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FY 2016 President’s Budget Request – GovWin FIA’s First Take

The White House released its FY 2016 Budget request today, perhaps the earliest annual budget release of the Obama Administration thus far. Several of my fellow GovWin Federal Industry Analysis (FIA) colleagues and I wasted no time in delving into this budget so that we could provide you with our first impressions of what we found noteworthy.

Similar to each presidential budget, the FY 2016 President’s Budget Request provides a blueprint for the administration’s policy and legislative agenda for the coming fiscal year and beyond. We reviewed the largest federal departments’ discretionary budgets to get a sense of direction and priorities for FY 2016, which begins October 1, 2015. Below is a summary table followed by key funding details and initiatives arranged by department.


Defense

DoD’s discretionary base budget request is up nearly 8% over FY 2015. The $534.3B in discretionary funding is $38.2B more than the FY 2015 enacted level.

Funding highlights include:

  • $126.53B for the Army (an increase of $7.B from the FY 2015 enacted level)
  • $161.0B for the Navy (an increase of $11.8B from the FY 2015 enacted level)
  • $152.9B for the Air Force (an increase of $16B from the FY 2015 enacted level)
  • $94.0B for Defense-Wide operations (an increase of $3.4B from the FY 2015 enacted level)
  • $51B in Oversees Contingency Operations (OCO) funding across all DoD (a decrease of $13.4B from the FY 2015 enacted level)
  • $209.9B for DoD operations and maintenance funding (an increase of $14.5B from the FY 2015 enacted level)
  • $107.7B for DoD procurement funding (an increase of $14.1B from the FY 2015 enacted level)
  • $69.8B in DoD RDT&E funding (an increase of $6.3B from the FY 2015 enacted level)
  • Invests $12.3B in DoD’s Science and Technology (S&T) Program, including $5.5B in Advanced Technology Development
  • Provides $7.4B for C4I systems
  • Includes $7.1B for DoD Space Investment Programs
  • Funds construction of the Joint Operations Center for U.S. Cyber Command at Fort Meade, Maryland
  • Funds ongoing investments in the DoD’s Joint Information Environment
  • Modestly increases the budget of the Defense Advanced Research Projects Agency from $2.9B to 3B
  • Allocates $32.3B for the Defense Health Program
  • Allocates $109.4M for communications upgrades at the new U.S. Strategic Air Command headquarters building

Agriculture

The president’s budget request includes $23.5B in discretionary appropriations for the Department of Agriculture, 1.25% below the enacted level of $23.8B in Fiscal Year 2015.

Funding highlights include:

  • $1B in financial assistance to rural businesses
  • $2.2B in community facility loans for rural areas
  • $6.4B for direct and guaranteed farm ownership and operating loans
  • $450M for competitive, peer-reviewed research for fundamental and applied agricultural sciences
  • $200M in funding for Watershed and Flood Preventions Operations
  • $206M to invest in the backlog of priority facility construction and renovation for the Agricultural Research Service
  • $60M to modernize the Headquarters South Building
  • $7.6M for a digital services team to improve the efficiency and effectiveness of USDA IT systems

Commerce

The president’s budget request provides $9.8B in base discretionary funding to Commerce, an 11% increase over FY 2015 enacted levels. These funds are intended to promote growth through trade, invest, and innovation as well as a data-driven economy.

Funding highlights include:

  • Provides funding to National Institute of Standards and Technology in support of advance in areas like cybersecurity and advanced manufacturing. Efforts to work with industry are called out in particular, such as implementing the Cybersecurity Framework of standards and best practices. Funding will also sustain work on initiatives like cybersecurity automation and the National Strategy for Trusted Identities in Cyberspace (NSTIC).
  • $1.5B to Census to support research, development, and implementation of the 2020 Census. The Census Bureau will also include planned increase for the Economic Census and advance initiatives to make data and resources publicly accessible.
  • Continues strong funding for National Oceanic and Atmospheric Administration, including $2B for next generation weather satellites, including $380M for the Polar Follow-On satellites. $147M in funding is also provided for the construction of an ocean survey vessel.
  • $1.1B for National Weather Service includes increases in funding for critical infrastructure.
  • Includes $3M to establish an in-house Idea Lab to pursue innovative approaches to achieve the agency’s strategic goals and objectives.
  • Requests $6M to build a digital services team for Department of Commerce dedicated to improving IT systems and services.
  • $497M for the International Trade Administration includes $20M to expand SelectUSA efforts to grow business investment in the United States.
  • Auctions 500MHz of federal spectrum, aiming to reduce the deficit by $40B over the next decade and provide greater commercial access to spectrum.

