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General Government Top Upcoming Opportunities Roundup: Northeast

Over the next 6-12 months, a multitude of contracting opportunities will be coming down the pipeline for vendors providing IT solutions. Here is a roundup of some of the largest and most lucrative projects GovWin is currently tracking:

New York

 

Tracked Opportunity 78417: Transforming New York’s Information Technology Environment

New York is in the midst of completely revamping the procurement process for IT and IT-related services. In early August 2011, the state released a request for information (RFI) asking vendors for advice on how best to proceed with future solicitations regarding data center consolidation, voice over Internet telecommunications, identity and access management, as well as enterprise-wide procurement strategies for IT hardware, software and services. While this RFI will not lead to a comprehensive formal solicitation for these services, it will serve as a vehicle for future requests for proposals (RFPs) and RFIs, including opportunities for IT Office and Equipment and Cloud Computing that GovWin is already tracking.

 

Massachusetts:

Tracked Opportunity 65001: IT Hardware Services, Computers and Servers

The Executive Office of Administration and Finance for Massachusetts has decided to consolidate a handful of major statewide hardware contracts into a single term contract. Contracts ITC16, ITC16A and ITC36 are all scheduled to expire and will be replaced by contract ITC47 for hardware services, computers and servers. This opportunity has been valued at more than $630 million. A draft request for responses was released by the state to be evaluated by vendors. A formal solicitation is expected to be released in mid-October.

  

Tracked Opportunity 66804: Network Services

Originally, this opportunity began with a 2010 notice by the Massachusetts Operational Services Division for Telecommunications Network Services for telecommunications equipment, maintenance, implementation services, and related supplies for communication, voice, data, paging, IP, Web, and radio. However, in April 2011, the state modified the notice while simultaneously bumping the expected value of the contract from $250 million to $350 million. The state confirmed the scope of the services desired was expanded and delayed a solicitation release by several months. Since receiving vendor feedback through several meetings and an August 2011 RFI, the state has increased the overall value of this contract again to $600 million. A solicitation release is expected within the next 2-3 months.

 

Pennsylvania:

 

Tracked Opportunity 75693: Outsourcing of Mainframe and Midrange Computer Operations and Support

In 1998, the Pennsylvania Office of Administration contracted with Unisys to manage and support data center operations. In 2008, the state extended that incumbent agreement until 2014. However, the Office of Administration has begun initiating the first steps in re-soliciting these services well before the contract expires in order to ensure continuity of services. In August 2011, a request for quotes (RFQ) was released on the state bid page for data center strategy and advisory services. The company that wins this contract will assist the state in planning and implementing its long-term data center strategy, including gathering business requirements and drafting a rebid. According to a project timeline released at the RFQ pre-proposal conference, the solicitation for data center operations and support is scheduled for release in March 2012.

 

 Maryland:

 

Tracked Opportunity 42488: Enterprise Resource Planning System

GovWin has been tracking this project for the better part of four years, ever since a July 2007 announcement by the Prince George’s County Purchasing Office stated it would be releasing a solicitation for consultant services to help plan for the procurement of a document management/enterprise content management system. After four years of delays and budget issues, an RFQ was finally released in August 2011 for a program manager to assist the county during implementation of an enterprise resource planning (ERP) system. Originally the county intended to release a solicitation for ERP implementation concurrently with the program manager RFQ, but it appears the consultant portion will be procured before proceeding with the implementation. A solicitation for this project is expected to be released in Q4 2011.

 

Tracked Opportunity 58467: Statewide Human Resources Information System Integration

In May 2009, the Maryland Department of Budget and Management procured software for a new comprehensive human resources information system (HRIS). The integration portion of this project was not included in the requirements for software purchase. For reasons unspecified (most likely budget woes), procurement for integration services has been delayed, but it now appears the state is ramping up activity through its consulting and technical services contracting vehicle. Several RFQs for support personnel have been released by the state over the past year to provide services for the new HRIS. As of now, a comprehensive integration solicitation is scheduled for release by the end of this year, but a recent RFQ for a lead developer/consultant for the project was cancelled this past week. The state has not yet responded to inquiries concerning why or what effect this may have on the integration timeline.

 

 Delaware:

 

Tracked Opportunity 43478: Statewide Telecommunications Voice Systems

Since 2006, Delaware’s Department of Administrative Services has contracted with a number of vendors under Contract 06455RH for telecom voice services. Since May 2011, the state has confirmed it is working on drafting a rebid solicitation for these services. However, the scope of the requirements is apparently undergoing a significant rewrite, and it is not clear what shape the new opportunity will take. The release date has been pushed back several times over the past two months and is now tentatively scheduled for sometime in October.

