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Compliance Failings Hinder Defense Business System Efforts

The Department of Defense is working towards business system modernization and auditability targets, but some agencies are struggling with competing priorities. According to an inspector general report published October 28, 2014, the Defense Logistics Agency (DLA) enterprise business efforts have failed to synch compliance requirements and implementation objectives, creating challenges for the organizations financial managers.

The Defense Business Council is responsible for portfolio analysis and process integration related to defense business systems (DBS) lifecycles. If an implemented DBS doesn’t comply with the business enterprise architecture (BEA), it might not get funding approval from the Defense Business Council. Each year, the Defense Department updates BEA transformation priorities and capabilities. In February 2013, the tenth version of the BEA was delivered containing 15 standard, integrated, end-to-end business processes, including the business processes for Procure-to-Pay. The BEA Procure-to-Pay business process supports purchasing of goods and services while generating accurate and reliable financial management information.

DLA started Business Systems Modernization (BSM) in 2000.  The Enterprise Business System (EBS) was developed in FY 2007 through the combination of business system modernization initiatives with customer service management and product data management initiatives. Some 22,000 personnel use EBS to support and operate a $44 billion global enterprise. By September 30, 3013, DLA spending on EBS implementation reached $2.5 billion. The business case document for EBS submitted with the FY 2015 budget request included $18.9 million for development, modifications, and enhancements (excluding planning costs) as well as operations and maintenance funding that amounted to $120.1 million. Approximately $21.0 million in operations and maintenance resources would provide government personnel for the program.

At the end of October 2014, review of the EBS program revealed some implementation shortfalls. According to the Defense Department’s Inspector General (IG), the EBS program management office did not configure EBS to comply with evolving BEA standards a top priority. In the IG’s words, they “placed higher priorities on ensuring mission accomplishment.” The PMO also did not complete re-engineering of the Procure-to-Pay business process. Validation and certification procedures were not executed by the Deputy Chief Management Officer in a way that ensured managers implemented and reported BEA requirements. The DOD’s Inspector General found that the Defense Logistics Agency did not fully implement the business enterprise architecture Procure-to-Pay business process in the Enterprise Business System. The system suffers incorrect posting logic and lacks the re-engineering to avoid abnormal balances. As of the end of September 2013, $942.2 million in abnormal balances were reported for DLA activities within the general ledger. This creates a need for Although DLA has spent $2.5 billion on EBS, the agency’s financial managers cannot rely on EBS trial balance data to prepare financial statements.

As the DOD IG notes, “Data standardization was essential for achieving auditable financial statements and providing DoD managers with the financial information needed to make effective day-to-day budget and management decisions.” The FY 2015 business case for the EBS program highlights the benefits it will bring to the agency: “Enterprise-wide data is more readily available and financial cycle times shorter. Virtually all companies with such systems report substantial reductions in financial cycle times. With increased financial accountability, DLA will be able to achieve an unqualified audit certification for the first time.” However, until the various compliance and re-engineering issues are addressed, progress toward DOD audit readiness goals will be hampered.

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

 

GovWin Recon - November 19, 2014

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

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GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

 

Agencies Continue to Trudge Toward Data Center Consolidation and Strive for Mobility

As part of agencies’ ongoing efforts to reduce costs and gain efficiencies, they are continuing to pursue data center consolidation and optimization.  At the same time, they are implementing mobile applications and environments for the convenience of constituents and employees.

Deltek’s new Federal Update:  Cloud, Data Center, Big Data and Mobility, 2014-2019 report delves into the status of federal data center consolidation and mobility efforts, as well as cloud computing and big data. 

The evolution of FDDCI resulted in a shift in focus from consolidation to optimization of core data centers, which helps agencies focus resources on investments and strategies with the highest return.  However, measuring success and ROI is complex and challenging, and has resulted in mixed information regarding progress. 