Energy

The president’s budget request provides $29.9B in base discretionary funding to Energy, a 10% increase over FY 2015 enacted levels. These funds are intended to support nuclear security, clean energy, environmental cleanup, climate change response, as well as science and innovation.

Funding highlights include:

  • $5B in funding supports transformational research and development for critical technology areas such as nuclear safety, grid modernization, solar and renewable energy, and energy efficiency.
  • $5.3B to support scientific research, especially in the physical sciences.
  • $12.6B for National Nuclear Security Administration, an 11% increase over FY 2015 enacted levels.
  • $5.8B for critical nuclear legacy cleanup responsibilities.
  • Expands efficiency initiatives introduced in FY 2015 to advance key priorities and improve project integration.

Health and Human Services

The president’s budget request provides $79.9B in base discretionary budget authority to HHS, a 0.3% decrease over FY 2015 enacted levels. 

Funding highlights include:

  • Supports the Affordable Care Act and operation of the Health Insurance Marketplace.
  • Provides $4.2B to serve 28.6 million patients at more than 9,000 health center sites in medically underserved communities. $2.7B of this amount is new mandatory funding.
  • Funds reform of health care delivery by finding better ways to deliver care, pay providers, and distribute information.
  • Promotes innovative medical research to maintain the nation’s leadership in the life sciences including research into Alzheimer’s disease.
  • Advances product development efforts to support procurement of next-generation medical countermeasures against chemical, biological, radiological, and nuclear threats with a $522M investment.
  • Accelerates progress in scientific and public health efforts to detect, prevent, and control illness and death related to antibiotic-resistant infections with funding of $993M.
  • Proposes targeted reforms to Medicare and Medicaid which are projected to save more than $400B over the next decade.
  • Provides the Indian Health Service with $5.1B, an increase of $461M over FY 2015 enacted levels, to expand health care services and construct clinics and sanitation facilities.
  • Includes $1.6B to bolster food safety activities.    
  • Promotes continued efforts to cut waste, fraud and abuse in Medicare and Medicaid including removing social security numbers from Medicare beneficiary ID cards.

Homeland Security **

DHS would receive $41.2B in base discretionary funding in the president’s budget request, a 7.9% increase over the FY 2015 $38.2B budget request level. DHS is currently operating under continuing resolution (CR) at the FY 2014 enacted budget level of $39.8B. This CR expires on 2/27 by which time Congress is expected to pass appropriations to cover the remainder of FY 2015.

Funding highlights include:

  • $3.7B for Aviation Security and Screening at the Transportation Security Administration (TSA) sustain aviation security and effectively align passenger screening resources based on risk. These risk-based security initiatives maximize security capabilities and expedite the screening process for low-risk travelers.
  • $132.3M for the Customs and Border Protection (CBP) Trusted Traveler Programs (TTP) to provide expedited travel for pre-approved, low-risk travelers through dedicated lanes and kiosks.
  • $101M for Radiological and Nuclear Detection Equipment for detecting and interdicting illicit radioactive or nuclear materials by the Domestic Nuclear Detection Office and other DHS components.
  • $85.3M for the CBP Non-Intrusive Inspection (NII) program for passive radiation scanning and X-ray/gamma-ray imaging of cargo and conveyances
  • $373.5M is provided to maintain necessary border security infrastructure and technology to improve CBP’s ability to detect and interdict illegal activity
  • $480M for network security, including the EINSTEIN3 Accelerated program to detect and prevent malicious traffic
  • $102.6M for the Continuous Diagnostics and Mitigation (CDM) program for hardware, software, and services that strengthen the operational network security
  • $1B to replace aging Coast Guard cutters, aircraft, electronic systems and shore infrastructure
  • An increase of $86.7M to enhance U.S. Secret Service capacity to protect senior leaders

Justice

The president’s budget request provides $28.7B in base discretionary funding to Justice, a 5% increase over FY 2015 enacted levels. These funds are intended to support core law enforcement needs, safe and secure prisons, and other Federal, State, Tribal and local programs.

Funding highlights include:

  • Strengthening investment in cybersecurity through over $200M in IT upgrades and tools to detect and deter cyber-attacks. Funds also support plans for a Federal Cyber Campus to co-locate critical civilian cybersecurity agencies.
  • Provides $97M to expand training and oversight for local law enforcement, increase the use of body worn cameras, and provide additional opportunities for reform through technical assistance and training.
  • $482M in funds to address the back log of immigration cases at the Executive Office of Immigration Review. These funds will support hiring judges and legal representation as well as expanding the Legal Orientation Program.
  • Efforts to combat violent extremism include $4M for research, $6M for model development, $2M for technical assistance, and $3M for projects to enhance collaboration between law enforcement, communities, and other stakeholders.
  • Credits applied to Justice’s discretionary budget authority for FY 2016 include $13.5B from the Crime Victims Fund (CVF) and $304M from the Assets Forfeiture Fund (AFF). Both of these figures are up from the FY 2015 enacted levels. The CVF is up 39% over FY 2015, while AFF is up 58% for the same period.