 

New Jersey:

 

Tracked Opportunity 7786: Statewide Telecommunications Data Services

For the past 12 years, the state of New Jersey has contracted with AT&T and Verizon to provide data telecommunications and high-speed internet services to state government agencies. Though the state appears to be happy with the services it has received (exercising 11 renewal options since 2000), there have been signs over the last year that a potential rebid is in the works. In August 2010, an RFI was released for data and “Centrex-like” voice services, with the intention of gathering business requirements for a new solicitation. In May 2011, GovWin received confirmation that a solicitation is under development by the Treasury Department, but undisclosed difficulties have pushed a release back on several occasions. As of now, the state expects to release a rebid for this project sometime in Q4 2011.

 

 Together, these opportunities represent an estimated value of more than $2.1 billion, and none of them have a formal solicitation out on the street yet. As always, GovWin will continue to monitor these opportunities and others for additional information in the months and years ahead.

 

 

 

 

Good news snapshot: All-state IT budget projections (2010 - 2020)

Previous Deltek analyses and projections have demonstrated several key points with regard to state budgets. First, from FY 2009-2011, state budgets (all-funds, overall budgets) increased at an abnormal rate. Second, FY 2012 is the first projected overall state budget loss since Deltek began tracking in FY 1987. Third, and most promising for the business community, all indicators show that bloodletting should stop for overall budgets in FY 2013, with funds flattening and then beginning an upward trend.

With this in mind, the picture of overall all-state IT budgets becomes clearer. Importantly, actual IT budgets for FY 2012 show an increase of 3.32 percent. To be succinct, this is fantastic news for the IT vending community currently struggling with the economy (subscribers have access to a detailed data table, here). However, IT budget projections for FY 2013 indicate an overall loss of -2.98 percent. While admittedly not the best news for the overall projected recovery, this is really considered a minor bump in the road. It is likely that IT projects remained funded, with cuts lagging somewhat behind the overall FY 2012 cuts for most states. So, some projects may have been cut in 2013 as a way to offset other cuts from 2012 (creative state budget math). However, looking further forward, the projections are more positive, with an indicated overall growth rate of 8.37 percent for 2014 and an average 4.60 percent annual growth rate from FY 2013 to FY 2020 (subscribers detailed table, here and figure 1, below).

Figure 1: All-State All-Funds IT Budget Projections (FY 2010 - 2020)

Click on image for full-sized version

The projections outlined in figure 1, above, are solid (based upon sound data and a robust model). However, since much of the 2013 IT budget data has yet to be released (21 out of 51 reporting), it is possible that early projections are coming in lower than the actual numbers. FY 2013 overall budgets are indicating a recovery, after the overall losses of 2012. So, it is possible that this same recovery will bear out for IT budgets in 2013.

Analyst’s Take

As always, even with a sound, significantly correlated model, projections are always the victim of the myriad of ethereal variables that can possibly affect them. With our current projections of an overall IT budget loss for FY 2013, vendors should not be overly concerned. If a loss is eventually realized, it is relatively small and mitigated by gains in previous and subsequent years. Even with a loss, IT budgets should be back on track and growing by 2014. However, as discussed above and looking at the 95 percent confidence interval, 2013 could show flat growth or even a slight increase. For vendors used to budget cuts, project delays, and other economic challenges, the projection range of a slight increase to a slight decrease for FY 2013 should have minimal impact. Most IT business prospects should remain relatively consistent with some of the cuts experienced so far. Looking beyond 2013, the picture becomes clearer and projections more positive.

Follow all of the GovWin State and Local Top Opportunities, Reports, and Podcasts, here.

Follow Chris Cotner on Twitter, here.

 

Houston, Texas FY 2012 budget analysis; themes of consolidation and cuts reign

Houston, Texas is the fourth largest city in the United States, with a population of 2.1 million and a broad industrial base in energy, manufacturing, aeronautics and transportation. After being elected in late 2009, Houston Mayor Annise Parker declared her administration would focus on balancing the city’s budget and selecting a new police chief, and Houston’s fiscal year (FY) 2012 proposed budget rings of the same ideals.

In order to combat a $140 million shortfall for FY 2011, Parker’s City Council raised water and sewer rates by nearly 30 percent on an average single-family household, which is a higher rate than many major U.S. municipalities. In the newly-proposed budget, Parker mentions public safety several times and calls it “our [main] priority.” Mayor Parker writes, “Developing this budget has not been without difficulty, challenges and tough decisions. The long-term forecast is for better economic times ahead, but we are not there yet.” Indeed, Houston’s Proposed 2012 Budget reflects just that – a city dedicated to improving financial conditions despite tough economic times.

Houston has had to overcome financial, personnel and legal stresses this past year. In order to balance the city’s budget, departmental general-fund budgets were reduced between 4 and 27 percent compared to FY 2011 spending levels. Most of these cuts were accomplished through full-time employee (FTE) layoffs; FTE's were reduced by 8.61 percent from FY 2011. Houston is also currently involved in a lawsuit and countersuit with American Traffic Systems (ATS), the city’s red-light camera vendor. Last November, an election was held in which voters rejected the use of red-light cameras. The city subsequently filed a federal suit for a ruling on the legitimacy of the election and the city's "rights and obligations" in terminating its contract with ATS to run the cameras through May 2014. In June, the election was deemed invalid because the citizens' challenge to the red-light camera ordinance came too late. ATS countersued the city for breach of contract, which could potentially cost Houston $25 million. Leaving contracts up to public approval could result in hesitation from other government contractors when choosing whether to engage in business with the city or not.

