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OMB Guidance Flip-Flops on CIO's Role

Adhering to custom, there is a lot of momentum around 11th hour legislation and rulemaking as the Bush administration comes to an end. An example of this is the memo released by OMB last week that was intended to clarify the role of agency CIOs.

NextGov obtained a draft version of the memo, which seemed to carve out a bigger role for the CIO by requiring that he or she report directly to the agency head. This was good news among the federal CIO community, members of which have voiced concerns about the lack of authority they have in guiding the IT investment decisions within their agencies. In an ITAA CIO survey released earlier this year, there was an 8% drop in the number of CIOs reporting to agency heads from 2006 and a nearly 20% increase in CIOs that report to agency CFOs. OMB's memo seemed to set the stage for addressing the potential problems seen by many CIOs who haven't had a place at the strategy table. However, the final version took much of the bite out of the memo by removing the language about reporting directly to the agency head and positioning the CIO as an advisor or counselor. The responsibility for guiding agencies' IT portfolios is in the hands of the agency head (NextGov provides a nice feature for comparing the draft and final memos here).

With all the talk from the Obama campaign about creating a national CTO, I wonder if his administration would also work to clarify and strengthen the role of the CIO. With the role technology will play in helping a McCain or Obama administration implement even a fraction of their priorities (as well as the spotlight they plan to shine on spending), my guess would be that CIOs will get some attention. Possibly more critical attention than they'd like, but couldn't they make the case that their lack of authority and inclusion is to blame for questionable or ineffective IT investments?

OMB's last minute rulemaking could all be for naught, since we are headed into a new administration. But perhaps the original intent was simply to call attention to the need for a change, leaving the real work for making it happen to someone else.

Updated PART Information ProvidesGovWin Members a look into Agency Program Performance

For its members, GovWin has released updated Program Assessment Rating Tool (PART) information that can be accessed through GovWin's Federal Agency Profiles. PART information is available for 49 civilian departments and agencies that GovWin tracks in its Profiles product and that submit IT budget requests to the Office of Management and Budget (OMB). The information on the Agency Profiles site is updated bi-annually to match the update schedule of OMB's PART assessments.

OMB created PART to provide both the public and Congress assessments of government spending based on how efficient programs are in meeting their expected performance measures. In an ongoing effort OMB, and the agencies, collectively select and asses programs to measure against the PART criteria.

PART is composed of 25 questions focusing on the overall performance and management of each selected program. The questions are divided into the following four categories:

  • Program purpose;
  • Strategic Planning;
  • Management; and
  • Reporting of Results

The answers to the questions in each of the four categories receives numerical scores ranging from 0 to 100, which results in a rating scale of effective to ineffective. The scale is as follows:

  • Effective = Scores 85 – 100
  • Moderately Effective = Scores 70 – 84
  • Adequate = Scores 50 – 69
  • Ineffective = Scores 0 – 49

PART is intended to be a collaborative effort between the OMB and agencies, so much so that if performance measures cannot be agreed upon the program will be given a rating of Results Not Demonstrated.

NY Department of Health Releases the MMIS RFI and the Enrollment Broker RFP

Despite financial conditions some states are still looking for contractors to support major information technology (IT) investments. The release of two major procurements from the NY Department of Health is a prime example of big opportunities.

The New York State legislature FY 2009 approved budget allocated $95 million for the Department of Health for services and expenses related to the operation of the Medicaid Eligibility Verification System, operation of the Medicaid override application system and the development and operation of the replacement Medicaid Management Information System (MMIS). The MMIS Request for Information (RFI) was released September 22, 2008 and the Enrollment Broker Request for Proposals (RFP) was released October 14, 2008.

MMIS Project Details (GovWin Opportunity # 15264):

  • Purpose- The Department has a requirement for a replacement MMIS to support the New York Medicaid program. The Department administers Medicaid in conjunction with fifty-eight local social services districts and other state agencies.
  • Scope of Work- The design, development and implementation (DDI) and operation of a replacement MMIS.
  • Timeline- Responses to the RFI were due by October 15, 2008 and are now under evaluation. Meetings will take place in October and November. No formal date is available at this time for the release of the RFP.
  • Estimated Value- The potential value of this opportunity is $351 million based on the current contract with CSC.