The number of identified data centers continues to grow and change with the shifting definition of a data center.   At the start of the Federal Data Center Consolidation Initiative (FDCCI) in 2010, agencies identified approximately 2,000 data centers, but over time, with more detailed inventorying efforts and a change in the size of what is considered a data center, agencies have now found over 9,600 data centers.  242 of these data centers are considered core data centers.  Agencies plan to close an additional 3,127 of non-core data centers.

A September GAO report highlighted agency cost savings and avoidance due to data center consolidation.  19 out of the 24 agencies participating in the FDCCI reported achieving an estimated $1.1 billion in cost savings and avoidances between FY 2011 and FY 2013.  21 agencies collectively reported planned savings of $2.1 billion in cost savings and avoidance by the end of FY 2015 for a total of $3.3 billion by FY 2015, $300 million above OMB’s original $3 billion goal.  Between FY 2011 and FY 2017, agencies plan to have achieved total cost savings or avoidance of $5.3 billion.

But signals are mixed regarding progress.  GAO stated that agency savings and avoidance calculations were not consistent among agencies.  Additionally, some agencies experience difficulties determining or uncovering baseline spending.  A Meritalk survey of federal IT managers showed that 52% of respondents rated their agency’s FDCCI efforts at a “C” or below, while only 6% gave their agency an “A.” 72% said that the number of data centers in their agency had stayed the same or increased since the FDCCI launched in 2010.

Mobility programs in the federal government continue to advance, driven by cloud platforms and Virtual Desktop Infrastructure (VDI), although securing mobile devices and data remain areas of focus.  Continued expansion in the use of mobile communications and computing solutions is expected to rely on accelerating network modernization and optimization, including the use of Internet Protocol and cloud-based technologies.

The purpose of the Federal Mobility Strategy is to accelerate the federal government’s adoption of mobile technologies to improve delivery of government information and services, engage citizens more fully, reduce the costs of government operations, and increase federal workforce productivity.  Much of federal agencies’ mobile computing direction is driven by the Federal Digital Strategy, released in May 2012.  Its goal was to move agencies to an enterprise-wide model for procurement of mobile devices and services.  The strategy outlined objectives aimed at taking a baseline of current mobile assets and usage, followed by the consolidation and streamlining of purchasing, invoicing, and asset management.

Top trends in federal mobile computing include resolving security issues, expanding mobile applications, and leveraging enterprise-wide contracts.  Security concerns run the gamut from employee mobile device security training, to authentication, encryption and application vetting and management.  Application rationalization and the need for more self-serve citizen services are driving agencies to expand the roster of applications made available via mobile devices.  The flexibility of carrier reach, pooling, bundling, etc. has driven demand for enterprise-wide contracts, while driving costs efficiencies.  

Contractors targeting data center consolidation should focus on optimization, look to existing customers for opportunities, and take advantage of the variety of contract vehicles at your exposure to fulfill requirements.   Contractors looking to address the mobility market should work with agency customers to assess infrastructure readiness for mobile computing,

promote key security features of their offering, and develop mobile applications that are specifically designed for federal government challenges.

 

GovWin Recon - November 18, 2014

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Sequestration / Budget:

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Mobility:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Legislation:

State and Local:

AEC News:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

Forecasting Federal Cloud Computing, 2014-2019: The Market Keeps Growing

When assessing the state of federal cloud computing, Deltek’s Federal Industry Analysis team sees 7 major trends shaping cloud investments across most government agencies:

  • Data Governance/Management – Agencies lack policies and oversight processes to govern the hosting and use of their data in commercial cloud environments.
  • Security Concerns – There is a lack of consistency in agencies ensuring that commercial clouds are FISMA-compliant. Furthermore, FedRAMP certification is taking an average of 9 months, while receiving an agency authority to operate (ATO) takes only 4.
  • Investment Management – Agencies lack the tools and oversight processes necessary to manage their cloud investments, determine costs, and calculate ROI.
  • Shared Services – As part of evolving common operating environments, agencies are taking a hard look at the cloud as a solution for reaching shared services goals on both inter- and intra-agency levels.
  • Mission Complexity – Agencies with complex and classified missions are finding that different types of missions require different types of clouds solutions and configurations.
  • DOD Loosens the Reins – In an act anticipated to greatly increase cloud spending, acting DoD CIO Terry Halvorsen has revised DoD policy to allow the military departments to procure cloud solutions on their own vs. exclusively through the Defense Information Systems Agency.
  • NIST Charts Roadmap Forward – In October 2014, the National Institute of Standards and Technology released its long-awaited US Government Cloud Computing Roadmap, recommending standards that will impact agency cloud procurement.