Despite these troubles, spending cuts, layoffs and increasing revenues have greatly improved the city’s financial situation, and the FY 2012 budget is an optimistic one. The overall budget is $100 million less than current appropriations, and Houston is looking at a surplus of $250.8 million. Additionally, tax projections are $518.9 million (5.7 percent more than FY 2011), which indicates an improvement in household spending. The extra money is being put to good use: increasing Houston’s fund balance reserve in an effort to meet the “7.5 percent level maintained during better economic times.”


Click on the image above for a full-sized version

To learn more about the city of Houston’s FY 2012 budget, read GovWin’s AP here.

Health Care and Social Services September Review

September proved to be rather eventful for health care. Deltek celebrated the Sixth Annual National Health IT Week, September 12-16, 2011, by releasing a series of blogs highlighting IT progress in the states, along with vendor recommendations based on those trends. National Health IT Week is a collaborative forum where public and private health care constituents work in partnership to educate industry and policy stakeholders on the value of health IT in the U.S. health care system.
 
Deltek showcased blogs on health care hot topics including health information exchanges (HIEs), health insurance exchanges (HIXs), electronic health records, and an analysis of state health IT budgets. Also noteworthy, Deltek’s report, “Top Opportunities for FY 2012 — Health Care,” was featured in an article earlier this month in InformationWeek. The report highlights major health IT projects in three main areas: HIEs, HIXs and Medicaid management information systems (MMISs).
 
Additionally, Deltek’s Senior Manager of State and Local Industry Analysis Chris Dixon held a webinar last week promoting his recently-released report, “Health Care/Social Services Market, 2011-2016.” The report predicts demand for vendor-furnished information systems and services by state and local health and human services agencies will increase from $16.1 billion to $18.8 billion by 2016. Key trends covered in the report include health IT, federal health care reform, anti-waste, fraud and abuse efforts, and outsourcing.
 
On the social services side, Deltek Health Care and Social Services Analyst Kate Tussey attended the 2011 National Women, Infants, and Children (WIC) Association’s (NWA) Technology Conference in Pittsburgh, Pa. The conference is held every two years and provides a chance for WIC leaders to network and share experiences. This year, the conference honed in on areas such as WIC management information system (WIC MIS) enhancements, electronic benefit transfer (EBT) technology, quality data collection and information security. Several of the presentations centered on the 2020 WIC EBT mandate and how states are surprisingly feeling heavy pressure from requirements and implementation deadlines. WIC EBT systems are expected to drive down costs and fraud, and are considerably more technical than those employed by the Supplemental Nutrition Assistance Program (SNAP) – these cards must figure out eligible foods that may change weekly, in addition to cardholder balances. Tussey will be releasing an in-depth recap of this year’s conference in the coming weeks, so stay tuned!
 
