs and Education:  Provides $2.5 billion in funding, an $18 million increase over FY 2013 enacted levels.
  • U.S. Fish and Wildlife Service (FWS): $1.4 billion, a decrease of $32 million from the FY 2013 enacted levels. This funding provides for compensating ranchers for livestock loss, stopping spread of mussel and fish varieties, and species conservation.
  • Fully funds request for information technology management.

Commerce

  • National Oceanic and Atmospheric Administration (NOAA): $5.3 billion, marking an increase of $310 million over the FY 2013 enacted levels.
    • Including $953.6 million for the National Weather Service as well as $187.1 million for the National Environmental Satellite, Data and Information Service (NESDIS) operations, research, and facilities.
    • Fully funds NOAA’s weather satellite programs (GOES-R and JPSS). Although NOAA is expected to focus on the weather satellite program and to better address gaps in its FY 2015 budget, NOAA will continue to provide quarterly updates to the Committees on Appropriations regarding its weather satellite portfolio.
  • Bureau of Census: $945.0 million, including $693.0 million for periodic censuses and programs.
  • United States Patent and Trademark Office (USPTO): $3.0 billion, marking an increase of $91 million over FY13.
    • Maintains provision that USPTO makes available any fees collected in excess of estimates.
    • Adopts language from the House and Senate reports for Patents End-to-End. USPTO will submit a report to the Committees on Appropriations within 90 days of the Act’s enactment.
  • National Institute of Standards and Technology (NIST): $850 million for NIST, increase of $41 million over FY13 enacted, including $651.0 million for NIST’s scientific and technical core programs.
    • Increase of $5.0M for cyber security research. Increase of $1.0M for disaster resilience research.
    • $4.0M for the National Initiative for Cybersecurity (NICE) Program.
    • $15.0M for the National Cybersecurity Center of Excellence.
    • $16.5M to maintain the current operating level for the National Strategy for Trusted Identities in Cyberspace (NSTIC).
  • International Trade Administration (ITA): $470.0 million in total resources, offset by $9.4 million in estimated fee collection.
  • Bureau of Industry and Security (BIS): $101.5 million for operations and administration.
  • Economic Development Administration (EDA): $246.5 million for programs, including $209.5 million for Economic Development Assistance Programs.
  • Minority Business Development Agency: Receives $28.0 million in funding.
  • Economic and Statistical Analysis: Provides $99.0 million in funding.
  • Working Capital Fund: Rather than supporting the level requested for the WCF, the Commerce Department is expected to submit a list of transfers to and activities funded from the WCF along with its 2014 spending plan. The agreement supports the plan to establish the Enterprise Security Operations Center from the WCF.


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

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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 on twitter 
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FITARA Promises Big Changes for Agency IT Investment

Predictions about what’s ahead in federal IT for fiscal 2014 have been appearing regularly in the trade press for the last few weeks.  I’m going to refrain from adding to these prognostications because if I’ve learned anything over the last few years it is that we are living in unpredictable times.  As an example I offer up the fact that Congress is on the verge of passing a bipartisan budget deal.  Who would have thought it possible, even six weeks ago?
 
The passage of a budget should ease industry’s anxiety a bit in fiscal 2014.  This said there is another piece of legislation under consideration that is worth paying attention to because it has the potential to disrupt the federal IT market this year and for years to come.  This legislation would be the Federal IT Acquisition Reform Act, otherwise known as FITARA.  FITARA includes the following key provisions and they go way beyond just IT acquisition.
  • The appointment by the President of one department-wide CIO with greater budget authority.
  • The creation of Cloud Computing Working Capital Funds to transition agencies to cloud solutions.
  • Regulations requiring business cases and value analysis to eliminate duplicate contract vehicles and spur strategic sourcing.
  • The development of a Federal Infrastructure and Common Application Collaboration Center to serve as focal point for development and maintenance of IT requirements.
  • A focus on fixed price technical competition with prices published in the solicitation and offerors competing solely on non-price factors.
  • A government-wide inventory of IT assets.
  • A renewed focus on data center consolidation and server utilization
  • The standing up of Assisted Acquisition Centers of Excellence to promote acquisition best practices, specialized expertise in IT acquisition, and to supplement shortages of IT acquisition personnel.
The enactment of FITARA would definitely change the way agencies budget for and acquire IT-related goods and services.  With this in mind it is worth considering how agency IT could be affected if (once?) FITARA is passed.  This was the subject of a recent panel discussion featuring current and former IT officials from the Department of Agriculture, the National Aeronautics and Space Administration, and the General Services Administration.  The speakers from USDA and NASA in particular were chosen because those agencies have already implemented a good number of FITARA-like policies and approaches.  They therefore serve as examples of what could happen after the legislation goes into effect.
 
