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Seeking Medicaid Health IT Vendors in Mississippi

Mississippi serves as another example of a state Medicaid agency leading health IT activity; similar to the case studies discussed in the GovWin's recent State Webinar: Medicaid- Leading the Health IT Transformation.

The Division of Medicaid, (DOM) released a Request for Proposals (RFP) for Consulting Services for a Medicaid Electronic Health Records System (MEHRS) and E-Prescribing System on August 29, 2008. Proposals are due by September 19, 2008. Project Details:

Purpose- The Division of Medicaid is seeking a vendor to provide consulting services to assist with the development of a RFP and Advanced Planning Document (APD) for an e-health records and e-Prescribing solution.

Scope of Work- The contractor will perform research to ensure that the DOM is acquiring a system that will align with industry standards and meet federal and state mandates. The contractor will work to define the requirements of the system and specify that information in the RFP. Other tasks include conducting a cost benefit analysis and a risk assessment.

Timeline- The Consulting RFP is projected to last for 30 days.

Estimated Value- GovWin estimates the value of this opportunity to be approximately $200,000 to $500,000 based on similar contracts. GovWin will continue to try to better understand the Division's estimated budget.

Please see GovWin Opportunity # 50095 for additional information regarding the Consulting RFP. For more information on the MEHRS and E-Prescribing System project RFP please see GovWin Opportunity # 50097.

SEAPORT-E Enhances the Competition for Recompetes

To date GovWin's Federal Task Order database provides information on 1,203 task orders awarded under the SEAPORT-E program vehicle for a combined total of over $16.2 billion. Of those task orders, 452 are follow-on task orders for a combined total of $7.5 billion.

The following list represents the top 10 follow-on task orders from the SEAPORT-E program arranged by value that may present a possible recompete effort. This list includes task orders awarded from follow-on competitions between May 19, 2004 and May 16, 2008.

Atlantic Ranges Engineering and Technical Support ServicesTO# N0017804D4030-M801

Special Missions Engineering and LogisticsTO# N0017804D4119-FC20

Aegis BMD Systems Engineering and Program Management SupportTO# N0017804D4012-EH02

PEO LMW Program Office SupportTO# N0017804D4026-EHO1

CSCS/ATRC Surface Combat Systems Training SupportTO# N0017804D4079-10

Aegis Test & Evaluation SupportTO# N0017804D4091-14

AE, ISE, and AITTO# N0017804D4027-EHP2

IWS 5 ILS Install SupportTO# N0017804D4079-EH02

Aegis Weapon System Computer Program Products in Support of NSWCCD in the LSEA RoleTO# N0017804D4030-6

Technical, Engineering and Management Support Services for the Naval Explosive Ordnance Disposal Technology Division (NAVEODTECHDI)TO# N0017804D4143-FG01

Vendors grab their pad and pen for IL Secretary of State’s Real ID RFP

With all of the hype of Real ID and the 8 million stories surrounding it, Illinois moves forward with Secretary of State, Jesse White's plans to implement Real ID. I hope that state officials don't leave their wallets in Springfield as this statewide endeavor will cost over $100 million.

Today, the Illinois Secretary of State's office released a Request for Propsoal for their Real ID program. The solicitation asks for a vendor to design and develop a solution for the state that meets the requirements of Real ID. This project began in 2006 when the state released a Request for Information on technologies associated with Real ID.

The vendor is required to design an application that includes the following electronic interfaces:

  • SOS host environment
  • Driver's license application system
  • Central issuance system
  • SOS Facial Recognition System
  • SOS Document Management System
  • Federal and State verification systems including the national verification hub
  • Other Federal and State systems as needed.

This project has been estimated to cost over $100 million as the state plans on having a variety of issuing offices set up around the state, each with the ability to issue Real ID's. The state will need to find a way to pay for this as the state cut out $22 million in funding for this project last year at this time. A pre-proposal conference will be held on September 18, 2008, with proposals due October 1, 2008.

Keystone state to decide on $12.8 billion outsourcing; More to come?

As you might recall, Pennsylvania is already moving forward with converting portions of I-80 into a toll road as part of a 50-year $116 billion lease. Next month, the state legislature will vote on leasing the famed Pennsylvania Turnpike tollroad for $12.8 billion. Government IT vendors should keep two things in mind regarding toll roads and outsourcing.

  1. If you are interested in participating in the tolling infrastructure, you will need to make deals with the interests that are bidding on the roadways. They will be picking their own IT infrastructure providers, not the states.
  2. While most of the money raised from toll roads is dedicated to rehabilitating the nation's transportation infrastructure--no state investment has been more drastically shortchanged over the last 30 years or so--these funds will take the pressure off of cuts in other business areas that consume IT and it will allow future revenue increases to go to things other than transportation infrastructure. But, don't expect a lottery-type boost where tolling money allows legislatures to move significant transportation funds into other areas.