Enrollment Broker Project Details (GovWin Opportunity # 42007):

  • Purpose- The Department has a requirement for a centralized statewide Enrollment Center to process applications and renewals for those eligible for several of the state's public health insurance programs.
  • Scope of Work- Requirements in the RFP include operating the statewide toll-free call center for Medicaid, Family Health Plus and Child Health Plus; developing and operating a statewide telephone and mail-in renewal system; administering the Premium Assistance Program; administering the Family Health Plus employer buy-in program; managing web-based renewal; marketing and outreach materials; and processing new applications and other renewals. Please see the RFP document for further details.
  • Timeline- A letter of intent and questions are due by November 17, 2008. A bidder's conference will be held on December 8, 2008. Proposals are due by February 17, 2008.
  • Estimated Value- The Department estimates the value of this project to be approximately $34 million, subject to the availability of funds.

Task Order Protests Set to Drive Significant Change in IDIQ Contracting

The drive towards transparency and small business contracting reform is heating up. This year has introduced two major initiatives that will be significant game-changers for contractors on multiple award contracts. Considering the increase in the use of these types of contracts, new task order rules impact nearly everyone.

There have been 2 major rulings that will change the landscape of task order contracting:

Task Order Protests. The FY2008 Defense Authorization Act cleared the way for protests on task order contracts over $10 million. It went into affect in May of this year under the authority of GAO, and many contractors have already tested the waters. According to GAO's Assistant General Counsel Ralph White, his office has received about 70 task order protests since the rule went into effect. At a recent event, government speakers expressed their increasing concern about protests as a business strategy for either getting another chance to win or extending current work until the protest is resolved. In general, protests have gone from 1411 in FY2007 to an estimated 1700 in FY2008.

Rule of Two. The FAR's "Rule of Two," which requires agencies to provide setaside opportunities for small businesses for acquisitions over $100,000 if there is a "reasonable" expectation that the agency would receive offers from at least two small businesses. GAO recently sustained a protest against the Navy initiated by Delex Systems, a small business providing technical training services, regarding a $75 million task order initially released as a small business setaside. To make a long but interesting story short, Delex was one of 4 small businesses on the NAVAIR TSC IDIQ contract. Following the recertification requirement by the Small Business Administration, only 2 small businesses were eligible as "small business concerns" (including Delex). The Navy decided to open the task order up to all contract holders, large and small, using a number of factors as the basis:

  • Because the field of small business offerors was limited, there was "no guarantee that proposals will be received from more than one small business concern."
  • They'd only received two proposals from small businesses on a past solicitation for similar work (back when there were 4 small business participants)
  • The scope and complexity was estimated at $75 million (GAO read this as Navy's assumption that a small business couldn't handle the work)

    The Navy's defense: the Rule of Two does not apply to task orders. GAO's response: Oh, yes it does.

    This has likely opened up a can of worms that could change task order contracting in the near future in several ways:

  • Although government sees the value in protests in helping increase transparency and improve requirements development, it slows the procurement process and generally makes contracting officers fearful of making mistakes. Acquisition managers are starting to review all of their IDIQs for issues and contracting officers are adding more review time to the process for "protest-proofing." As a result, some mission critical programs are being delayed - either because of closer review on the back end or protests on the front end.
  • GAO's decision regarding the Rule of Two could lead to revisions of the FAR to include it as a permanent rule. This could open up more opportunity to small businesses.
  • On the flip side, the Rule of Two provision could force large businesses to have to rethink their pricing strategies on task order vehicles. Because pricing is often based on the ability to compete for all task orders, this rule could force them to develop new pricing strategies in anticipation of being locked out of some task order competitions.

    Visibility into the task order environment has been a major concern for lawmakers. With the tough language about transparency and procurement reform coming from both Presidential candidates, I am expecting to see building momentum in this area as the veil is pulled back and both government and industry become more aware of the problems and limitations.