Starting with the USDA, in her response to questions about the steps Agriculture has taken toward greater governance and coordination of IT investment, Joyce Hunter, Deputy CIO for Policy and Planning rattled off a series of achievements.  These include a Portfolio Management initiative that uses monthly TechStat meetings among component CIOs to determine the health of programs before moving forward.  The USDA has also established a governance structure consisting of an Advisory Council that vets proposed investments before sending these on to the CIO Council, and finally the “eBoard” which makes the final determination if the proposed investment can move ahead.
 
This oversight, Hunter stated, gives the USDA CIO the ability to look at component investments to ensure they are on time and on budget so that the department can avoid OMB and/or GAO scrutiny.  The USDA governance structure also includes CIO performance management goals that hold CIOs accountable for their investments and the performance of those projects.  CIOs are rated twice per year on meeting performance directives and measurements.
 
The result of this governance, Hunter claims, includes a $43 million reduction in data center hosting fees in 2013 alone, the consolidation of hundreds of mobile phone plans into just three, realizing $12 million in savings over 2012 and 2013, and the consolidation of Tier 1 Help Desk services into the U.S. Forest Service.
NASA’s achievements parallel those of the USDA, according to Lori Parker, Capital Planning Lead for NASA’s Office of the CIO.  Parker noted that NASA initiated PortfolioStat type reviews in 2007 in addition to other governance reforms like the creation of a Business Systems Management Board.  Despite the ongoing struggle to achieve the complete governance success it would like (e.g., spending at NASA centers remains too opaque in the OCIO’s opinion), the agency has been successful enough since 2007 to reduce its overall IT budget from $2.2 billion to $1.44 billion.
 
So, what does all of this tell us about the potential impact of FITARA?
  • First, it suggests strongly that less IT spending is in the cards.  Duplicative investments and uncoordinated spending across components will be minimized, if not eliminated.
  • Second, increased component coordination should strengthen the drive toward shared services as components identify common requirements and solutions.
  • Third, centralization could foster greater use of cloud computing.  There are other considerations that could also affect this trend (i.e., concerns about data security, cloud performance, etc.), but in theory a centralized IT approach should support movement toward the cloud.
This, then, is my version of a prediction for what’s ahead in fiscal 2014 and beyond.  The enactment of FITARA would mark a sea-change in the way agency IT investments are governed, making federal IT that much more competitive a market.

 

Deadline Approaches for Critical Next Step in Budget Deal

The December budget deal received a lot of media attention, but it only marked the first step in the budget process. Current stopgap spending expires January 15, 2014. Without new spending authority in place, the government could partially shut down again. This rapidly approaching January deadline is where the rubber meets the road for agency funding decisions.

A month ago, the Bipartisan Budget Act of 2013, proposed by House Budget Chairman Paul Ryan (R-WI) and Senate Budget Chairwoman Patty Murray (D-WA), laid out top-line spending levels for the next two fiscal years, funding agencies through the fall of 2015. This plan essentially split the difference between the Senate and House budget for overall discretionary budget authority for the current fiscal year. It also reduced scheduled spending cuts by $63 billion over two years, essentially dulling the near-term impact of sequestration.

The top-level caps for discretionary budget authority would enable a rise in spending above current law. For Defense, this increase would be 4.5% in FY 2014 and 1.8% for FY 2015 from current levels. Non-defense discretionary budget authority would rise above current levels by 4.7% in FY 2014 and 1.9% in FY 2015.

