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State budget overview: Critical information on priorities and funding for vendors

As spring progresses, news from most states is centered on legislative actions (some controversial) passed before the annual sine die adjournment of the state legislature. With that backdrop, many state legislatures will approve budgets for the coming fiscal year or biennium. Beyond the headlines about the growth of government and funding cuts to pet projects, or the spin promulgated by lawmakers’ press releases and governor budget addresses, vendors can find essential information on state priorities.

A state’s budget and how it passed into law is important information for a vendor to have when deciding in which states or localities to compete for business. For most states, the budget process follows the same approval path by the full legislature and the governor’s signature. The first step in this process generally comes from the state agencies themselves. In most cases, these agencies report to the governor as part of the executive branch. The agencies conduct their own planning and budgeting process and submit a request to the governor’s budget team or office. The governor and his or her team then decide which priorities and funding to include and compile a document of the governor’s recommendations for submittal to the state legislature.

At Deltek, we spend quite a bit of time compiling and analyzing the state governors’ recommended budgets. The budgets, along with other compiled data,  are contained in Deltek’s State Government Profiles. The profiles provide essential and in-depth reference and research on state budgets, procurement, and organizational details to assist contractors in building important state buyer relationships and quickly ramping up new government sales professionals.

A governor’s proposed budget is by no means the final budget that makes it out of a state legislature, though it provides valuable insight about the executive priorities and the fiscal condition of the state. These documents also provide us with historical expenditure data, which allows for a more in-depth analysis of budget trends and fiscal realities. 

Following the governor’s lead, the state legislature begins work on their own version of the budget. Sometimes they use the governor’s recommendations as a starting point, but this is not always the case in adversarial political environments. Both houses of the legislature (for every state but Nebraska) weigh in on the budget as it goes through the normal process of committee and floor votes, and then conference committees work to reconcile any differences. The legislature submits the budget to the governor and he or she decides to approve it or not.  

For vendors, both the governor’s proposed budget and the final version are important documents. They can help to understand both the priorities of an administration and the reality of the political system and/or fiscal climate. Of course, they also offer insight into exactly where state funding is flowing and which departments will be looking for vendor support. 

In the coming months, look for the compilation of state budget data, including IT line items and detailed Deltek analysis of this data. In addition, vendors in the architecture, engineering and construction (AEC) space should watch for more budget data specific to state investment in AEC as outlined in state capital budgets.

You can learn more about state budgets in Deltek’s State Government Profiles. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial


Cybersecurity Meets Soap Opera in CDM Dashboard Competition

In a budget-constrained federal IT market the competition for cybersecurity work is bound to become increasingly competitive, even cut-throat. And when things get this way a certain amount of drama is sure to follow. Such is the case with a Department of Homeland Security’s Continuous Diagnostics and Mitigation (CDM) Dashboard tools competition where a premature award announcement has combined with accusations of acquisition rule-breaking to add controversy to the process.

DHS announced last summer the creation of its $6 billion Continuous Diagnostics & Mitigation (CDM) program BPA with awards to 17 primes and more than 20 subcontractors. The government-wide effort is in partnership with the General Services Administration (GSA) which is acting as the procurement agency and has established a portal to facilitate CDM program purchases. Last March, GSA awarded a contract for the CDM Dashboard design and implementation effort to Metrica Team Venture. So far, so good.

The drama started when an official with RSA announced in a blog post that DHS has selected RSA Archer's GRC solution for its CDM Dashboard effort. FCW first reported on the unofficial award announcement before the story was later clarified that RSA’s product is a finalist for the contract, but the selection process is not yet complete.  (The RSA official’s blog post has since been deleted.)

The story gained further drama when it came to light that the firm that had won the Alliant Small Business contract to evaluate the CDM Dashboard tools bid, Metrica Team Venture, is being accused of allowing one of its team members, InfoReliance, to market the RSA products (another team member) during the period between GSA's awarding the Alliant Small Business contract to Metrica and the agency's decision on the Dashboard vendor.  Agiliance, the firm that has brought the complaint to GSA, is asserting organizational conflict of interest (OCI) and marketing practices that are forbidden under federal acquisition rules, according to a subsequent article in which FCW appears to have seen their letter to GSA.