Here is a look at current health care projects:
  • Florida – Prior Authorization, Case Management and Utilization Management: The Florida Agency for Health Care Administration (AHCA) released a request for information (RFI) for Prior Authorization, Case Management and Utilization Management Services in support of the Provider Service Network (PSN) MediPass Program. AHCA is interested in information concerning innovative programs utilizing proven cost containment interventions for health care delivery that may be used for prior authorization, case management and utilization management services. RFI responses are due October 14, 2011 by 5:00 p.m. EST.
  • Mississippi – Preadmission Screening and Resident Review (PASRR) Administration: The Mississippi Division of Medicaid released a request for proposals (RFP) for Mental Health Preadmission Screening and Resident Review (PASRR) Administration. Proposals are due by 3:00 p.m. CST on October 21, 2011.
  • Texas – The Harris County Hospital District (HCHD) of Texas may have a requirement for International Classification of Diseases (ICD)-10 Implementation and Conversion. HCHD released an RFP for ICD-10 assessment consulting services. Proposals are due on October 10 by 2:00 p.m. CDT. The district anticipates the contract will begin January 1, 2012 and continue for one year until all services are completed.
  • Ohio – Creation of an Integrated Health Care Delivery System for Medicare and Medicaid Eligible Beneficiaries: The state of Ohio Department of Job and Family Services (ODJFS) released an RFI for the Creation of an Integrated Healthcare Delivery System for Medicare and Medicaid Eligible Beneficiaries on September 16. Responses are due by 3 p.m. Local Time on October 14, 2011.
  • Colorado – Health Insurance Exchange Call Center Services: The Colorado Health Care Policy and Financing may release an RFP for Health Insurance Exchange Call Center Services. The Colorado Health Insurance Exchange (COHIEX) expressed the need for a call center in a draft timeline for exchange progress. 
Here is a look at current social services projects:
  • New York – Integrated Application Suite for Coordinated Consumer Services: The Connecticut Department of Developmental Services, on behalf of the Department of Social Services, released an RFI for an Integrated Application Suite for Coordinated Consumer Services. RFI responses were due September 16.
  • Massachusetts – ICD10 Implementation: The Executive Office of Health and Human Services (EOHHS), Office of Medicaid, released an RFI for ICD-10 Implementation on September 21. The RFI seeks responses from vendors who will assist EOHHS in crafting a solicitation to implement certain aspects of the conversion from ICD-9 to ICD-10. RFI responses were due September 28.
  • Tennessee – Automated Child Support Enforcement System: The Tennessee Child Support Enforcement Services (TCSES) Users Support is currently gathering requirements for an integrated case management system in support of the Automated Child Support Enforcement System. The department plans to issue an RFP for feasibility study services in late 2011 or early 2012. Thereafter, TCSES will determine whether or not to release an RFP for a vendor to develop and implement an integrated case management system.
  • Tennessee – Integrated Workers Compensation System (WCS) Replacement: The Tennessee Department of Labor and Workforce Development (LWFD) issued an RFI for an integrated Internet-based operating system to replace the Workers Compensation System (WCS) program. Additionally, the RFI seeks to collect information to establish realistic project timelines to support planning efforts and RFP development. RFI responses are due by 4:00 p.m. CDT on October 21. Oral presentations will be held October 24 - November 10, 2011.
  • Pennsylvania – Data Mining and Predictive Analysis: The Pennsylvania Department of Public Welfare (DPW) released an RFI on September 26 for Data Mining and Predictive Analysis for detecting waste, fraud and abuse in programs DPW oversees. RFI responses are due no later than 5:00 p.m. EST on October 7.
  • South Dakota – Commercial Off-the-shelf Document Generation System: The state of South Dakota Department of Social Services (DSS) released an RFI for a Commercial Off-the-Shelf (COTS) Document Generation System on September 8. Responses were due September 19 and are now under evaluation.
Don't forget to follow Deltek's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn.

NWA IT Conference: The Future of WIC is Now

Deltek attended the 2011 National Women, Infants, and Children (WIC) Association’s (NWA) Technology Conference September 21-23, in Pittsburgh, Pa. For those not familiar with the conference, it’s held every two years and provides an opportunity to network, learn, and share technological directions for WIC’s future with industry leaders. Topics this year included WIC management information system (WIC MIS) enhancements; improving WIC service delivery; the latest information on electronic benefit transfer (EBT) technology; and quality data collection and information security.

After attending the Medicaid management information system (MMIS) Conference earlier this year, and as an analyst researching health care reform, health insurance exchanges (HIXs) and health information exchanges (HIEs) on a daily basis, I was surprised and somewhat critical of the dire picture the WIC program painted itself in at the NWA IT Conference. Many of the presentations surrounded the new WIC EBT mandate for 2020 and how states are struggling to juggle requirements to implement in time. I wondered how they could say all of this knowing that next door in the Departments of Health and Insurance, they have to implement brand new HIXs, eligibility systems, and MMIS upgrades by 2014. Those departments would be overjoyed if they could add another six years to the development process. Another issue I had was that each state already has EBT technology employed through the Supplemental Nutrition Assistance Program (SNAP). To me, this means the technology already exists, and shouldn’t be a foreign concept to WIC programs.

With these misconceptions swirling, I have to say it was a great idea that I stayed to learn more about the WIC program. Reverend Douglas Greenaway, president and chief executive  officer of the NWA, opened the conference by saying that 53 percent of children born in America are on the WIC program. As the joint select committee looks to slash the federal budget, WIC has moved off of the protected list and is currently on the negotiating table. Current funding for the program is not enough to handle all of the applicants who need assistance. Caseloads are continuing to rise and food inflation is currently at 6 percent.

WIC EBT will help drive down costs and fraud, but as I learned at several sessions, it will be a challenge to implement. Like with early innovators in the HIX arena, states will look to benefit from those that have already blazed the trail. Food and Nutrition Services (FNS) estimates that 50 percent of all state agencies are working to implement EBT, with 40 states currently in the planning phase. Seven agencies are in the implementation phase, while 10 currently have statewide WIC EBT. Since WIC EBT is tied closely with not only the state, but retailers, it will be interesting to see the types of integration that will occur as agencies choose online or offline systems, especially those states that have grocery store chains spanning borders. WIC EBT systems are much more technical than those employed by the SNAP program because cards and retailer machines must determine which foods are eligible (sometimes weekly) and the balance left to the card owner.

Deltek is tracking many WIC EBT projects in our database and issued a report last year providing background information on the WIC vertical. An analyst recap of the conference is in the works and will be posted shortly. As always, don’t forget to follow the Health Care and Social Services team on Twitter @GovWin_HHS or connect with us through LinkedIn.