Transportation

The president’s budget request includes $14.3B in discretionary appropriations for the Department of Transportation, 3.5% less than the $13.8B enacted in Fiscal Year 2015.

Funding highlights include:

  • Creates a new Office of Safety Oversight to coordinate and improve safety efforts across all modes of transportation
  • Provides $956M in discretionary funding for modernization of the Next Generation Air Transportation System
  • Provides $478B in mandatory and discretionary funding over six years for a surface transportation reauthorization proposal, including:
    • $1.25B per year for the TIGER Grant program
    • $18B over six years for the President’s National Export Initiative
    • $23B for transit and passenger rail programs and $144B over six years to expand transit capital investment grants
    • $6B over six years to provide credit assistance for nationally or regionally significant transportation projects through the Transportation Infrastructure Finance and Innovation Act Program
  • Provides $29.4B in mandatory and discretionary funding over six years for a Critical Immediate Safety Investments Program to provide targeted infrastructure investments
  • Provides nearly $6B in mandatory and discretionary funding over six years for the National Highway Traffic Safety Administration
  • Invests $935M in mandatory and discretionary funding over six years for vehicle safety and innovation, including vehicle automation and vehicle-to-vehicle technologies

Treasury

The president’s budget request provides $12.8B in base discretionary budget authority to Treasury, a 4.9% increase over FY 2015 enacted levels.   

Funding highlights include:

  • Includes $2.9B for Treasury’s international assistance programs to promote economic growth, poverty reduction, action on climate change, and security through Multilateral Development Bank (MDB) investments in developing and emerging economies.
  • Funds increases in transparency and accountability in federal financial management and implements the Digital Transparency Act of 2014 (DATA Act). 
  • Proposes funding to transform Treasury’s digital services with the greatest impact to taxpayers and businesses so they are easier to use and more cost-effective to build and maintain.
  • Provides IRS with $12.3B in base discretionary resources, an increase of $1.3B from FY 2015, to restore taxpayer services to acceptable levels.  Funds are also provided to continue major IT projects, which aim to protect taxpayer information, modernize antiquated systems, continue development of a state-of-the-art online taxpayer experience. 

Veterans Affairs

The president’s budget request provides $70.2B in base discretionary budget authority to VA, a 7.8% increase over FY 2015 enacted levels. VA also received $15B in the Veteran Access, Choice, and Accountability Act of 2014.

Funding highlights include:

  • Continues the largest department-wide transformation in VA’s history through MyVA, an effort to reorient the department around the needs of veterans.
  • Improves veterans’ access to medical care by investing $60B.
  • Supports improvements in veterans’ mental health care, telehealth care, life-saving treatment for Hepatitis C, specialized care for women veterans, long-term care, and benefits for veterans’ caregivers.
  • Provides $1.4B for programs aimed at ending veteran homelessness in 2015.
  • Strengthens veterans benefit programs by proposing an increase of $85M to hire 770 new staff to improve timeliness of non-rating claims, reduce the inventory of veterans’ appeals, strengthen the fiduciary program and further enhance disability claims processing accuracy and efficiency through centralized mail and the national work queue.

FY 2016 Federal Information Technology Budget Request

As of publishing time, the Office of Management and Budget (OMB) had not yet published IT budget specifics, but topline numbers show a 2.5% increase for FY 2016. This puts the total IT request (including state and local grants and classified defense spending) at $86.4 billion compared to the FY 2015 estimate of $83.4B.

The administration’s priorities fall in line with many of the initiatives discussed in the FY 2015 request along with those launched by OMB and the Office of Federal Procurement Policy (OFPP).  Focus areas include:

  • $450 million to drive forward progress on cross-agency management priorities such as the U.S. Digital Service (USDS), PortfolioStat, Freeze the Footprint, and Open Data.
  • Providing funding to 25 agencies for the development of their own agency digital services teams.
  • Piloting new initiatives in IT acquisition that will increase digital acquisition capability within agencies, train agency personnel in digital IT acquisitions, and test innovative contracting models.
  • Increasing the use of Shared Services
  • Funding that will allow agencies to make progress in implementing the DATA Act and increase Federal spending transparency
  • Continue development of the government’s Category Management initiative to include:
    • Proposing legislation making it easier for vendors to bid on modestly-sized procurements and bringing more new companies into the Federal marketplace.
    • broadening the range of purchases that can be accomplished with minimal complexity and Government-unique requirements by requesting authority to raise the simplified acquisition threshold from $150,000 to $500,000.
    • Seeking new pilot authority to make it easier for agencies to set aside work for new small businesses and other firms with cutting edge/creative solutions that have limited experience selling to the federal government

Stay tuned to FIA as we will be publishing our complete analysis of the FY 2016 budget request in the coming weeks, where we will go into greater detail on the key initiatives, IT investments and contractor implications that will shape the federal IT marketplace for FY 2016.