To make things even more colorful, Agiliance’s letter to GSA is not a formal protest. It is unclear whether the move was made to preempt the need for Agiliance to protest the forthcoming DHS Dashboard tool award or if it was because Agiliance is not an Alliant Small Business contract holder, or both. Either way, it’s clear that they are trying to get GSA to take a closer look at the process that is unfolding and to take action.

These events underscore how competitive the market has become and will continue to be in the close-knit world of cybersecurity. In an era where winning or losing a contract can mean life of death for your company it is crucial that vendors know the acquisition rules and keep solid documentation of your processes out of self-protection.  Further, any appearance of possible impropriety – even if none exists – will raise hackles in an increasingly competitive market where awards are often “winner takes all.”

Also, Agiliance’s letter to GSA could be considered a form of “protest by another name” where a company sees anomalies that raise their concern enough to look for ways to raise a flag in a formal way. Such methods may grow in frequency as federal agencies look for efficiencies in their acquisition processes like turning to GSA or another agency to facilitate procurements.

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

Deltek Pulse: Health and human services month in review, February 2014

Last month, the health and human services team saw the release of approximately 900 solicitations with either heath 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, Pennsylvania and Texas saw the largest number of health and human services-related opportunities, while the state of Wyoming had no related activity.

Notable Opportunities

  •  The Connecticut Department of Children and Families released a request for information (RFI) on February 19 for its Statewide Automated Child Welfare Information System (SACWIS). The limitations of the state’s current SACWIS (LINK) are numerous, given that LINK was initially implemented in 1996.
  • The South Carolina Department of Health and Human Services released an RFI on February 6 for technologies and related services that can be used to advance price and quality transparency in health care for the state.
  • The California Department of Public Health released a draft invitation for bids (IFB) for consulting services relating to the California Immunization Registry (CAIR) 2.0 System.
  • The Delaware Department of Health and Social Services, Division of Public Health, is currently working on a request for proposals (RFP) for Women, Infants and Children (WIC) electronic benefit transfer (EBT) services. The state is planning to implement an online system.
  • The New York Department of Health recently confirmed that it will be releasing an RFP for an all-payer claims database (APCD) data intake solution. The state previously released an RFI for these services.
  • The Louisiana Department of Children and Family Services released an RFI on February 7 for Disaster Supplemental Nutrition Assistance Program (DSNAP) services. The department’s Office of Emergency Preparedness is seeking information from qualified companies that can demonstrate the capacity to design and maintain DSNAP in any contingency. Responses are due on March 10, 2014.
  • The Alabama Department of Human Resources released an RFP for SNAP quality control review assessment and training. The department plans to develop a new review process that will result in improved accuracy in the review of SNAP cases.

Analyst’s Take

Again, the month of February brought several notable opportunities released in the health care and human services space. States will continue to tweak their health insurance exchange (HIX) systems to make sure they are functioning properly for consumers. State officials will also start thinking about ways to ensure these systems are financially sustainable from 2015 and beyond, since grant funding from the Department of Health and Human Services (HHS) will close at the end of 2014. Vendors needing an updated report regarding the HIX market can find a new Deltek Industry Analysis piece, here. Vendors should also be on the lookout for an upcoming Deltek report on the ever-evolving MMIS market, expected later this spring.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.




Fort Wayne bidding process met with controversy

Proposals were received from several agencies in response to Fort Wayne, Indiana’s solicitation for a new emergency communications system for its police, fire, and paramedics agencies. After the bidding process was complete, Motorola was found to have submitted the only complete bid for the system.


The city of Fort Wayne along with Allen County encompass the Multi-Agency Communications Partnership (MACP) responsible for releasing the request for proposals (RFP) that has created backlash from participating vendors, most notably Raytheon.