FCC seeks comment on NG911

Last Thursday, the Federal Communications Commission adopted and released a notice of proposed rulemaking for the deployment of text-to-911, next generation 911 (NG911) applications, and an NG911 framework. The goal of this notice is to “accelerate the development and deployment of next generation 911 technology that will enable the public to send emergency communications to 911 public safety answering points (PSAPs) via text, photos, videos, and data …” While many states and localities are working to implement NG911 technology that will eventually be able to receive texts and videos, even those that have NG911 systems installed cannot take full advantage of the technology. In most cases, these systems are not fully-featured NG911 systems; they are “NG911-ready” systems, which means that the infrastructure is in place to eventually support add-ons that will allow for the receipt of videos and texts.

 

At present, only a few communities involved in trial programs, such as Durham, N.C., have full access to this technology. As stated during the Texas Commission on State Emergency Communications’ August 9 board meeting, the majority of states and communities’ NG911 systems are “capable of handing live calls, but will not be capable of handling text messaging, yet. Text messaging is one of many advance features that can be added, once the infrastructure [is] in place.” Texas is currently under negotiation for its Emergency Services IP Network (ESInet) project, which will provide the installation of the basic infrastructure as well as the necessary hardware, software and system training to make the state NG911-ready.

 

Once fully operational, NG911 systems will have the ability to revolutionize how first responders approach and respond to emergency situations. Through enabling texting capabilities, people who currently cannot call 911 due to the nature of the emergency (e.g. they are hiding during a break in and do not want to alert the robber to their location) will have the ability to access the assistance they need.  Video will mean that paramedics can view medical conditions and the emergency scenario, whether it be a fire or a car accident, before they arrive on the scene. This will help them ensure they bring all of the proper equipment, including that which may not be standard such as oxygen masks for pets. It will also allow dispatchers to verbally relay basic emergency care procedures prior to EMS arriving.

 

This notice of proposed rulemaking asks for guidance on several issues, including:

  • Determining what role the FCC should play in facilitating and/or accelerating the implementation of text-to-911
  • Making recommendations on the regulatory and non-regulatory approaches to ensuring the implementation of NG911
  • Providing a cost-benefit calculus of different regulatory options to determine the proper role for the  commission in the implementation of NG911
  • Reviewing the different types of communication currently available including Short Message Service (SMS), IP-based messaging and Real-Time Text (RTT) to determine their strengths and limitations and whether the capabilities should be included in text-to-911
  • The potential for downloadable apps for consumers and PSAPs to “support capabilities for an early roll-out of text and multimedia functionality"
  • Making a determination about whether NG911 traffic be prioritized, either on a regular basis or during large-scale disasters
  • Determining the path toward integration and standardization of NG911 systems including how or whether to ensure uniform timeframes for different providers in implementing ESInets and Internet Multimedia Subsystem (IMS) 

Analyst’s Take:

The notice is open for comment for 60 days after it is published in the Federal Register. This period provides vendors an opportunity to shape the regulatory environment that they will ultimately be held accountable to. Vendors should look at this as an opportunity to influence the FCC in the same way they work with localities prior to the release of a solicitation to ensure requirements favor their company. This is their chance to promote their technologies and lobby for fewer or more regulations. Not only should cell phone carriers review this notice, but companies that have the ability to implement IP systems and companies interested in developing applications to be used on the system should review as well. The number and variety of potential applications are endless and include applications that provide medical records and applications that may be able to develop a direct chat system to operate between dispatchers and callers. Through commenting on the various sections of this notice, vendors have a unique opportunity to shape the regulatory environment in which they will be operating and ensure their proprietary technology becomes standard.  At the very least, they can work to establish timeframes they are sure they can meet and thereby ensure they are not pushed out of the market due to noncompliance.

Mix of tax increases, spending cuts helps Philly stay afloat in budget wars

In March, 2011 Philadelphia Mayor Michael Nutter unveiled his vision of the city’s fiscal future, releasing his proposed 2012 budget as well as the city’s long-term 5 Year Financial and Strategic Plan. In many ways it was simply a wish list: in addition to needing City Council approval before adoption, the mayor had decided to announce his figures on March 3rd, a week before Pennsylvania Governor Tom Corbett was set to release his own state budget.

The two policy makers offered a study in contrasts. Nutter, a lifelong resident of deep blue Democratic Philadelphia, which hasn’t elected a Republican mayor since 1947, was looking for a way to preserve city services offered to and cherished by his constituents. Corbett, who weathered a Tea Party challenge to his right on the way to winning the Republican nomination and eventually the governor’s mansion, was looking to polish up his bonafides with a party base that still wasn’t entirely convinced of his dedication to the budget slashing fervor he had promised during the election. By opting not to wait until after Corbett released his figures, Nutter was largely in the dark regarding the level of financial assistance the city could expect from the Commonwealth.

This is no small matter. Faced with what Nutter himself called “a triple threat from cuts in federal and state funding as well as cuts to Philadelphia School District resources,” the city’s ability to fund government services at 2010-11 levels would be severely tested.

