Cloud Contracting Trends at the Department of Agriculture

Cloud computing at the U.S. Department of Agriculture has been in the public eye a lot the past year due to the USDA’s status as a lighthouse agency for the IT modernization efforts led by General Service Administration’s Centers of Excellence. Phase I CoE Contract awards for Cloud Adoption (#47QFDA18F0016 made to SIE Consulting) and IT Infrastructure Optimization (#47QFDA18F0017 made to McKinsey & Company) in spring 2018 were quickly followed by a series of Phase II blanket purchase agreements for Infrastructure Optimization and Cloud Adoption made to Booz Allen Hamilton (#47QFDA18A0020), TechFlow (#47QFDA18A0021), Smartronix (#47QFDA18A0022), SAIC (#47QFDA18A0023), OM Group (#47QFDA18A0024), Accenture Federal Services (#47QFDA18A0025), Deloitte Consulting (#47QFDA18A0026), Ace Info Solutions (#47QFDA18A0027), TechTrend (#47QFDA18A0028), and T-Rex Solutions (#47QFDA18A0029) in autumn 2018. Accenture then booked another big win at the very beginning of fiscal 2019 – a $500M contract for USDA Enterprise-Scale FedRAMP Certified Cloud Hosting Services.

As we can see, there has been a lot of cloud contracting activity at the USDA (in cooperation with the GSA), but awards related to the CoE aren’t all that has been happening. The data below shows verifiable cloud spending at USDA and the total value of awarded cloud contracts since fiscal 2015.

Fiscal 2018 was a good year in terms of TCV, but it didn’t quite measure up to the total value of awards made in fiscal 2016. As is typically the case, one big award made the difference. In 2016 it was the $824M Cloud Hosting and Reporting for the Financial Management System Shared Service Provider contract made to CGI Federal that comprised the bulk of USDA’s contracting total. In 2018 it was the $500M award made to Accenture. This leaves a TCV balance of $115M in 2016 and $152M in 2018 attributable to other often smaller awards for cloud services. The largest of these awards in 2018 included a $41M contract captured by Redhawk IT Solutions for Adobe cloud licenses and support services and a $22M deal won by technology reseller Carahsoft for Salesforce License and Architect Support. The 8(a) business, Alethix, meanwhile, won a $16M contract for Enterprise Application Services Cloud Technology Application Configuration and Support Services. A total of 98 other contracts awards totaling $73M in value made up the balance of USDA’s cloud procurement in fiscal 2018.

Accurately determining Agriculture’s cloud spending presents another challenge altogether. In its FY 2018 budget request the USDA reported to the Office of Management and Budget that it intended to spend $127M on cloud computing in 2018. In its FY 2019 request USDA reported a revised fiscal 2018 figure of $55M. There has been some controversy about the FY 2018 numbers reported in the FY 2019 budget request because OMB made it optional for agencies to report cloud spending. USDA chose to report it and, surprisingly, the revised number of $55M ended up being not too far off of the $45M that Deltek has been able to verify.

In terms of cloud contract spending, therefore, USDA’s numbers are relatively stable from year to year. TCV, by contrast, can swing wildly from one year to the next, thanks typically to one very large contract award.