Raytheon Network Centric Systems submitted a letter on October 26 claiming Fort Wayne’s bidding process was unfair, not subject to competition, and that the specifications were biased and catered toward Motorola. The core of the argument comes from the need for compatibility between the requested P25 radio system and the current SmartNet system provided by Motorola. The county’s SmartNet system is an 800MHz trunked radio system used by all public service entities. The specifications for the new radio system required interoperability and full integration with the existing Motorola SmartNet system, but the city stated it is willing to consider other solutions.


Others have joined Raytheon in voicing their concern about the unfair bidding process and are arguing that because specifications are company-specific, they will cost taxpayers millions of unnecessary dollars. The city estimates the project could cost up to $24 million, but a representative from RELM Wireless Corporation, another bidder on the project, said the city could save between $2.8 million and $6.3 million by considering another solution.


This story is not so unfamiliar. Earlier in 2011, Raytheon and Motorola were at odds when Raytheon was selected for a $700 million contract to build out the Los Angeles Regional Interoperable Communications System (LA-RICS). During negotiations with Raytheon, Motorola issued a protest against the award and claimed the county had distributed proprietary information, which caused the project to ultimately be rebid.


Analyst’s Take


It is not uncommon for procurement practices to be challenged, especially with $24 million on the line. In the case of Fort Wayne, the city could be searching for its own ways to save money. By integrating the new radio system with the current SmartNet system, although seemingly biased, the city avoids having to replace the county’s entire communications system. Although this project is much smaller in scope than LA-RICS, Motorola and Raytheon once again prove to be the front runners for communications system contracts. 


It is important for vendors to make sure they address their proposals in such a way to meet a city, county or state’s current needs. Vendors should always be aware of existing systems and technologies and propose a viable solution to work with those components, or structure their proposals to offer something better. Vendors should also familiarize themselves with different protest rules and regulations in case bidding procedures are challenged. In addition, vendors should learn how to appeal an award in the event the resulting contract is protested.






STARCOM 21 Resurfaces

The state of Illinois' STARCOM 21 project that roared with controversy earlier this year has resurfaced once again. A lot of backlash resulted from STARCOM 21's $114 million soul-source contract to Motorola, awarded in May, but that hasn't stopped the project from expanding. Illinois recently decided to contract out radio equipment compatible with the STARCOM 21 network through a new invitation for bid (IFB) released on September 13, 2011.

Initially, Harris Corporation filed a formal protest alleging the awarded Motorola contract was a monopoly and bypassed open competition between vendors. The STARCOM 21 network services more than 18,000 subscribers and is owned and operated by Motorola. The intention of the past state procurement was to allow continued use of the existing STARCOM 21 network in order to maintain infrastructure and leverage the original investment.

The new solicitation is looking to establish a statewide indefinite quantity master contract(s) for the purchase of STARCOM 21 compatible subscriber radio equipment (P25) along with associated installation, extended warranty, parts, and accessories for various state agencies, officials, boards and commissions. All radios must be FCC type-accepted and PC programmable. Proposals are due October 4, 2011. Vendors with equipment not currently approved for the STARCOM 21 network are eligible to bid, but must have the equipment approved to operate on the network after the award is posted.

Analyst's Take

With this contract being more equipment-based as opposed to infrastructure-related, this may be an opportunity for new vendors to gain the upper hand. It is likely that big-name corporations such as Motorola or Harris Corporation may not even bid on this contract. Although much controversy may not arise this time around, it is still important for vendors to thoroughly research before bid proceedings. Vendors should find out what most satisfies the customer and then properly gauge their pricing accordingly. Also, it is always important to be aware of protest procedures in the event a contract is deemed unfair.

Justice, public safety and homeland security August review

Office work tends to slow to a crawl in August with employees taking advantage of school breaks and warm weather to get out of the office. Government is no different. August proved to be a slow month for the justice and public safety market. That said, several trends emerged throughout the month, including an increase in the number of local governments focusing on purchasing new or upgraded radio systems. Numerous counties in Pennsylvania, including Clinton, Montgomery and Schullykill, are moving closer to releasing solicitations while determining what sort of system to implement. Chester County, Pa. released a solicitation for a 700/800MHz public safety radio system. Two counties in Georgia also released solicitations for new radio systems. Gordon County is calling for an 800MHz, APCO P25 system. Rockdale County, on the other hand, has not specified what type of system it prefers; county officials have stated that either a 700 or 800 MHz system is acceptable so long as it meets the FCC narrowbanding requirements.