“There is no easy way to tackle a recession,” said Nutter in his budget address.

Indeed, Corbett’s budget wound up slashing more than $1 billion in education funding on the state level as well as financial aid to municipal school districts. The result was a $292 million cut in state funding to Philadelphia schools in basic education, charter school reimbursement, accountability block grants, educational assistance and dual enrollment programs. The school district requested an additional $102 million from the city, leaving Nutter and the City Council scrambling to devise a way to pick up the slack without gutting the whole school system. His overall theme for Fiscal Year 2012 was to cautiously (and preemptively) draw a line in the sand. “We don’t know exact details yet [for the state budget] but as we wait for possible cuts, we ask that these cuts don’t force us to balance our budget on the backs of those who are least able to carry the weight.”

Spending
 
Click on the image above for a full-sized version.

For a city anticipating cuts in federal and state aid, Philadelphia’s spending resembles the budgets of pre-recession 2008 rather than that of its counterparts on the state and federal level. While General Fund expenditures are technically down $330 million from last year’s budget, this is almost entirely a mirage caused by moving the Department of Human Services from the General Fund to the Grants Fund. Remove that from the equation and General Fund spending actually increased by more than $40 million over last year’s budget. At the All Funds level this trend is even more pronounced, with the city expecting to spend $7.35 billion this year compared to $6.78 billion in 2011.

The largest single departmental increase in spending over last year goes to the Office of the Director of Finance, which saw a nearly $200 million funding increase from $1.27 billion in 2011 to 1.469 billion in 2012. However, the vast majority of this increase was due to rising healthcare costs, pensions, miscellaneous payments and other fringe benefits for existing city employees. Philadelphia, like many other governments, has seen a dramatic jump in the cost of health and retirement benefits. The pension fund is less than 50 percent funded and the cost of pension and healthcare costs for city employees accounts for 30 percent of the current budget.

Continuing this theme, the next largest departmental gains from Fiscal Year 2011 to 2012 belonged to the Department of Human Services. The Department of Human Services moved from the General Fund to the Grants Fund this year and saw a year-over increase in funding of $94 million from Fiscal 2011. A little more than $42 million of that increase is due to healthcare and pension costs, but the department also saw nearly $52 million in additional purchases of services this year. Notable IT expenditures include $500,000 for global positioning technology for the First Judicial District, $387,418 for case management and data development and service integration and $700,000 for the Free Library of Philadelphia’s LEAP After School program. Since 2010, many of the largest IT line item expenditures have been funded through the Division of Technology.

The largest department decrease in funding came from the Office of Housing and Community Development, which took a $30 million hit from last year’s budget. This drop in spending needs to be put in the context of last year’s $80 million increase from 2010 to 2011. Overall spending in the office is still up $50 million over the last three years, and virtually all of that new spending was in purchase of services. Most of these purchases are for non-IT related expenditures, but one notable item of new spending is $100,000 earmarked by the city for consulting services related to the upgrade and replacement of the following IT solutions: Cross Accounting Software, Mortgage Management Software Migration, Microsoft Exchange Migration to Lotus Notes and Data Center Consolidation. All of these projects have at least the potential to go out to bid at some point depending on consultant recommendations. At the very least they provide vendors insight into which technologies are due for upgrade or replacement over the next 6-18 months.

The second largest decrease was the Law Department, which cut more than $26 million, more than half of last year’s $45 million figure. The overwhelming majority of cuts came from Purchase of Services, with the city allocating $22 million less in Fiscal 2012 than it did in 2011. There were no notable cuts or increases in IT spending within the department.

To read GovWin's complete budget analysis for the City of Philadelphia, read our AP here. 

Connecticut awards contract for criminal justice information system

Earlier this week, Connecticut Governor Dannel Malloy announced the signing of a contract between the state and Affiliated Computer Services, Inc. (ACS) for the highly-anticipated criminal justice information system (CJIS). Connecticut’s CJIS Governing Board has been planning this project since 2008, when the project was approved by the state’s general assembly. Once in place, the system will provide access to comprehensive criminal history records to all state branches of government.

GovWin has tracked the Connecticut CJIS project from April 2008 through its recent implementation. The state started the project by hiring MTG Management as a consultant in 2009. Following the consulting effort, the state issued a request for information (RFI) in March 2009. Over the next year and a half, the project was stalled due to possible lack of funds. In mid-2010, several drafts of the CJIS solicitation were presented to the state legislature, and the RFP was issued in October 2010. With a price tag estimated at $25 million, many were invested in when, and if, the project would be awarded. As stated above, those fears were set aside when Governor Malloy announced the contract signing with ACS.

Last month, GovWin Senior Analyst Chris Cotner posted a blog detailing good news as it relates to public safety budgets in fiscal years 2010 through 2013. According to the analysis, over the next two years (FY 12 and FY 13), there is a strong likelihood that public safety and homeland security budgets will increase, which is great news to vendors. It is also good news to state and local governments that have tabled projects over the past few years due to lack of funding. While this market may not see the boom it once saw prior to the market collapse and subsequent recession, the good news is this market will begin to see more growth.