A week out from the January 15th deadline, negotiators reported progress in reaching agreement on a $1.1 trillion spending bill to fund the government through September. This bill would mark the crucial next step in the budget process. This step is comprised of the line-by-line agency spending for the rest of fiscal 2014.  On Tuesday, January 7th, Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) voiced optimism about reaching an agreement on an omnibus spending measure. Agency budgets close to being settled at the start of the week include the Defense Department, along with Commerce, Justice, Agriculture, Housing and Urban Development, Veterans Affairs and Transportation. 

In an interview with the Associated Press, Mikulski noted that negotiators were, “looking at narrow the differences, looking at … how we can compromise without capitulation on both sides.” Issues that could still present hurdles for the bill include health care and financial sector reform, environmental and labor regulations. With current continuing resolution nearing its expiration and Congressional recess on January 17th, a temporary measure has not been ruled out to extend funding if additional time is needed to address final details. In the meantime, the goal for legislators remains completing all 12 funding bills before the January deadline.

These spending bills are particularly important for government contractors looking for indications of agency priorities and program spending over the next two years. While top-level figures provide a sense of overall government spending, that’s just the start of the budget process. Appropriations committees still have to establish department spending limits from which program-level spending will be determined. And, it’s only once those figures are set that agencies are able to make decisions about specific initiatives and contracts.

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

 

Deltek Pulse: Health and Human Services December in Review

As Deltek’s health and human services team wrapped up 2013, December proved to be a productive month with the release of new health and human services opportunities on par with previous months. With that backdrop, December was both a month of reflection and anticipation. Indeed, 2013 was one of the most energetic years to be involved in the health and human services market. From enrollment in health insurance exchanges to farm-bill-related food stamp drama, our vertical has experienced innovation, excitement and continued investment.

Opportunity Overview 

In December, the health and human services team saw the release of a little more than 600 solicitations with either health care or social services as a primary vertical. The word cloud below represents the frequency of terms in those solicitations. 

As one can see from the below map, California, New York and Colorado saw the largest number of health and human services-related solicitations, while 15 states had no related activity.

Notable Opportunities

Analyst’s Take 

As we look forward to 2014, there is no doubt that 2013 was merely an appetizer for the more exciting main course yet to be served in the health and human services market.

As we begin the year, our team is looking forward to the following events that could impact the health and human services vertical:

  • Continued ACA Implementation; specifically, the success or failure of health insurance exchanges
  • Extension of long-term unemployment benefits, coupled with the upcoming debt ceiling increase battle
  • The 2014 midterm elections, in which 36 states will hold gubernatorial elections. Currently, Republicans hold 29 governor mansions, while Democrats have 21. A shift in political leadership will have a significant impact on many health and human services programs

As we can see, the coming year will have plenty of political drama to keep us all entertained. However, our team continues to look forward to many new innovative projects, in the ilk of the above highlighted, coming out of states. All told, there can be no doubt that 2014 will be a stimulating year for health and human services. 

You can read more about the highlighted projects in the above links. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

 

 

 

 

 

 

 

IT Reform Bill Introduced in Senate

Riding on the heels of the Healthcare.gov debacle, Sens. Tom Udall (D-NM) and Jerry Moran (R-KS) introduced legislation on Tuesday, December 17th, that would overhaul the way the federal government buys and manages IT products and services. 

The Federal Information Technology Savings, Accountability, and Transparency Act (S.1843) parallels the FITARA legislation awaiting action from the full House.  By some estimates, the House legislation could save taxpayers as much as $20 billion annually by fundamentally reforming the way federal agencies purchase IT.  If passed, either version of the legislation would be the most significant reform to the IT acquisition landscape since the 2002 E-Government Act and the 1996 Clinger Cohen Act, which created the agency CIO function.

Both the Senate and House bills mandate only one CIO per agency who would be accountable for IT within their agency.  Additionally, both bills support more transparency for IT investments.  The House bill shifts all authority for IT spending to the CIO.  The Senate version would give CIOs responsibility for COTS products and heavy influence over other IT budget decisions.  The House bill establishes Assisted Acquisition Centers of Excellence to promote best acquisition practices and supplement the IT acquisition workforce where needed.  CIOs would have hiring authority for IT staff in the Senate bill.