The second trend that emerged in August was the move toward kiosk-based services for motor vehicle departments and inmate registration. New Mexico released a request for information (RFI) for a motor vehicle division kiosk project similar to the RFI released in 2010 by the Connecticut Department of Transportation. Nevada awarded two kiosk projects in August – one for DMV registration, which was awarded to Intellectual Technology Inc. for $27,591,949. The second was for inmate kiosks and was awarded to Keefe Group and JPay Inc. for a total of $26.8 million. It is too early to tell whether kiosks will be an emerging trend; however, it is likely that they will become an attractive option as states and counties are forced to cut their budgets (including personnel). While the initial expenditure is often substantial, they could save millions in salary expenditures, not to mention time for those waiting at the DMV.

As mentioned in last month's recap, the Los Angeles Regional Interoperable Communications System (LA-RICS) project, which had originally been slated to be awarded to Raytheon, was waylaid due to a breach in the state's procurement laws. It was announced that the project should have been procured for using three separate solicitations rather than one overarching request for proposals (RFP). Just six short weeks after making the announcement, Los Angeles is expected to release the new solicitations sometime this week. As these solicitations will each cover a smaller scope than the original RFP, this will provide smaller and more specialized vendors the chance to get in the game either though responding to the solicitation on their own or through partnering with larger companies. For companies that responded to the original solicitation, this rerelease provides an opportunity to rethink pricing strategy and respond in a more competitive fashion.

Florida reached a milestone on September 1 that many thought would never come: the implementation of the state's prescription drug monitoring program (PDMD), the Electronic Florida Online Reporting Controlled Substance Evaluation (E-FORCSE). After many problems and several false starts, the contract was finally awarded to Health Information Designs last spring. The program ran into problems early in the process when a protest was lodged on the contracting process shortly after the release of an RFP. Next, Governor Scott threatened to stop the creation of the program, which Deltek Analyst Evan Halperin discussed in his February blog. After requests from the ONDCP and significant negotiation pleas from governors of states impacted by Florida's pill mills, the program was finally launched. Tennessee, which had a much smoother procurement of its own controlled substance monitoring database, awarded a contract in August to Optimum Technology, but has not yet set a date for the program's implementation.

Analyst's Take: As summer vacation draws to a close and people begin to refocus on work, there is likely to be an increase in the number of solicitations released this fall. This is particularly true for states whose fiscal year began on July 1. GovWin expects radio systems will be the focus of many smaller cities and counties over the next few months as they gear to meet the FCC's January 1, 2013 narrowbanding deadline. While many of the larger entities have already made the switch, smaller counties – particularly those experiencing funding difficulties – have yet to make a determination about which system to purchase or whether to release a solicitation for the project. It would behoove vendors to work with those counties still reviewing their system and implementation options, particularly given that the largest impediment to meeting the narrowbanding requirement is often the lack of funding. Vendors who are willing to work with these struggling localities could win big when they finally decide to go out to bid for the system. As covered in the state budget projections for justice, public safety and homeland security blog, radio communications is one area where both federal and state and local spending is expected to remain steady, if not increase in the next few years. Therefore, it is worth it for vendors to continue targeting these areas.

As far as PDMPs go, there are still more than 10 states that have not yet implemented a program. Given the pressure that the nation's drug czar and neighboring states put on Florida to enact a PDMP, it is likely that other states will face similar pressure to move forward with these types of programs. Vendors should therefore begin speaking with states that have not yet implemented the program, particularly those that have enacted legislation mandating it, but have not taken any further steps.

A do-over for LA-RICS?