Also, as I've said here before, I'm torn as to how widely these sorts of tolling arrangments will spread. And, while I think that most of my previous assertions still hold, I am coming around to the idea that we could see significant portions of the nations long-haul North-South/East-West Interstate corridors converted into toll roads--especially along the East and West coasts. Taxpayers in the nation's interior still don't feel the pinch of traffic the way folks do between Atlanta and Boston. However, the toll-regulated I-80 corridor between Philadephia and Chicago could be replicated along other routes that carry significant interstate commercial traffic. As Pennsylvania has shown us, it's fairly easy to set up the tolling so that locals can avoid it and you snare fares only from those who don't vote in your state.

GAO Questions Accuracy of OMB's High Risk List

Many government observers are talking about how much of the President's Management Agenda (PMA) will continue into the next administration. OMB is using the limited time it has before the next administration to position the PMA in hopes that the next administration will continue in the same direction.

As part of the focus on performance, OMB's High Risk List tracks IT projects that are deemed high risk either because of cost, government-wide impact, or complexity. OMB's third quarter list showed a drop in number (from 489 to 472), but a GAO report recently criticized OMB for misrepresenting progress. OMB reports thatt only 87 out of 472 IT projects on the list have significant budget or scheduling overruns. But GAO's report reveals the fact that agencies have been adjusting their cost and schedule baselines. In fact, the report states that 48% of the federal government's major IT projects have been rebaselined for reasons such as changes in project goals and funding. Of those, 51% were rebaselined twice, and roughly 11% were rebaselined at least 4 times. Senator Tom Carper (D-DE) makes a good point - everyone can stay on time and on budget if you keep changing the baseline.

Senator Carper (D-DE), along with Senator Joe Lieberman (I-CT), and Senator Susan Collins (R-ME), have sponsored legislation requiring more agency reporting to OMB and Congress about cost, schedule, and performance issues. Carper wants a list of all projects that are experiencing shortfalls, but OMB IT Adminstrator Karen Evans is hesitant to provide the list because she doesn't want to "embarass agencies" into focusing more on compliance than results. The standard response to that perspective has been clear: if public scrutiny is not an option, then perhaps withheld funding should be.

If this legislation flies, agencies will be forced to put more focus on requirements identification, program management, and contractor performance. However, many would agree that this needs to happen anyway.

The bottom line is that the effectiveness and accuracy of the High Risk List has been called into question again, which doesn't exactly highlight the positive intent of the effort for the next administration.

MD FY2010 IT Master Plan gives the shaft to a variety of qualifying IT projects

It is clear that this Master Plan was anything but a "Master" of plans, as the state walks on by a variety of notable projects. Many of these unnamed projects should be discussed and implemented in upcoming years if the state wants to breakthrough and emerge as a leader in IT acquisition.

The State of Maryland has released its fiscal year 2010 Information Technology Master Plan, which includes a variety of IT initiatives to be discussed in the coming year. The majority of these projects include the acquisition of new or updated technology systems, but also include business process analysis/re-organization plans. This plan comes at the helm of the Governor's FY2010 information technology objectives. It is very interesting to see the different projects that are included in this IT plan, as there are a variety of large-scale projects that are not included, which have plans of being implemented during this timeframe.

A few of the projects listed include: development of the Statewide Public Safety Communications System, implementation of a Statewide Computer Aided Dispatch/Records Management/ Automated Field Reporting systems, Personnel System Replacement, and an Outdoor Licensing & Registration System.

It is noteable that this plan did not include any of the activities taking place within the Department of Transportation, specifically the Motor Vehicle Administration's plans to replace their Titling and Registration Information System (TARIS) and implement measures to comply with Real ID legislation. One would expect these projects to be included in the master plan as the plan's "Perpetual Objectives" include complying with standards. Apparently there must have been a page limit to this plan, because there are a variety of projects that would be essential to this "Master" of plans.

A Growing Debate: Government’s Role in Public Infrastructure

In a recent New York Times article, the author highlighted an on-going debate regarding the ownership and maintenance of public infrastructure – roads, bridges, tunnels and even airports. Privatizing these key elements doesn't seem to change the profitability of these projects, but it is affecting the players involved. For example, the big names in the most popular bids – Chicago's Midway Airport and Florida's highway known as "Alligator Alley" – are banks, investment firms, and venture capital groups. Instead of federal and state and local governments spending large amounts of money in the midst of mounting deficits, they can privatize the entire process maintaining only oversight capability.