Taking these drivers into consideration, Deltek forecasts the federal agency demand for vendor-provided cloud computing services will increase from $2.45 billion in FY 2014 to $6.5 billion in 2019 at a compound annual growth rate (CAGR) of 21%. (See chart below.)

 

Key Findings

FIA’s research reveals a number of important conclusions concerning how agencies are handling the transition to cloud solutions:

  • Cloud spending in the Civilian buyer segment continues to accelerate, but recent Inspector General audit findings have shown that Civilian agencies have been moving to the cloud more aggressively than has been reported and than they are prepared for.
  • Defense spending on and contract awards for cloud computing peaked in fiscal 2012. This spending has declined since the DoD CIO’s enterprise Cloud Computing Strategy was released.
  • Generally speaking, DoD spending on cloud has focused primarily on making defense systems cloud ready.
  • Investment in Platform-as-a-Service continues to significantly lag behind IaaS and SaaS.
  • Multiple award contracts and contract vehicles like Alliant continue to be the most popular methods of procuring cloud services.

All in all, the purchase of commercial cloud services by federal agency customers continues to evolve slowly, but surely. Nevertheless, several trends implying challenges with cloud adoption are expected to hamper rapid growth through fiscal 2016.  Come fiscal 2017, however, agency spending on cloud is expected to rise considerably.

Learn more of our perspective in our latest report: Federal Update: Cloud, Data Center, Big Data, and Mobility, 2014-2019.

Follow me on Twitter @govwinfiaalex.

 

GovWin Recon - November 17, 2014

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Health IT:

Mobility:

Transparency and Performance:

Waste, Fraud and Abuse:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Legislation:

State and Local:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

GovWin Recon - November 14, 2014

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

 

Headlines beginning with an * include quotes from Deltek analysts.

 

 

 

Federal IT:

 

 

Agency News:

 

 

Vendor News:

 

 

Cybersecurity:

 

 

Transparency and Performance:

 

 

Contracting / Acquisition:

 

 

Legislation:

 

 

AEC News:

 

 

 

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

 

GovWin Recon - November 13, 2014

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Federal IT:

Agency News:

Vendor News:

Cybersecurity:

Cloud Computing / Data Center Consolidation / Virtualization:

Transparency and Performance:

Defense / C4ISR / Embedded Technology:

Contracting / Acquisition:

Mergers and Acquisitions:

State and Local:

AEC News:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

2020 Census Continues to Hit Planning Hurdles

The Department of Commerce’s Census Bureau has big plans for the upcoming decennial census, aiming to turn over a new leaf around costs and sustainability. Progress over the last year, however, shows the effort is encountering many of the same old problems.

Background

The constitutionally mandated decennial census conducted by the Census Bureau determines the allocation of billions of dollars in federal funds to states and realigns the boundaries for Congressional districts. Since 1970, the cost of enumerating households has climbed from around $16 to around $98 in 2010. During that same time period, the mail response rate dropped from 78 percent to 63 percent. The 2010 census was the costliest in U.S. history, weighing in at $13 billion. Throughout its strategic plans and program documents, the Department of Commerce continues to reiterate its commitment to conducting the 2020 Census at lower costs per housing unit than the 2010 Census. The Government Accountability Office (GAO) found issues with managing, planning, and implementing IT solutions for both the 2000 and 2010 enumerations. These issues contributed to acquisition problems and cost overruns.