  • FCC Next Generation 9-1-1 Event Highlights DOT Involvement

    On October 22nd, the Federal Communications Commission (FCC) and the Public Safety and Homeland Security Bureau (PSHSB) hosted Laurie Flaherty for a discussion on the role of US DOT in Next Generation 9-1-1. Flaherty, a program analyst in the Office of Emergency Medical Services at the National Highway Safety Transportation Administration, discussed issues pertaining to the future role of the Department of Transportation in NG911 and the National 911 Office efforts. The DOT has a unique understanding of emergency communication and the types of technology neccessary for an interconnected and interoperable network of emergency support services.

    As described in a previous GovWin blog, the NG911 pilot project implementation began back on June 16th, and according to Flaherty, the evaluation of its performance has led to encouraging suggestions for the future of emergency communications. Five PSAPs were chosen, from across the country, to represent test facilities that could assess the new initiatives that would hopefully bring 911 services into the 21st Century. The most important requirements for the new system were outlined as follows:

    • Ability to receive voice, text, video, and data (both IM and SMS)
    • Sufficient support for the hearing impaired
    • Location
    • Telematics
    • Call routing
    • IP networking/security

    The Proof of Concept that was recently completed and has yet to be released to the public, yielded a "lessons learned" section according to Flaherty. The success of the tests were scored as pass/fail and although no real 911 calls were fielded by these test sites, the experience will be beneficial in addressing issues, such as bandwith, before actual implementation begins. As judged by standards established with the help of teams from Booz Allen Hamilton, Texas A&M, and Columbia University, the tests were evaluated at an 87% passing score. While a passing score does guarantee that the project will be moving forward, its positive nature is slightly marred by the questions that still plague its future. GovWin is tracking many NG 911 projects including those in Michigan, Texas, and Vermont and are prepared to see more projects arise with this new federal push.

    Laurie Flaherty emphasized the "evolutionary process" that lies ahead. She pointed out that this project will not include "forklift deployment" and in testing the new systems, the focus was on "open standards technology that everyone can get their hands on." A grant program has been established for PSAPs and the $43.5M that was appropriated will help align 9-1-1 offices across the country. GovWin believes the opportunities will arise as this Next Generation 9-1-1 initiative program becomes the catalyst for change throughout the emergency communications world. For more information relating to these projects, please visit the DOT NG911 or National Highway Traffic Safety Administration websites or the GovWin Agency Profile for DOT (Login Required).

    New Policy and Technology Trends Face State Governments in 2009

    Clearly, the three biggest technology trends that federal, state and local governments have been cooking for the past year have made the top 10 IT priorities State CIOs will continue to focus on as these issues are expected to gain more traction in 2009.

    NASCIO recently released results to their latest survey of State CIOs asking to identify Top 10 IT priorities for 2009. For the past 4 years Consolidation, Shared Services, Information Security, Health IT and IT Governance have consistently made the top 10 list as strategic priorities of State CIOs. In 2008, almost half of all 10 IT priorities were new to State CIOs including Electronic Records/ e-Discovery, Connectivity, IT Governance, Interoperability and Human Capital/IT Work Force. This year, it is no surprise that Budget and Cost Control, Green IT and Transparency trends have made the list.

    State CIO Priorities NASCIO
    -- Not ranked as top 10 IT priority
    * New IT priority
    Source: GovWin and NASCIO

    Furthermore, NASCIO provides a list of top 10 priority technologies outlining to what extent each of these technologies, applications and tools are expected to be the next big trend.

    Priority Technologies NASCIO
    -- Not ranked as top 10 IT technology
    * New IT technology
    Source: GovWin and NASCIO

    The NASCIO chart (above) in comparison to strategic technologies identified by IT research firm, Gartner (below), shows that storage, computing, data center and server Virtualization continues to rank #1 among technology solutions. In addition, both NASCIO and Gartner agree that technology solutions such as Virtualization, Green IT, Business Intelligence (BI) applications and social networking are pivotal to the advancement of Transparency and Green IT and essential in controlling budgets and state costs.

    In 2008 there was a conflicting analysis over the ranking of Green IT, Gartner ranked it as the #1 technology solution while NASCIO did not see it gain traction at all. However, NASCIO now indicates that Green IT will absolutely be under the radar for state CIOs in 2009.