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

 

Analyzing Federal Program Overlap is Difficult at Best

Finding duplicative federal programs in order to combine, consolidate, or eliminate them is next to impossible with current reporting mechanisms according to a recent GAO report. 

The GPRA Modernization Act of 2010 calls for the creation of an inventory of all federal programs, along with related budget and performance data, which could make it easier to better manage, reduce, or eliminate overlap and duplication.  Over the past four years, GAO has found over 90 areas where the government could benefit from reducing or removing fragmentation and duplication.

However, GAO’s recent report on the status of federal program inventories indicates that inconsistent definitions and information limit their usefulness.  OMB’s inventory guidance allowed for latitude regarding defining programs and the types of information reported.  This has led to non-uniform information across agencies, and made it difficult to spot duplication and overlap. 

Something which seems as simple as just defining what constitutes a “program” is a challenge across agencies.  OMB’s guidance has allowed flexibility in defining programs by allowing agencies to use different approaches based on their missions and programmatic tactics.  But because of these differing approaches, identifying similar programs across agencies is a challenge.

As part of GAO’s study, they attempted to locate programs across agencies related to science, technology, engineering, and mathematics (STEMS) using the agency inventories released by OMB in May 2013.  GAO only found nine programs out of 179 that matched exactly, and 51 others that were identified based on their program descriptions. 

GAO attributes the lack of comparability to the fact that the agencies did not work together when developing their inventories.  GAO believes collaboration among the agencies on program definitions and inventories would lead to identifying overlap and duplication. 

GAO recommends OMB and agencies take the following steps to ensure usefulness of program inventories: 

  • Present program-level budget information 
  • Provide complete performance information 
  • Consult with stakeholders

GAO further recommends that OMB require additional agencies to report inventories.  Currently, GPRAMA only requires 24 agencies to report.  GAO also suggests that tax expenditures be included in the federal program inventory, as well as web-based sorting capabilities. 

Threatening to complicate reporting even further, is the on-going implementation of the 2014 Digital Accountability and Transparency Act (DATA Act) which stipulates more program and budget data be displayed on federal websites.

Rooting out duplication, overlap and waste will be an iterative and on-going process.  Contractors need to be aware of advances in identifying overlapping programs, because progress could result in program, project and/or contract consolidations or cuts.  On the flip side, opportunities may arise for contractor assistance with program consolidation efforts.

 

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.

Energy Department Cloud Services Need Oversight

In September 2014, the Department of Energy's (DOE) Inspector General (IG) released findings from an audit of the cloud environments across DOE. The report highlighted several issues including problems with inventory management and implementation of security controls. These problems were linked to a more fundamental concern: DOE lacks a cloud strategy.

The DOE issues around cloud inventorying practices are reminiscent of challenges agencies encountered when taking stock of data centers and software applications. Lack of visibility and transparency raise difficulties around duplication of effort and ensuring return on investment for cloud services. DOE estimates that spending on independently acquired and managed cloud services are in excess of $30 million.

Reviews of eight contracts provided at six different locations determined that the contract did not properly or consistently address business and cybersecurity risks. The inconsistent implementation of security controls raises serious compliance issues with internal guidance as well as with the Federal Risk and Authorization Management Program (FedRAMP). The DOE cloud program audit found inconsistent and incomplete compliance with FedRAMP, which agencies were supposed to achieve by June 2014. More troublesome than having some programs in process of implementing requirement was the fact that DOE had erroneously reported to the Office of Management and Budget (OMB) that the majority of DOE cloud services met all FedRAMP requirements.

Departmental management concurred with the IG's recommendations, including the need to establish an enterprise approach to implementation of cloud computing and to ensure oversight of adoption efforts. The FY 2014-2018 DOE Information Resource Management (IRM) Strategic Plan replaces over 15 different strategic documents and efforts. One of the objectives outlined in the IRM document calls out a target for creating a network of the department's clouds, which may serve as a high level strategy. DOE plan to update its departmental cyber security program (DOE Order (O) 205.1B) to include clear requirements and guidance around oversight of cloud computing efforts. DOE is also in discussions with the FedRAMP program management office to evaluate DOE-specific FedRAMP requirements that would be included in the revision of DOE O 205.1 B. As for the issues around contracting inconsistencies, DOE expects to continue working on contracting guidance and standard clauses as well as leveraging work with the Federal CIO Council to identify and adopt best practices. All of the recommendations share the same estimated completion date of September 30, 2015.

