MA

FY 2015 Net New Army IT Funding Less than $200 Million

Published: April 16, 2014

ARMYBudgetDEFENSEForecasts and Spending

Times are tough for vendors that provide IT products and services to the U.S. Army. For nearly a decade, the Army received billions of dollars in budgetary resources and it spent a generous portion of that funding on IT. Those days are over, requiring that vendors hold on tightly to current customers and scrap hard for new ones.

Times are tough for vendors that provide IT products and services to the U.S. Army.  For nearly a decade, the Army received billions of dollars in budgetary resources and it spent a generous portion of that funding on IT.  Following the drawdown in Afghanistan and the onset of sequestration the Army’s budget began to roll over.  Now it’s downright difficult to locate new program funding in the Army’s IT budget.

This difficulty is illustrated clearly in the DoD’s funding request for fiscal 2015.  The Army’s portion of the request shows a total of only $195 million in net new funding, with “net new” defined as development funding slated in FY 2015 for programs that received $0 in FY 2014.  The table below shows the programs for which funding has been requested.  The list is short, indeed.

Of these programs, the largest is the second increment of IPPS-A, the Army’s new integrated Enterprise Resource Planning system for personnel and pay.  Those familiar with the effort know that the contract competition for IPPS-A, Increment 2 is currently in source selection, so funding requested for FY 2015 will go to the winner of the contract.  This leaves only $24 million in remaining new development funding to potentially compete for in FY 2015.  I use the phrase “potentially compete for” because it’s unclear at this point if these are programs for which new contracts will be competed.

For example, Army Processing Centers are computing hubs located in DoD facilities where IT applications are stored, executed, replicated, and managed.  Work at these centers is procured, but more often than not the competitions take the form of task orders under contract vehicles held by a select number of primes, leaving the rest out in the cold.  That the Army will continue to use task order competitions to fulfill this requirement is not guaranteed.  Given the history, however, chances are high that they will.

As for the remaining investments …

Commercial-Off-The-Shelf (COTS) tactical radios offer the possibility of generating some revenue for vendors that supply the Army with these devices.

The Petroleum Quality Analysis System, developed by the Joint Manufacturing and Technology Center (JMTC) at the Army’s Rock Island Arsenal, sounds promising.  Funding in FY 2015 will buy one system and the Army intends to procure a total of 17 systems through FY 2019.  No notice of a pending acquisition could be found for this post, but it looks like there was some activity on Federal Business Opportunities in 2008-2009 related to earlier versions of the PQAS so it might be worth calling around ACC-Warren to find out if work will be required.

Funding for the Software Engineering Center’s C2 Solutions Directorate is probably for operations not necessarily related to contractor support, or for support contracts that already exist, so possibilities are limited here.

Lastly, work related to the third version of the Corporate Account Management System appears to offer some potential.  Unfortunately, I was unable to identify where this work would be done, so there are no leads on where to search for it.  Hopefully the better connected of you folks out there will have more success than I did.

Recommendations

Over the last two years, the Army’s Development, Modernization, and Enhancement (DME) funding has decreased by more than $1.5 billion.  Declines like this leave few contract dollars to compete for.  What I’ve seen in the FY 2015 DoD budget request suggests the following recommendations.

First, the Army’s overall FY 2015 DME budget totals $3.1 billion.  As the analysis above shows, only 6% of this is net new funding, meaning that the other 94% is going to established programs.  Translation – it’s more important than ever to know your customers, both potential and current.  You will want to know potential customers to develop new business by anticipating requirements, knowing how to improve current systems, and how to offer the savings and efficiencies they want.  Current customers you will want to hold close because there are plenty of competitors out there ready, willing, and able to eat your lunch.  Defensive tactics are best in this environment, meaning service and products suppliers should be responsive, accommodating, and helpful to existing customers.  They will expect this from you and this is no time for complacency.

Second, a lot of funding across the Army and DoD in general is going to operations and maintenance of systems.  This being the case, there is new spending under O&M budgets that does not fall in the DME category.  This translates into a need to investigate programs/projects funded under O&M to determine where they are investing in.  As usual, these programs come with incumbents, so be prepared to compete for work someone else is doing.