As reported in this morning's Los Angeles Times, Los Angeles County announced its estimated $700 million Regional Interoperable Communications System (LA-RICS) project is in jeopardy. Patrick Mallon, the project's executive director, announced yesterday that, to comply with various California codes, the project should have been divided into three separate contracts: one for design and implementation of the system's technical components; one for the design of the signal towers and other structures; and one for the actual building of the towers and structures. As it stands now, the project was only procured for through one, all-encompassing solicitation meant to lead to a single contract.

The goal of the project, which has been in the works for three years, was to create a modern, integrated wireless voice and data communications system to support more than 34,000 first responders and mission-critical personnel within the Los Angeles region. The project was originally designed after September 11, 2001, when it became clear that interoperability among first responders was a vital, yet severely lacking component to emergency response. The county began planning the project to ensure the thousands of first responders and emergency workers could communicate in the event of a large-scale crisis. While the events of 9/11 precipitated dozens of hearings on the issue of interoperability, and hundreds of similar ventures across the county, the LA-RICS project is one of the largest and most well-known of its kind. The county received more than $250 million in federal funding to complete the project, which could be lost if the procurement process has to start over since the majority of funding streams have strict deadlines associated with them. Without federal funding, the entire project could be in jeopardy. Members of the project's oversight board are expected to travel to Washington, D.C. to request extensions of the various deadlines so the money can still be used.

Analyst's Take:

This contract has been marred with numerous problems, including delays and protests, since the early procurement stages. A solicitation released on April 5, 2010, was open until August 4, 2010, and required potential vendors to attend two mandatory conferences. The county began negotiating a contract with Raytheon just last month after resolving an initial protest from Motorola. Given the recent developments, it seems Motorola and other interested parties may still have a chance to secure involvement in at least a portion of the project. The field of participants is likely to open up now that the scope of work is smaller, and more specialized firms will now have a chance to get a piece of the pie.

Los Angeles County has shown its cards, and while the details of the new solicitations remain unknown, the specifications and requirements are likely to be largely the same. This will give vendors already familiar with the project a leg up as they begin to rework their responses. Interested vendors should begin to gear up again and start reviewing previously submitted proposals and pricing requirements. Vendors should also begin determining which solicitation they will respond to in case restrictions limit companies from responding to more than one. With so much up in the air, including whether the project will even survive if federal funding is lost, vendors are likely to have a significant amount of time to prepare their new responses; however, they should begin reaching out to project officials in the near future.

$345 million Maryland Public Safety Communications System protested again

The month of November has been one of the busiest months for the Maryland Board of Public Works and the Maryland Department of Information Technology. Earlier in the month, the Board was asked to approve a contract with Motorola for the Statewide Public Safety Wireless Communication System. Following the discussion, the Board moved to approve Motorola of the $345 million contract, which could be in place for 14 years if all options are pursued. Once approved, ARINC issued a formal protest of this contract. This was the second protest ARINC has issued for this contract.

ARINC's second protest revolved around the change in the Minority Business Enterprise (MBE) requirements that Motorola issued earlier this month when their MBE goal was deemed low for inclusion of African Americans. ARINC is claiming that this is a breach of state contracting law as it allows Motorola to provide a second best and final offer, when other contractors were not given this opportunity. ARINC's first protest in April stated that the state used criteria not outlined in the solicitation document to evaluate proposals. That protest was thrown out by the Board of Contract Appeals.

Discussion was held by the Board of Public Works regarding the protest and if it should be sent to the Board of Contracts Appeals. DOIT stated that this project has been too long in the making and needs to be approved as soon as possible to ensure that the state does not lose out on its FCC license for this project. Currently, the state has a 700 MHz license from the FCC for this project, which is set to expire January 2012. Regardless of the points made by both the Board and DOIT, the Board motioned to approve the contract with Motorola in order to ensure that the state complies with its FCC license. The Board of Contract Appeals will still hear the protest by ARINC, and if their findings differ, the contract will be reviewed.