DOE's IG attributes some of these issues to the lack of a comprehensive cloud strategy. For example, the inventory of cloud initiatives was incomplete. DOE reported only 44 ongoing initiatives to OMB. Review found, however, that DOE has at least 130 initiatives across 24 federal and contractor locations. An overarching strategy would have provided a foundation for coordination of efforts along with oversight and risk management.

It's fair to expect more reports on cloud implementation practices from other agencies to follow, since this DOE audit links back to a NASA audit and a government-wide review. In July 2013 NASA's IG published a report that found the agency lacked governance to support efficient cloud implementation. According to the DOE audit, "As a result of issues identified during [the NASA IG cloud program] audit, a Government-wide initiative was undertaken by the Council of Inspectors General for Integrity and Efficiency to provide insight to agency heads and lawmakers on how well the Federal government has adopted cloud computing technologies. In support of that effort, [the Energy Department] initiated this audit to determine whether the Department efficiently and effectively managed its cloud computing environment."

Historically, some agency reporting has fallen under other IT areas, like security. For example, USDA's audit of the department's information security included review of cloud services. Similar to the findings of the DOE audit, the USDAreport highlighted hurdles around contracting and managing risks. Another instance comes from the Department of Homeland Security (DHS).

More recently, however, reports have singled out cloud computing adoption as a focus. At the start of 2014, the Transportation Department announced it was auditing practices for acquiring and monitoring cloud services. In July of this year, the EPA released findings from its review of cloud technology adoption. Other agencies have announced or planned audits that are likely still in the works. Last December, for example, the Commerce Department announced that it had commenced an audit of cloud-computing environments. As part of the planned projects around cybersecurity, Department of Defense's IG audit plan for FY 2014 included evaluating the efficiency of their cloud migration strategy and efforts. With a number of reports still underway, it's too soon to fully assess how the government has fared in its adoption of cloud computing. So far, however, issues around governance, oversight and risk management appear to be thematic.

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

The DATA Act: The Road to Federal Funding and Spending Transparency

The Digital Accountability and Transparency Act (DATA) promises to lend visibility into the world of federal finances, and as such has received a good deal of attention since it was signed into law four months ago.  

The purpose of the act is to 

  • Disclose direct federal agency expenditures and link federal contract, loan, and grant spending information to federal programs to enable taxpayers and policy makers to track federal spending more effectively.  
  • Establish government-wide data standards for financial data and provide consistent, reliable, and searchable government-wide spending data that is displayed accurately for taxpayers and policy makers on USASpending.gov.  
  • Simplify reporting for entities receiving federal funds by streamlining reporting requirements and reducing compliance costs while improving transparency.  
  • Improve the quality of data submitted to USASpending.gov by holding federal agencies accountable for the completeness and accuracy of the data submitted. 
  • Apply approaches developed by the Recovery Accountability and Transparency Board to spending across the federal government.

Work has already begun to meet the seven year implementation timeline.   OMB and Treasury are tasked with delivering data standards by May 2015.   Agencies are to start submitting data that meets the new standards before May 2017. 

The DATA Act is different from other transparency laws in that oversight is baked into implementation requirements.  The Act calls for agency Inspectors General, in conjunction with GAO, to audit samples of spending data submitted to USASpending.gov to test for quality, timeliness, completeness and accuracy and to report findings to Congress three times over the next six years.  The first IG reports are due to Congress in November 2016.

On September 26th, Treasury released an RFI for the best data exchange standards implemented across the government or in the private sector.  Treasury and OMB are also creating a 12 to 36 month implementation roadmap. 

At a Data Transparency 2014 event in DC earlier this week, Dave Mader the controller of OMB said, "This will be a very iterative approach and we will rely on lessons learned, and we also will look at opportunities to experiment because we don't want to do, nor does anyone have the resources to build the world's biggest database. We believe that technology and data, and data analytics will allow us to create a very innovative approach for how to implement the next iteration of spending that's transparent to taxpayers."

Contractors will be affected by requirements to report data as a recipient of federal funds.  Also, opportunities will likely arise to assist with implementation of the act in the way of technology solutions for data entry, storage, retrieval, analysis and display.