GovWin Public Safety and Homeland Security Senior Analyst Jeff Webster sees these increased funds going toward public safety communications, and expects agencies will begin to look for new tools to do more work with less personnel. One of these tools will be criminal justice information systems. In order for state and local governments to effectively reduce time in solving crimes, new computer systems, document management and other software will be needed to combat the loss of public safety officials laid off in the past few years. Other states can use the new Connecticut CJIS project as a benchmark for what to strive for. While the cost of the CJIS project may be out of reach in the short term, many states may begin their own statewide CJIS plans considering the time required to plan such a project.

Analyst’s Take:

Over the next few years, as many state and local agencies remain tight on hiring, software and other tools like traffic enforcement cameras will be essential in doing more with less. While funding may increase slightly, it will still be important to find ways to use that money more efficiently. Criminal justice information systems and other document management systems can streamline a city, county or state’s information in a way that is easier to understand and saves time and effort. Vendors can begin to work with smaller localities as well as states in developing plans for CJIS programs. Hiring a consultant at the state level and using Connecticut’s model as a guide is a good place to start. State and local agencies can determine what their needs will be now and in the future, and come up with a plan to present to the state or local legislature. Securing support from the top will only make it easier when implementing from the bottom.
 

Good news details: All-state IT budget vertical analysis (2010-2013)

As part of our analysis of state IT budget data, Deltek has published vertical analyses and projections of health care, social services, justice, public safety, and homeland security. Also, we have published vertical IT budget analyses of some of the larger states (California, New York, Texas, Florida, Pennsylvania, Ohio, Massachusetts, Illinois, North Carolina, Michigan, and Virginia). However, we have yet to publish overarching analyses and projections of IT verticals across all states. In fact, even with all of our budget publications, we have yet to focus any articles in their entirety on state IT. As part of Deltek’s all-state budget analysis series, this article launches a sub-series of all-state IT budget vertical analysis and projection.

Previous analyses and projections (linked above) have demonstrated several key points. First, from FY 2009-2011, state budgets (all-funds, overall budgets) increased at an abnormal rate. Second, FY 2012 is the first projected overall state budget loss since Deltek began tracking in FY 1987. Third, and most promising for the business community, all indicators show that bloodletting should stop in FY 2013, with budgets flattening and then beginning an upward trend. With these key points on overall budgets in mind, the picture of overall all-state IT budgets becomes clearer. Importantly, IT budgets for FY 2012 show an increase of 3.12 percent. To be succinct, this is fantastic news for the IT vending community (see table 1).

Table 1: All State Budgets Vertical Comparison FY 2010-2013
 
Note: FY 2010 missing Arizona, Hawaii, Michigan, Nevada, and Ohio; FY 12 is missing Oklahoma; FY 13 includes data from 21 states (Arkansas, Connecticut, Florida, Hawaii, Indiana, Iowa, Maine, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oregon, Texas, Washington, and Wisconsin). Subscribers have access to more complete data and analysis, here.

Analyst’s Take:

  • With some data missing from FY 2010 and FY 2013, making direct, year-to-year comparisons is difficult. The best year-to-year comparisons are from FY 2011 to FY 2012.
  • The best news for FY 2012 IT is an overall 3.12 percent growth rate. This is great news in an otherwise down budget year.
  • Similarly to overall budgets, the community development vertical is the smallest IT budgetary expenditure for all states in each of the fiscal years included (from 0.11 percent to 0.00 percent). It also shows the largest losses in FY 2012 (similarly to overall budgets). While community development funding can do wonders for future economic growth, it is clear that many states have reduced its importance in shorter-term economic planning.
  • Higher education is the biggest vertical decrease (-39.12 percent) for FY 2012. As states looked for any and all ways to save money, higher education was on the block in many budgets. It is likely that the decrease in higher education was seen as a trade-off between keeping other essential IT expenditures and reducing higher education IT functioning that may have been viewed as less critical.
  • General government services is the largest percentage of state IT budgets for each year included (from 41 to 51 percent). This is not surprising, since GovWin classifies many budgeted enterprise IT functions, management, and infrastructure costs as part of this vertical. Look for GovWin to provide more detail on this general government IT data moving forward.
  • Social services is the largest gainer (+87.48 percent) in FY 2011. Again, this is difficult to judge, as FY 2010 is missing some data. However, it is still important as states move toward creating and/or updating Medicaid management information systems (MMIS), WIC (Women, Infants, and Children program), and EBT (electronic benefit transfer) to improve service delivery and efficiency. As the state economies continued to struggle downward and public assistance rolls swooned in FY 2010 and 2011, it is also likely that states continued to prioritize IT spending to increase efficiency in social services.
  • Health care is the largest gainer (+34.01 percent) in FY 2012. This is no surprise, as there are many federal grant deadlines for health insurance exchanges (HIX) in 2011 and 2012. States will continue to update/create HIXs and MMISs as they race toward various federal deadlines. Look for IT spending to continue at significant levels through 2013/2014 as the ACA deadline approaches.