    Strategic Priorities Gartner
    -- Not ranked as top 10 IT technology
    * New IT technology
    Source: GovWin and Gartner

    The IT strategies, management processes and solutions identified by both NASCIO and Gartner are certainly shared by most states as are continuing IT challenges and IT drivers. The current economic downturn continues to be a major concern to state CIOs. For the next fiscal year, State CIOs will look for creative options to "do more with less". They will defend their IT budgets and will squeeze the most out of them. As vendors align their IT solutions with government priorities, it is important to note the number of opportunities available to vendors by being creative and offering expertise. Therefore, teaming with businesses that already have strong relationships with states is highly recommended to better identify state's IT needs but to also optimize from brand recognition.

    Small Business Impact on Goaling, Contract Value and Opportunities

    Recently, GovExec reported the new Small Business Administration (SBA) numbers which set a record for small business prime dollars. Small firms won $83.2 billion in federal prime contracts in fiscal 2007, according to the annual score card released on Wednesday by SBA. As Congress and SBA continue to pressure federal agencies to meet the small business contracting goals, one of the ways to do that is set-aside contract vehicles.

    GovWin has mentioned and analyzed the multiple award contract (MAC) mentality which is impacting DoD and Civilian alike. DHS has set-up contracts like EAGLE, FirstSource and PACTS; DoD has begun to consider more flexibility and small business options as well. Air Force is considering a large portion of NETCENTS II to be set-aside for small businesses, and MDA's MiDAESS contract will also support small businesses. In this way, agencies are able to award contract vehicles like MACs or as some have recently branded them AWACs – Agency-Wide Acquisition Contracts -- and still maintain aggressive small business goals. For example, DHS EAGLE set-aside a portion of the prime contracts, specifically awarding 28 small business prime contracts. In addition, GSA has established GWACs for disadvantaged business such as: HubZone and STARs. On the other hand, small businesses not included in a vehicle's prime contract can often be added to prime contract holders teams' throughout the life of the contract (i.e. EAGLE).

    More to the point, the value of small business prime contracts has increased but the percentage of prime contracts has decreased. Meaning, small business are getting more money through few prime contracts; these contract vehicles only account for a small business award but could mean millions of dollars. Small companies won almost $6 billion more in prime contracts in FY2007 than in FY2006, SBA reported. Federal agencies, however, fell short of the 23% government-wide goal and awarded only 22% of prime contracts to small business which is down from 22.8% in FY06.

    Therefore, small businesses development efforts can focus on priming contracts in the set-aside contract vehicles and/or teaming with existing primes to strengthen a task order competition. As budgets tighten in FY09, a diverse approach will strengthen small businesses' chances for success. Often times, as with EAGLE, prime contract holders are able to arrange different teams to differentiate proposals within task order competition.

    GWAC/MAC trending has also impacted mergers and acquisitions (M&A) activity. As small businesses win positions on the set-aside portions of GWACs and MACs they become targets for large businesses that were not selected for the large business portion of the same vehicle. Anecdotally, when the Defense Information Systems Agency (DISA) made the decision to recompete the ENCORE contract vehicle instead of the I-ASSURE contract vehicle firms previously positioned for I-ASSURE II were forced to scramble to be included on the ENCORE II vehicle either through speedy proposals, teaming or M&A.

    GovWin is currently tracking several of these set-aside contract vehicles:

    For more information, please see the GovWin's Report: Top 10 Federal Small Business Technology Opportunities in FY2009.

    Vermont Looking to Say "Hello" to New Technology Jobs

    On October 21st, Vermont (member login required) Governor Jim Douglas announced a new plan to create jobs in the information technology industry and software development market. The Governor laid out his plan at a press conference at the Champlain Mill in Winooski, VT. The plan is made up of programs and incentives that will be used to accelerate job growth in the high tech industry.

    According to the Governor, "These incentives will help establish the Champlain Mill – and Vermont – as a center for software development." Governor Douglas went on to say "The combination of Winooski's downtown re-development, Champlain College's students, and the college's commitment to this industry will create a critical mass for firms that will create good jobs and power our economy into the future."

    Also happening at the time of the press conference was Champlain College's unveiling of their new Emergent Media Center at the Champlain Mill, which has been cleaned up and remodeled to house software development firms currently being scouted to set up shop in Vermont.