 

Federal Shared Services Marketplace Goes Public

Since the spring of 2013, government agencies have been able to find and buy shared service offerings through an online database called Uncle Sam’s List. The site was launched by the Chief Information Officers Council as part of a strategy to promote use of shared services. By August 2013, over 100 shared services were listed, and the total number was still growing. Now, those shared service listings are being made public to improve government-industry collaboration. 

The Office of Management and Budget (OMB) issued its Shared Services Strategy in 2012. The plan outlined steps for agencies to take toward reducing over $46 billion in duplicative IT investments, focusing on commodity IT purchases as well as government-wide and intra-agency shared services. In the four months following the strategy release, agencies faced a series of deadlines to advance enterprise planning and the Shared-First approach. Since the initiative launched, agency adoption of shared services through Uncle Sam’s List has simplified acquisition and delivered cost savings. For example, by consolidating computer buying contracts, the Department of Commerce was able to cut its spending on desktop computers by 35 percent and achieve over $200 million annually in administrative costs. 

The information-gathering phase of promoting shared services involved collecting data about what agencies are paying for different products and services. Gathering that data proved valuable early on by highlighting the broad range in prices the government has paid for the same capability. Different agencies were paying anywhere from $21 to $98 per month for identical cellphone plans. That knowledge allows agencies to identify the lower end of the spectrum and target moving toward that price point. To date, Uncle Sam’s List has been maintained within the MAX.gov internal government collaboration site. Initially, the community was entirely maintained by the CIO Council’s Shared Services subcommittee, who determined which service areas, providers, and contracts got listed. That, however, is about to change. 

On September 16, 2014, Federal Computer Week reported that Uncle Sam’s List will be going public. Over the next weeks, version 1.2 of Uncle Sam’s List will get updated with an XML feed. Once the database is public, federal and commercial providers will be able to feed into the list. Building on interview comments from the co-chairman of the CIO Council’s Shared Services Task Force, the article suggests that the move is expected to encourage “a balanced and competitive environment.” 

Vendor Implications 

Easier access to data about federal and commercial commodity IT and service offerings will undoubtedly impact market competition. The ability for industry to access and add to the database will create new opportunities for vendors to provide IT services to agencies targeting agile delivery. The move could also provide vendors with greater visibility into competition within the federal commodity IT and service marketplace. The clearinghouse of services could allow greater insight into the business opportunities around shared services and reframe how vendors characterize markets for their products and services, raising vendor profiles as well as making it easier to identify common requirements being met through shared services.

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

 

GAO: Federal Agencies are Falling Short in Overseeing IT Contractors

Federal agencies need to improve at overseeing the IT contractors that operate their computer systems and process their information, according to a study by the Government Accountability Office (GAO). Agencies are legally required to ensure that contractors adequately protect these assets, but GAO shows that there are inconsistencies among agencies’ handling of this responsibility.

GAO set out to assess how well certain agencies oversee the security and privacy controls for systems that are operated by contractors and how well the agencies with government-wide security and privacy guidance and oversight responsibilities were doing in helping them. In their audit, GAO reviewed the implementation of security and privacy controls for selected contractor-operated systems across six federal agencies, based on their reported number of contractor-operated systems. These were the Departments of Energy (DOE), Homeland Security (DHS), State, and Transportation (DOT), the Environmental Protection Agency (EPA) and the Office of Personnel Management (OPM). 

GAO found that the agencies generally had established security and privacy requirements for contractors to follow and prepared for assessments to determine the effectiveness of contractor implementation of controls. However, all but DHS were inconsistent in overseeing the execution and review of those assessments. One frequent area of inconsistency was in executing test plans that would identify potential security and privacy risks. In one example, GAO found that the DOT officials did not have evidence that 44 of 133 contractor employees operating one particular system had undergone a current background investigation.

A contributing reason for shortfalls that GAO identified in agency oversight of contractors was that agencies had not effectively documented procedures to direct officials in performing such oversight activities. None of the agencies had procedures in place to direct officials in how to conduct such oversight and that led to inconsistencies.

Another area mentioned by GAO is inconsistently-applied or unclear guidance. OMB FISMA reporting instructions to agencies state that systems operated by contractors are to be reported as part of the agency’s system inventory. But GAO found that agencies are interpreting and applying the guidance differently because the guidance for categorizing and reporting contractor-operated systems does not clearly define what constitutes a contractor-operated system. The difference in application causes many systems that are contractor-operated to not be classified as such.  This has resulted in incomplete information on the number of contractor-operated systems within the government.