Planning Progress and Missteps

In September 2013, the GAO released a progress report on efforts to contain enumeration costs. The Census Bureau launched a number of cost-saving, modernization initiatives in advance of the 2020 Census. These efforts targeted changes like establishing enterprise standards and tools for IT management and reducing duplicative investments. The GAO found that the Census Bureau had made progress towards long-term planning, but the roadmap for the 2020 census still lacked milestones for decision and cost estimates. The study also determined that while the Census Bureau identified some cost saving approaches, the new implementation of these practices for the 2020 census carries operational risk. The Census Bureau estimates that it could save up to $2 billion by using administrative records in 2020 to decrease the need for door-to-door visits. In particular, using the internet to include a self-response option stands to improve response rate and lower costs by reducing the number of households visited by field staff.

Later in 2013, the GAO reported that the Census Bureau was not producing reliable schedules for the 2020 Research and Testing program and the Geographic Support System Initiative. These two programs as the most relevant to constructing the master address file for the 2020 census. In both cases, activities were omitted from the schedule, which could potentially lead to unforeseen delays. While many activities were linked sequentially, the schedules lacked the preceding and following activities. Thus, the schedules were not producing accurate dates, which would interfere with determining whether the work is on schedule.

In the spring of 2014, a review of the 2020 Decennial Census program found that the Census Bureau had made progress in researching and testing IT options, but several of the supporting projects lacked schedules and plans. The absence of this scheduling data raises uncertainty about whether the projects will be completed in time to support operational design planning slated for September 2015. Four of the six IT research and development projects did not have finalized schedules. As for the two projects that did have completed schedules? They were not estimated to be completed until after the September 2015 design decision date. The same review found inconsistencies with the risk assessments and mitigation plans for the associated IT options.

By the summer of 2014, the Department of Commerce’s Inspector General released an assessment of the Census Bureau’s mandatory budget cuts. The review determined that cost information inaccuracies made it impossible to determine the impact of budget reductions. Further, the OIG found that internal practices increased the risk of incorrect or fraudulent charges. Four recommendations were issued for improvements, all centering on processes and procedures for the programs oversight. In addition to agreeing to the recommendations, the Census Bureaus acknowledged the “deficiency in the completeness” of its documentation around budget estimates and financial decisions.

This fall, the Census Bureau’s efforts to identify data sources for addressing and mapping requirements were examined. Once again, inconsistencies were found in the research and planning processes. These gaps included failing to document cost and quality information for executed decisions related to use address and mapping data from state, local governments, other agencies, and a commercial vendor. Additionally, management approval for the data source decisions failed to be documented, which would present accountability and transparency issues for future sourcing decisions.

Going Forward

Census has just completed the research and testing phase of the program, which ran from FY 2012 to FY 2014. The nest phase runs from FY 2015 to FY 2018 and will incorporate operational development and systems testing. FY 2015 activities are expected to focus on supporting research and testing infrastructure. Projects slated for this fiscal year include automation, workload management, Bring Your Own Device (BYOD) incremental development and research, enumeration system reuse, geographic program planning, IT security as well as a virtual office computing environment. In October, the Census Bureau released a request for information (RFI) as part of its market research into source for the Integrated Communications Program. Responses were due by the end of the month, and as of mid-October no decision on an acquisition strategy had be made yet. The mandated execution of this program and its expanding use of IT to execute the 2020 Decennial Census and to establish a sustainable model for future enumeration provide a number of elements for contractors to watch. In addition to the potential business opportunities associated with the census, the convergence of technologies like mobile computing, cloud environments, and data analytics will be a practical test of government technology adoption.

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

 

GovWin Recon - November 12, 2014

GovWin Recon, produced by Deltek's Federal Industry Analysis (FIA) team, is designed to support awareness and understanding of the issues impacting the government and the contractors that serve it. Recon highlights key developments surrounding government technology, policy, budget and vendor activities.

Headlines beginning with an * include quotes from Deltek analysts.

Sequestration / Budget:

Federal IT:

Agency News:

Cybersecurity:

Big Data / Analytics:

Mobility:

Contracting / Acquisition:

State and Local:

AEC News:

GovWin Recon is Deltek's daily newsletter highlighting federal government contracting news and analysis from around the government contracting world. Get it delivered to your e-mail inbox, free!

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