In keeping with this idea, Governors Rendell (PA), Schwartzeneggar (CA) and Mayor Bloomberg (New York City) began Building America's Future, a coalition which promotes awareness of the funding and support of public infrastructure projects. A proposed example from our own DC metro area is the high-occupancy vehicle (HOV) toll lanes which could be funded through a public-private partnership to the tune of $1.9 billion.

Close to Home: Another Example

Let's look at the Dulles Greenway as the most popular example of something like this already in place. Toll Road Investors Partnership II, L.P. (TRIP II) owns the toll road and clears all changes with the State Corporation Commission (SCC). As a sidenote, rate hikes are well on their way to being approved and will increase consistently over the next 3-4 years until the base toll is $4.00 for non-peak travel and $4.80 for rush hour. Because of TRIP II's ownership, related projects for consulting, construction, and improvements are commercial projects rather than public contracts.

Privatizing public infrastructure creates a business opportunity for investors and increasing commercial business for construction/maintenance firms, while limiting the Government's expenses. However even with oversight capability, it becomes harder for the Government to monitor and direct the future of key infrastructure.

Closer Look: Business Opportunities

GovWin is currently tracking public infrastructure protection and consulting projects which materialize throughout Department of Homeland Security (DHS), Army Corps of Engineers (USACE), and others. For instance:

DHS' Office of Infrastructure Protection (IP) recently worked a contract through GSA's MOBIS vehicle for Protective Measures Support Services for professional and technical services including the public infrastructure support activities such as: site visit teams, site and safety assessments, inspections, vulnerability testing and reporting.

DHS has taken the lead on critical infrastructure protection including both the professional assistance and security of these key locations:

One of the top opportunities within FEMA is the Public Assistance and Technical Assistance Contracts (PA TAC). PA TAC will provide consulting support services and assistance for preparing and operating disaster assistance operations specifically focusing on public infrastructure. This $725 million project is anticipated to award multiple contracts in FY09.

DHS IP is also preparing a multiple award contract for the watch desk and monitoring of critical infrastructure. Office of Infrastructure Protection Watch Desk and Operations Support Services contract will provide the planning, analysis, monitoring and surge support for field operations protecting America's key public infrastructure and installations. This $95 million contract is currently in development phases and procurement activity is anticipated in the near future.

The last example of potential work related to the planning, analysis and protection of public infrastructure will be recompeted through the Army Corps of Engineers in 2011:

Consultant Services for A-76 Competition Support provides the USACE consulting services when evaluating and deciding A-76 projects. This $6 million contract expires in 2011 and was previously set-aside for Service-Disabled Veteran-Owned vendors.

Closing Thoughts:

What's interesting about the increasing privatization of public infrastructure is the potential impact it could have on contracting around these projects. With the Government's role becoming more oversight than operational, more consulting and evaluation contracts can be expected. However, it remains to be seen how tightening budgets and efficient toll roads will counter the biggest complaint (which I've yet to mention).

And that is – do Americans really want key public infrastructure sold off to private equity groups and companies who sometimes include foreign investors? Either way, the debate has begun.

Governor Approves $451 Million to Modernize Critical IT Systems

Massachusetts leads the way in setting aside funding for technology investments through the recent passage of its IT Bond Bill. This investment promises to provide a well-functioning and responsive government funding notable new and ongoing mission critical projects.

One of the most pressing challenges facing Massachusetts has been funding constraints for much needed IT modernization projects. Last year, over $700 million worth of IT projects were proposed, however, due to the lack of a structured funding program there wasn't nearly enough money to successfully move forward with all of these. In efforts to address these challenges, Governor Patrick drafted and recently signed legislation establishing the Massachusetts IT Bond Bill.

The bond bill allocates $451 million to modernize several new and ongoing mission critical systems. Among the number of new mission critical projects to be funded by the bill, projects potentially resulting in contracting opportunities include:

• Department of Revenue – MassTax2 (GovWin Opportunity # 47378)

• Registry of Motor Vehicles – Automated License and Registration System (ALARS) (GovWin Opportunity # 17215, 17216, 17221)

• Build and equip a second data center in Springfield - $78 million.

The bill further requires the procurement of services and equipment to comply with procurement policies that ensure an open and fair competitive procurement process. Furthermore, in efforts to improve management of thes projects, state agencies seeking funding through the bond bill must submit documentation to the Information Technology Division. Documentation deliverables include project management plans, methodology, technology designs and specifications, accounting of amounts expended or to be expended, assessment of whether the project is within budget and other document deliverables. The information technology division will approve funding or continue funding of requested projects upon submission and approval of these documents.