    Some key proposals announced by the Governor include:

    • A grant of $150,000 to the Vermont Center for Emerging Technologies to be used to make three very low interest loans to help young software designers from the state's colleges and universities start a business
    • A $47,500 grant to the Vermont Software Developers Alliance to help it continue its mission as a trade association promoting the industry in Vermont
    • A plan to enhance state's cash incentive program, the Vermont Employment Growth Incentive or so-called VEGI program, to provide a higher level of benefit to eligible companies creating jobs in software industry
    • A plan to establish a Research and Development tax credit in Vermont
    • Directing the Vermont Department of Labor under the Next Generation initiative to give internship applications from software and related technology firms priority in their upcoming rounds of funding

    While the value of the grants may not seem incredibly significant to the average Joe (or "Joe the Plummer", if you will), the fact that Vermont is spending money on the IT sector is promising, as many states are experiencing budget constraints.

    Douglas closed the press conference by saying ""Our vision of a software development cluster, anchored in partnership with Champlain College and their Emergent Media Center, includes a community of students and professionals, living, learning, and working together in this revitalized neighborhood. Through innovative, pro-growth partnerships such as this, Vermont's economy will be strengthened through the creation of many more good-paying jobs."

    New Purchasing Requirement for the State of Washington

    On October 21, 2008, the State of Washington announced a new purchasing requirement for all formal procurements that require advertising. Effective November 1, 2008, state agencies will be required, under State rules, to advertise bids on the Washington Electronic Business Solution (WEBS) site. By restricting advertisements to the WEBS site, state servants, vendors and citizens will have a central location to find solicitations from Washington state agencies.

    The new requirement adopted by Washington Departments of General Administration, Printing and the Information Services Board is a portion of a larger initiative to streamline the State's purchasing practices. Thousands of bid and proposal opportunities for goods and services occur every year in the State and despite efforts otherwise, the purchasing process is still decentralized. In order to centralize bid and proposal advertisements, agencies will post all solicitations to the Washington Electronic Business Solution site. WEBS is a free online system that allows vendors to receive automatic email notification of opportunities in Washington. It also allows government buyers to post contracting opportunities. Several steps were taken to ensure a smooth transition to using the Washington Electronic Business Solution site making it easier for agencies to post solicitations to the website. Not only are government agencies being directed to the WEBS site, but vendors are also being directed to the site.

    By consolidating to a single statewide portal, the State hopes to build efficiencies, but vendors should anticipate an increase in competition. Effective November 1, 2008, vendors will have equal access to all bids and proposals issued by state agencies which will cause an increase in competition.

    GovWin members are encouraged to continue to monitor pre-solicitation and forecast pre-solicitations in order to maintain an advantage over the new competitors that will rise as a result of this requirement.

    What State and Local Governments Buy -- September Round-up

    GovWin monitors several thousand government procurement sites responsible for advertising solicitations from over 100,000 government agencies. We've analyzed all the acquisition documents released during the month of September to determine what government buys and which governments are buying.

    Architecture, engineering and construction acquisitions have surpassed professional services since the last round-up in July. The two categories consistently describe 40% of state and local acquisitions, with IT and telecommunications hanging steady around 10% of acquisitions. To clarify, the professional services classification includes administrative, logistics, engineering and scientific support; financial management services; management consulting; program and/or project management; quality assurance, testing, independent verification and validation services; education and training; and facilities services, such as janitorial.

    Within the IT and telecommunications classification, subcategories ranked as follows: Services 43%, Computer Equipment 26%, Communications Equipment 16% and Software 14% of the total. GovWin expects the IT services category to build on its lead within IT and telecommunications, in addition to building on the 4.5% of overall acquisitions.

    Solicitations by Offering

    The split of acquisitions between government types is unchanged in the past months with state agencies carrying out 32.5% of advertised acquisitions and cities close behind at 28.3%.

    September Solicitations by Government Type

    The northeast had a 4-6% more purchasing activity than each of the other geographic regions. WIthin this analysis, the northeast includes the states of Connecticut, Delaware, Maine, Maryland, Massachussetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.

    September Solicitations by Region

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