“The federal government needs to be able to build cutting-dege, 21st century computer systems, but right now we are hobbled by laws written in the days of floppy disks and telephone modems,” Udall said.

Both bills were introduced as amendments to the House and Senate versions of the National Defense Authorization Act (NDAA), but neither made it to the final bill which is awaiting Senate action.

Udall and Moran are using the flawed rollout of the Healthcare.gov website as a platform to promote their legislation and prompt quick Congressional action. 

The White House has not publicly commented on either IT reform legislation.  However, federal CIO Steve VanRoekel has said that giving CIOs a major role in IT decision making is more important than budget authority.

The Senate bill was referred to the Committee of Homeland Security and Government Affairs.

 

Bipartisan Budget Proposal Dulls Near-term Blow of Sequestration

Late Tuesday, December 10, 2013, House and Senate negotiators announced they’d reached agreement on a two-year budget deal. The plan comes just ahead of the December 13th budget conference deadline, and it proposes top-line budget authority figures that would temper the spending cuts of sequestration over the next two years.

The Bipartisan Budget Act of 2013, proposed by House Budget Chairman Paul Ryan (R-WI) and Senate Budget Chairwoman Patty Murray (D-WA), lays out top-line spending levels for the next two fiscal years, funding agencies through the fall of 2015. For the current fiscal year, the plan essentially splits the difference between the Senate and House budgets for overall discretionary budget authority.

This bipartisan plan would reduce spending cuts by $63 billion over two years, split evenly between defense and non-defense programs. This relief is offset by savings elsewhere in the budget through deficit reduction provisions, elimination of unobligated forfeiture funds at the Department of Justice and Department of Treasury, as well as additional mandatory savings and non-tax revenue. These savings combine to total approximately $85 billion. The plan expects to save $28 billion over ten years by extending the percentage of sequestered mandatory spending in 2021 into 2022 and 2023.

The House of Representatives is expected take up the proposal for vote Thursday, December 12, 2013. After that, it will go to the Senate. If the bill is signed into law, the real work around appropriations will start as committees begin negotiating spending bills to meet the January 15, 2014 deadline.

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

Pending FY 2014 NDAA Keeps Pressure on Air Force Logistics Systems Modernization

In a highly contested budget environment no department or agency wants their IT modernization program failures to come back to haunt them. But that may well be the case for the Air Force if a provision in the current House version of the FY 2014 National Defense Authorization Act (NDAA) makes it through to the final bill.

The House passed their version of the FY 2014 NDAA, HR 1960, in June and the bill was received in the Senate shortly thereafter. But the full Senate has only begun debate on the bill this week and at the time of this writing any amendments and passage are still pending. Then the bill goes to conference committee for the two chambers to hammer out the final language for and up-or-down vote in each chamber.

The passed House version has some language that speaks directly to one of the challenges facing the Pentagon – how to effectively and economically modernize large enterprise systems, especially Air Force logistics systems.

Section 213—Limitation on Availability of Funds for Air Force Logistics Transformation

According to the House Armed Services Committee report, this section would restrict the obligation and expenditure of Air Force procurement and research, development, test, and evaluation (RDT&E) funds for logistics information technology programs until 30 days after the Secretary of the Air Force submits to the congressional defense committees a report on the modernization and update of Air Force logistics information technology systems following the cancellation of the expeditionary combat support system.

The bill specifically states that not more than 50 percent of the FY 2014 procurement and RDT&E funds may be obligated or expended until 30 days after the Secretary of the Air Force submits the report, which is to include:

  1. Near-term strategies to address any capability gaps in logistics IT and longer-term modernization strategies for the period covered by the current future-years defense plan (FYPD);
  2. A root-cause analysis leading to the failure of the expeditionary combat support system (ECSS) program; and
  3. A plan of action to ensure that the lessons learned under such analysis are shared throughout the Department of Defense and the military departments and considered in program planning for similar logistics IT systems.