Final Analysis
While FY 2012 is generally a down year for state government budgets, states will still procure the goods and services they need. In terms of IT spending, the best news is that FY 2012 is projecting gains from 3.31 to 13.97 percent. Compared to the 3.18 percent overall budget losses projected for FY 2012, this is a good sign for an improved contracting environment moving forward. While the projected picture for FY 2013 and forward is still somewhat unclear, even with projected losses for the sample of states in table 2, all sources combined point to continued IT spending gains in FY 2013. So, while some vendors may be considering withdrawing from the state market as they are unable to weather the more-competitive recessionary market, many more will stay put. Vendors who remain will be very well-positioned for the coming recovery.

For subscribers, this article contains additional analysis of the 21 states with actual FY 2013 data, compared and contrasted to illustrate trends and projections,
here.

Follow all of the GovWin State and Local Top Opportunities, Reports, and Podcasts,
here.

Follow Chris Cotner on Twitter, here.

Good news details: All-state budget vertical analysis (2010-2013)

This article is part of the continuing "Good News" series with analysis and projections of state budgets. In particular, this article launches a new part of the series on all-state budget vertical analyses.

As part of our analysis of state budget data, Deltek previously published analyses and projections of the health care, social services, justice, public safety, and homeland security verticals. We also published vertical budget analyses on several larger states (California, New York, Texas, Florida, Pennsylvania, Ohio, Massachusetts, Illinois, North Carolina, Michigan, and Virginia). However, we have yet to publish overarching analyses and projections of verticals across all states. With this article, Deltek launches an all-state budget vertical analysis series.

Previous analyses and projections (linked above) have demonstrated several key points about state budgets and related business prospects. First, from FY 2009-2011, state budgets increased at an abnormal rate. Much of this increase can be attributed to key factors including expired stimulus funding, increased health care costs (both for state workers and Medicaid), increased retirement/pension costs for state workers, and increased unemployment compensation. Second, FY 2012 is the first projected overall state budget loss since Deltek began tracking in FY 1987. This loss is mostly due to expired stimulus funding and states’ revenues decreasing as the result of the recession and slower economic growth. With decreased revenues, many states had to slash budgets, including measures such as laying off state workers, increasing state employee contributions to health care and retirement, freezing or reducing state worker pay, consolidating agencies, implementing efficiency measures through IT, and cutting departments and programs deemed unnecessary in difficult economic times. Third, and most promising for the business community, all indicators show the bloodletting should stop in FY 2013, with budgets flattening and then beginning on an upward trend. These same key points bear out in this all-state vertical analysis (see table 1).

Table 1: All-State Budgets Vertical Comparison FY 2010-2013

Note: The data in table 1 for FY 2013 is not complete (it only includes data for 21 out of 50 states, plus D.C.). As a result, any direct comparisons and projections between FY 2013 and other states are limited. Subscribers have access to more detailed analysis, including states with FY 2013 budget data, here.

Analyst’s Take:

The community development vertical is the smallest budgetary expenditure for all states in each of the fiscal years included. It also shows the largest losses in FY 2012 and 2013. While community development funding can do wonders for future economic growth, it is clear that many states have reduced its importance in shorter term economic planning.

Economic development funding took a big hit in FY 2011. This may have been the result of delayed stimulus funding. It may have also been the result of increased funding to health care and education spending. However, this is an interesting budgetary priority considering many states have struggling economies.

Health care is the largest percentage of state budgets for each year. This is not surprising, as states continue to struggle with health care costs and look for ways to deliver services more efficiently through IT.

Public finance is the largest gainer in each year included. The vertical includes state financing, investments, insurance payments, and retirement systems. States are facing increased insurance premiums and retirement costs for employees, which is having an impact on this vertical. States are also looking to improve efficiency through IT (e.g., enterprise finance systems), which is also accounting for some of the budgetary growth.

Homeland security and public finance are the only verticals showing gains in FY 2012. Homeland security funding is relatively stable with slow growth rates supported by many associated federal programs.

Final Analysis

While FY 2012 is generally a down year for state budgets, states will still procure the goods and services they need. The 3.18 percent loss from FY 2011-2012, while significant as a loss, is not going to have a deep and lasting effect on state contractors. Quite the contrary, as contractors settle in to the reality of fewer contracts for this fiscal year, opportunities, contracts, old projects, and new projects should all improve in 2013. So, while some vendors may be considering withdrawing from the state market, many more will stay put. Vendors that remain will be very well-positioned for the coming recovery.

For subscribers, this article contains additional analysis of the 21 states with actual FY 2013 data, compared and contrasted to illustrate trends and projections, here.

Follow all of the GovWin State and Local Top Opportunities, Reports, and Podcasts, here.

Follow Chris Cotner on Twitter here.

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