Purchase of EDS Makes Hewlett-Packard the Newest Systems Integration Giant in Navy and DoD

Manufacturing giant Hewlett-Packard (HP) announced yesterday that it has closed its $13.9 billion purchase of Electronic Data Systems (EDS). With the purchase of EDS, HP immediately became one of the largest IT service providers at the Department of the Navy. Over the last decade, thanks largely to the Navy-Marine Corps Intranet (NMCI) contract it won in 2000, EDS had become the highest earning systems integrator at Navy, totaling $1.758 billion in obligations in FY 2007 alone. As of late, EDS also appeared to have turned a significant corner in the NMCI project, achieving an 84% satisfaction rating among surveyed Navy personnel. The recent success of NMCI, after years of struggling to get the system up and operating, has likely positioned EDS (now HP) in the forefront of integrators planning to compete for the Next Generation Enterprise Network (NGEN) contract later this year.

Although the acquisition of EDS gives Hewlett-Packard a significantly larger presence at the Navy, HP also benefits from EDS' established business elsewhere at the DoD. This includes the Defense Finance and Accounting Service (DFAS), where EDS is a leading IT contractor with $47.8 million in reported obligations at the end of FY 2007. Similarly, HP vaults into the top-tier of IT contractors at the Office of the Secretary of Defense (OSD). FY 2007 spending at OSD obligated to HP contracts topped off at an estimated $57.1 million, while spending obligated to contracts held by EDS in the same year totaled approximately $114.8 million. This growth effectively represents a tripling of HP's contracting business at OSD. Hewlett-Packard will also double its contracting business at the Defense Information Systems Agency (DISA) ($41.6 million obligated in FY 2007), as spending obligated to EDS contracts at DISA totaled $56.8 million in FY 2007.

For example, EDS did predominately more business with Navy in FY2007 than any other Federal Agency:

EDS Business

The wisdom of buying EDS extends beyond individual contracts into the realm of Multiple Agency Contracts and the other large ID/IQ contract vehicles that the Defense community is so fond of using. Via its EDS buy, HP now holds Navy SeaPort-e and DISA ENCORE II contracts. HP did not have these contracts previously so it can now compete for task order contracts competed through those vehicles. To date, the Navy has competed more than $3.6 billion in contracts through SeaPort-e. If historical spending data is any indication, the flood of contracts awarded via SeaPort-e promises to increase, as spending jumped $778 million between FY 2006 and FY 2007. DISA appears to be moving in the same direction. After funneling nearly $2.1 billion in requirements through the first incarnation of ENCORE, recent statements by DISA officials indicate that an even larger number of requirements will be competed through ENCORE II.

Having the ability to compete for contracts and winning them are of course separate things. Later this year, the competition for NGEN will be the first big test for the newly expanded HP. This said, with its purchase of EDS, Hewlett-Packard clearly intends to be a leading provider of IT solutions for the Navy and Defense community and a contracting force to contend with in the coming years.

Serco buys SI International for $423 million

Serco announced today it will buy SI international for $423 million.

Acquisition trends: British buyers (QinetiQ, BAE Systems, Serco) continue their buying spree. Mid-sized contractors continue to disappear.

Valuation: Relative to other acquisitions in the government contractor market, Serco appears to be getting a deal (or conversely SI earning a low valuation) paying less than 1x revenue. SI has revenue of $555 million in the last 12 months as of June 2008. SI shareholders are not getting a bad deal, with Serco paying a 40% premium on the August 26th closing price.

SI's cancelled acquisition: SI dropped its acquisition of Arrowpoint in late July. At the time, no reason was given. The announcement today is a good candidate.

British buying spree:

Buyer: Seller: Consideration: Announced:
BAE Systems PLC Mevatec $82 million March 2003
BAE Systems PLC United Defense Industries $3.97 billion March 2005
BAE Systems PLC National Sensor Systems $8.7 million October 2006
BAE Systems PLC Armor Holdings $4.1 billion July 2007
BAE Systems PLC MTC Technologies $450 million December 2007
QinetiQ Group PLC Apogen Technologies $300 million February 2006
QinetiQ Group PLC Analex $170 million January 2007
QinetiQ Group PLC ITS Corp. $90 million March 2007
QinetiQ Group PLC Boldon James Holdings Ltd $37 million October 2007
QinetiQ Group PLC Dominion Technology Resources $104.5 million August 2008
Serco Group PLC Resource Consultants $215 million December 2004
Serco Group PLC SI International $423 million August 2008

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