Implications

It was about a year ago that Congress took special note when the Air Force decided to cancel the Expeditionary Combat Support System (ECSS) program after seven years and over $1 billion in spending without much to show for it. The announcement came in the first quarter of FY 2013, yet the Air Force reported total FY 2013 spending of $188 million on the program when the FY 2014 IT budget request was released the next spring.  While that budget request zeroed-out the program going forward it appears that with latest Defense Authorization the Hill is still watching with great interest for any revived modernization efforts at the Air Force.

These and other large enterprise-wide systems like ERPs continue to have mixed results at keeping up with the changing demands of a technically advancing military and doing so economically and with the demonstrable savings they promised. Although not called out in the NDAA, the GAO recently reviewed the Army’s Logistics Modernization Program (LMP) Increment 1 which cost roughly $1.4 billion through FY 2012. GAO determined that while some functional benefits had been achieved through LMP the Army has no accurate process in place to track financial benefits associated with the system.

In spite of the challenges, the persistent and enduring need to modernize legacy logistics systems at the Air Force remains, but it needs to be done with more realistic goals and expectations, effective and authoritative leadership, and well-defined requirements and plans.  The presence of such targeted language is likely evidence of ongoing discussions between key members of Congress and IT leadership at the Air Force in recognizing this need.

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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 May Press DHS to Bolster Cybersecurity Workforce Development

When we hear the phrase “boots-on-the-ground” most of us think of uniformed military personnel being deployed in active combat situations. But a current bill in the U.S. House of Representatives uses the phrase in connection with boosting Department of Homeland Security (DHS) efforts to improve its domestic cybersecurity workforce development activities.

In October, the House Committee on Homeland Security marked-up and passed the bill by voice vote authorizing it to be reported to the full House for consideration. It joins several other cybersecurity-related bills that have been introduced and are at various stages of progression. It is yet unclear which if any of these bills will progress to a vote in the House and are taken up in the Senate, given other priorities.

HR 3107 - Homeland Security Cybersecurity Boots-on-the-Ground Act

The bill in its current form would require DHS to develop:

  • Occupation classifications for individuals performing cybersecurity mission activities and ensure that they are used throughout DHS as well as other federal agencies
  • Workforce strategy that enhances the readiness, capacity, training, recruitment, and retention of the DHS cybersecurity workforce, including a multi-phased recruitment plan and a 10-year projection of federal workforce needs
  • Verification process so that contractor cybersecurity employees at DHS receive initial and recurrent information security and role-based security training

Other provisos

  • Defines "cybersecurity mission" as threat and vulnerability reduction, deterrence, incident response, resiliency, and recovery activities to foster the security and stability of cyberspace.
  • Directs the DHS Chief Human Capital Officer and Chief Information Officer to assess the readiness and capacity of DHS to meet its cybersecurity mission.
  • Requires the Secretary to provide Congress with annual updates regarding such strategies, assessments, and training.
  • Expands recruiting outreach through a tuition-for-work fellowship program and a program to identify military veterans and unemployed computer specialists for potential DHS cybersecurity employment

Implications

The challenge that DHS has faced with recruiting and retaining cybersecurity personnel is not breaking news. DHS has announced multiple efforts to improve recruitment and retention over the last 5+ years. Even with those efforts, the GAO reported earlier this year that more than 20% of cybersecurity positions at the National Protection and Programs Directorate (NPPD) are vacant (see p. 24). 

To cope with the shortfall agencies have continued to supplement their internal workforce with contracted personnel, but budget constraints from all sides add to the challenge. According to OMB, up to 90% of federal IT security spending is on personnel costs. The rest is a mix of training, testing, cyber tools and risk management policy implementation.

It seems to me that this is a tough cost model to sustain in an increasingly constrained fiscal environment, but the nature of current cybersecurity operations and existing needs present challenges to automating many functions that require experienced analysts’ eyes (or “boots,” to follow the theme) monitoring the networks. The nature of the work combined with the priority of improved overall cybersecurity continues to show growth prospects, bucking the budget belt-tightening trend.

Read more of our perspective in our latest report: Federal Information Security Market, FY 2013-2018.

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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.