Harris Corporation protests Radio Project in Nashville/Davidson County

Last month, the Metropolitan Government of Nashville and Davidson County issued an RFP for a new 800 MHz Trunked Simulcast Public Safety Radio System. After just three weeks of the RFP being on the street, Harris Corporation lodged a formal protest to the Metropolitan Government. Harris Corp. cited that while the RFP intends to solicit a system that is not proprietary or restricted to a single manufacturer, the terms of the RFP make it impossible for Harris Corp (or other manufacturers) to submit a bid for the public safety system. Harris requested a change in the RFP language or a cancelation of the solicitation.

The Metropolitan Government of Nashville and Davidson County acknowledged the protest and while they did review the complaint, there has not been any amendments issued to cite changed in the RFP document. What makes this situation interesting is the idea that there may be numerous RFPs issued across the country that are intended as to solicit vendor competition, while at the same time, requesting specifications that single out a particular vendor.

Each city, county and state has different regulations for their solicitation process, often allowing for a single sole sourced purchase, which may be in the best interest of that locality. In other cases however, localities may be benefited by reviewing bids from various vendors who may offer different products that could be a potential fit.

Most vendors would argue that fully open and competitive solicitations give them the best opportunity to showcase their products quality and cost effectiveness. However, I think that vendors would obviously rather see themselves picked as the sole source vendor. For purchasing offices, it is a difficult line to walk, in the interest of their locality, their citizens and the vendor community.

GAO Reports a Significant Increase in Bid Protests

In a recently published report, the GAO stated that there was a 20% increase in bid protests in FY 2009, as compared to FY 2008.

As protest regulations have evolved, the government has seen a steady increase in the number of protests since FY 2006, but this increase from 1,652 protests in FY 2008 to 1,989 protests in FY 2009 appears especially noteworthy. The GAO, however, stated that this increase was expected for three reasons. First, the option to protest task order opportunities was granted due to the growing use of contract vehicles such as EAGLE, NETCENTS, and SeaPort; second, federal employees were allowed to protest the decision to outsource requirements; and finally, the Transportation Security Administration (TSA) opportunities became susceptible to bid protests in FY 2009. Previously, TSA fell under the Federal Aviation Administration's (FAA) regulatory procedures. Below is a chart depicting the GAO Bid Protest statistics in recent years:

GAO Bid Protest statistics for FY 2005 through FY 2009

FY2009 FY2008 FY2007 FY2006 FY2005
Cases Filed 1,989 1,652 1,394 1,326 1,356
Cases Closed 1,920 1,582 1,411 1,275 1,341
Filed based on Merit (Sustain/Deny decisions) 315 291 335 251 306
Number of Sustains 57 60 91 72 71
Sustain Rate 18% 21% 27% 29% 23%

Source: GAO

Below is a list of current or recently determined opportunities that have been affected by the surge of bid protests. For TSA's Information Technology Infrastructure Program (ITIP) in particular, the awarded contractor has endured numerous work stoppages because of management authority disputes in protest handling between GAO and TSA. These delays can and have caused major funding issues in the form of bridge contracts and extensions until a final decision is made:

Title Agency Value ($K) Status
ITIP TSA/DHS $493,000 Protest
SBINet Program Integration and Management Support Services CBP/DHS $98,000 Protest
Field Office Support Services USCIS/DHS $120,175 Protest
Public Assistance and Technical Assistance Contracts (PA-TAC) FEMA/DHS $500,000 Protest
AFRICAP Program State $1,500,000 Protest
Material Management, Unit Readiness Mission & Distribution Management Center Army Sustainment Command $128,124 Protest
Goddard Unified Enterprise Services and Technology (GUEST) NASA $85,000 Protest

As bid protests on federal contract awards are likely to continue increasing, the need to shorten the process will also increase. Bid protests can extend the timeframe for award up to 6 months with the net results being delays in program schedule, fiscal complications, and general strain among government and private personnel. If protests are to be minimized, contracting personnel will likely have to take extra steps when sole-sourcing and/or assigning the competition type. They will also undoubtedly be stricter when evaluating proposals resulting in vendors having to be as clear, concise and accurate as possible during the bid and proposal process.

Andrew Endicott also contributed to this report.

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