Potential Cost Implications

Given the areas of shortfall within agencies it is possible that renewed efforts could have cost and administrative implications in several areas:

  • Personnel Security – Scrutiny of contractor background investigations is at an all-time high and inconsistencies discovered by GAO may result in direct costs and/or delays to companies and agencies while sufficient background investigations are completed. Similar implications may result if required agency-specific training in security or contingency planning has not been consistently administered.
  • Compliance Efforts – Given GAO’s spotlight on inconsistencies in how systems are evaluated, assessments of systems and personnel for compliance with agency requirements will likely increase, adding short-term burden until processes are in place and efforts are routine.
  • FISMA Assessment – Increased clarity or education from OMB on applying their FISMA reporting standards for contractor-operated systems could increase scrutiny on some systems – both government-owned, contractor-operated and contractor-owned, contractor-operated.  Many of these systems may have been previously overlooked or mis-categorized, which could spur deeper scrutiny and increased costs.

Potential Contractor Opportunities

As agencies strive to improve they may look to industry experts for assistance in the following areas:

  • Procedure Development – Agencies will need to document the procedures for their officials to follow in order to perform effective oversight of contractors. While these efforts may be considered inherently governmental in nature, some agencies may seek the help of contracted experts to aid in solidifying such procedures. Expect agencies to maintain directive control over this process.
  • Independent Assessments – GAO found that five of the six agencies they studied used independent assessors for system reviews, as required by NIST, and this included contracting for these assessment services. There may be continued opportunities for contractors to find work in this area. Expect agency officials to verify that the selected assessor is independent.
  • Test Plan Development and Execution – While most agencies that GAO audited had developed test plans, almost none of them had effectively executed test plans. Here is another area where independent contracted services may be in demand.

Considering GAO’s recommendations focus on both procedures and policies – that agencies develop procedures for contractor oversight and that OMB clarify reporting instructions to agencies – it will take some time for agencies to fully address the concerns raised in the report.

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

The U.S. Digital Service – “Hey, Mikey!”

Walking the halls of the West Wing in a rumpled casual button-up shirt, Mikey Dickerson’s mission as the Administrator for the new U.S. Digital Service is “to improve and simplify the digital experience that people and businesses have with their government.”

Mikey’s name immediately brought back memories for me of Life Cereal’s Mikey commercials in the early 1970s.  The line “He likes it! Hey Mikey!” came to mind.  And in the same way Life was bringing to market a new cereal that was good for you, the federal government is trying to break down barriers to ignite innovation. 

Mikey is different from the typical Washington government leader, from his casual attire to his unassuming name.  What he brings to the table is experience, knowledge, speed and out-of-the-box thinking.  He’s not weighed down by bureaucratic work experience.  He comes from a more nibble environment which the White House hopes to bestow across government. 

Mikey’s first foray into government was last year as part of the Healthcare.gov rescue team.  The aim of the U.S. Digital Service is to build on the success of that effort by bringing a small team of America’s best digital experts together to collaborate with other government agencies and make websites more consumer friendly, identify and fix problems, and help upgrade the government’s technology infrastructure.

The White House press release announcing the establishment of the U.S. Digital Service states that it will accomplish its mission by:

  • Establishing standards to bring the government’s digital services in line with the best private sector services  
  • Identifying common technology patterns that will help us scale services effectively  
  • Collaborating with agencies to identify and address gaps in their capacity to design, develop, deploy and operate excellent citizen-facing services  
  • Providing accountability to ensure agencies see results

During a testimony in May, federal CIO Steve VanRoekel called the idea of a U.S. Digital Service a "centralized, world-class capability...made up of our country’s brightest digital talent."  This team will be "charged with

removing barriers to exceptional government service delivery and remaking the digital experiences that citizens and businesses have with their government."

 

To get to know Mikey better, click here to watch the White House’s video “Day One: Mikey Dickerson, U.S. Digital Service Administrator.”  I find his demeanor and persona refreshing.  He states in the video that a lot of people want to know if he’s wearing a suit every day.  It’s their way of asking, “is this the same old business as usual or are they (the government) actually going to listen.”  His philosophy, as well as that of much of Silicon Valley, is that innovation doesn’t happen in a suit.

 

OMB Proposes Changes to A-11 to Accommodate DATA Act Implementation

The DATA Act warrants major changes to the way agencies prepare and submit their annual budget documents to OMB.  OMB drafted changes to circular A-11, the federal instructions for agency budget submissions, which will support DATA Act implementation over the next several years.

Federal News Radio recently obtained this draft document detailing proposed changes and a timeline for implementation.

Agencies are expected to implement the complex requirements of the DATA Act with no new funding.  However, Congress is giving civilian agencies three years for implementation and DOD five years.

Overall major agency DATA Act requirements include:

  • Expansion of data posted on USAspending.gov 
  • Establishment of data standards for USAspending.gov 
  • Recommendations for streamlining recipient reporting 
  • Establishment of a Data Analysis Center  
  • Reporting of non-tax debt

The proposed changes to the A-11 address the DATA Act requirement for agencies to report obligations and outlays in three different ways:  program activity, object class, and program activity by object class. 