Sebelius testifies on federal health insurance exchange ‘debacle’

In a much-anticipated Capitol Hill hearing on Wednesday, Secretary of Health and Human Services Kathleen Sebelius testified before the House Energy and Commerce Committee on the failures of the federal health insurance exchange website.
 
The hearing, which veered far from the infrastructure of the website to the larger structural failures of the Affordable Care Act, took on a predictable tenor with incredulous Republicans grilling the defensive former governor of Kansas, as her fellow Democrats on the committee took a more conciliatory tone. For anyone who has been following the Obamacare saga, the secretary’s testimony offered limited new information. Here is a synopsis of what we learned at yesterday’s hearing:
  • The buck stops with Sebelius, as she advised both Congress and the American public to hold her responsible.
  • The secretary found the entire website experience a “miserably frustrating … debacle,” for which she apologized to the populace while advising them that no delay in enrollment is necessary as the website is fixable.
  • Sebelius believes that when it is judged “by any fair measure,” the Affordable Care Act is working.
  •  Privacy and security concerns are legitimate and are being addressed by the fix currently underway for the website. 
  • HHS spent $118 million on the contracts to develop the Healthcare.gov website, with another $56 million in IT spending to support the website.
  • HHS has a total obligated contract in the amount of $197 million with CGI through March 2014.
Aside from those above, one more revelation seemed to expose the root of the website’s problem. The secretary reported that QSSI was brought in as the systems integrator after the website launched. Sebelius reported that the company had done excellent work with the Federal Data Hub and she believed it would repeat that performance in fixing the structural problems plaguing the system. This begged the question: Who was the system integrator in charge of the project during the run-up to the exchange launch?
 
Sebelius revealed, after intense questioning from a Republican congresswoman, that a team from the Centers for Medicare and Medicaid Services (CMS) operated as the system integrator at the time of launch. The team, headed by CMS Chief Operating Officer Michelle Snyder, was quite obviously deficient in this role and was rightfully replaced by a proven contractor.
 
Analyst’s Take
 
Politics runs rampant in any discussion of the Affordable Care Act. As one of the most sweeping and contentious pieces of legislation in modern history, this comes as no shock. In the nearly five years since insurance reform became a topic of conversation, not a single elected Republican on the national level has expressed support for the ACA. Some provisions have gained Republican approval in the states, but the thrust of one-half of the political system has clearly been to scrap the law and start over.
 
Enter October 1, 2013. The website launch was a bust. Millions of individuals with insurance on the individual market realized, as the Fact Checker Column in the Washington Post points out, that they could not in fact keep their plans. With that as the backdrop, it is no wonder that many lawmakers are out for blood. Still, through all this noise emerge concrete lessons for governments and vendors alike.
  • The alignment of system implementation deadlines around a political calendar often hinders success. Since the passage of the law, the vendor community knew the deadline for exchange implementation on the state and federal level was unrealistic. Yet, absent a more plausible explanation, it seems politics dictated a steadfast deadline of October 1, 2013, for the exchanges to be operational. 
  • The micromanagement of the website launch by the CMS team, ostensibly unqualified for such an involved task, was a poor move with such tight deadlines. Though needing more time for an excellent product delivery, the private sector could have grudgingly met the stringent deadline with, at the very minimum, a functioning website. 
  • The criticism of the cost of the contracts to implement the website has gained traction only because it doesn’t work. Had the website worked on day one, those who criticize the amount paid to vendors for the build would have been neutered by the success of a signature feature of the ACA. The large amount of taxpayer dollars required to build such a complex infrastructure is understandable only if the infrastructure is a success. Absent that success, greater spending scrutiny occurs from politicians and journalists to accentuate tales of failure. 
Finally, it is clear the website will be fixed, eventually. The question becomes: To what end does all this bad press prevent the overall success of the ACA? From the perspective of state government, it seems clear that this debacle is not going far to convince the reticent majority of governors who rejected a state-run exchange. As time goes on, we will see if those leaders will use the federal experience as a warning shot of the perils inherent in implementing a flawed system, or as inspiration for how not to proceed as they take up the exchange mantle.

 

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