OMB has named their SF 133 Report on Budget Execution and Budgetary Resources as a common starting point for data to be used to fulfill requirements of the DATA Act.  OMB’s proposed A-11 changes state, “The SF 133 provides a solid foundation to respond to two requirements in the DATA Act: (1) reporting all data, government-wide, and (2) reporting accurate data.”

The DATA Act calls for agencies to report obligations outlays by program activity, however these program activities do not necessarily track directly to the detailed data in agency financial systems.  OMB’s response to Congress requests that agencies be able to characterize “program activity,” as one of the following, not the current definition of program activity used in the president’s budget:

  • An entire Treasury Appropriation Fund Symbol (TAFS), e.g. DOT’s Surface Transportation Priorities (69-0538 /X) 
  • A single Category B project in a given TAFS 
  • Each of several Category B projects in a given TAFS 
  • A Category B project from each of two TAFSs, e.g. ED’s Career, Technical, and Adult Education account has a program, Regional Education Labs, funded in two TAFSs (91-1100 14\15 and 91-1100 13\14) 
  • A program reporting category (used on the apportionment and typically housed as an allotment or sub-allotment in the agency system) used in one TAFS or two or more TAFSs.

OMB would like to be able to refer to any of the above as a “DATA Act program” and use them to fulfill the requirement for reporting outlays and obligations by program activity.

Additionally, OMB recommends not to immediately implement the requirement for reporting program spending by object class.  Object classes categorize federal spending into specific product and service categories.  Major object classes include personnel compensation and benefits; contractual services and supplies; acquisition of assets; grants and fixed charges; and other.

According to OMB, past efforts to capture program spending by object class have failed.  OMB is concerned about the infrastructure necessary to support accurate and consistent reporting of object class data by program.  However, OMB believes agencies will be able to supply outlays and obligations by overall object class to USAspending.gov in the nearer term. 

In the long run, DATA Act requirements should make federal spending data more transparent, but due to the lack of funding to support this effort, implementation will be a challenge and will take a number of years. 

 

GAO Testifies Regarding Ailing IT Investments

GAO’s David A. Powner, Director Information Technology Management Issues, testified before the Senate subcommittee on Efficiency and Effectiveness of Federal Programs last week that $1.4 billion worth of federal IT investments are in peril and another $8.6 billion need attention.

Powner stated before the subcommittee under the Senate Committee on Homeland Security and Governmental Affairs that according to the OMB IT Dashboard 183 federal investments are in jeopardy, equating to $10 billion.  “OMB and agencies need to aggressively govern these at-risk investments using TechStat sessions and other governance mechanisms,” Powner said.

 

Last month, Powner appeared before the entire Senate Committee for Homeland Security and Governmental Affairs on Identifying Critical Factors for Success in IT Acquisition to offer insight into best practices and reform initiatives that can help improve IT investment management.  Expanded use of critical success factors in IT acquisition, such as active stakeholder engagement and support from agency executives, along with further implementation of government and industry best practices, will better position agencies to more effectively deliver mission-critical systems, according to GAO.

The IT Dashboard, launched by OMB, has been one key reform issue.  The IT Dashboard was meant to help mitigate risk in federal IT programs and it has increased visibility and garnered success.  However, it has its weaknesses.  GAO issued a report in 2011 which voiced concerns about accuracy and reliability of dashboard data, but also pointed out that data was improving over time.  Recently, GAO reported that agencies had removed major investments from the dashboard which raises concerns about transparency.  Additionally, GAO noted that the timeliness of updates to the dashboard was lacking.  As of December 2013, the public version of the dashboard was not updated 15 of the previous 24 months.

Powner also cited OMB recommendations for increased incremental development, but GAO’s recent findings indicate that almost 75% of investments reviewed did not plan to deliver capabilities every six months and less than half planned to deliver capabilities in 12 month cycles.

In recent reports, GAO has also offered recommendations for PortfolioStat efforts.  PortfolioStat requires agencies to conduct annual reviews of their IT portfolios and make decisions about eliminating duplication.  This initiative has the potential to save $5.8 billion through FY 2015, however weaknesses exist in the implementation of the initiative across agencies.  One implementation issue revolves around CIO authority.  

With over $80 billion in federal IT spending per year, it’s incumbent upon agencies and the administration to learn from successful IT implementations, as well as failed projects.  While use of best practices, legislation, and OMB efforts at transparency and oversight have improved IT execution and spending, continued leadership and attention is necessary to build on current progress.

 

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