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KRT Impact Blog

Budget Dive FY2015: Treasury

With the release of the FY 2015 Federal budget and additional resources by the Government, KRT Associates is going to be taking a look into different agencies to see what the main considerations from the budget are and where are the potential business opportunities. We will also be doing a holistic review of the budget as more budget documents are released over the last month so keep your eyes peeled for that, in the meantime take a look at our previous IT budget review from FY2014.

What is the Department of the Treasury?

According to the Department of the Treasury, their mission statement is: Maintain a strong economy and  create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the financial system, and manage the U.S. Government’s finances and resources effectively.”

The Department of the Treasury is made up of several different bureaus with a relatively diverse mission area and even includes a member in the Intelligence Community that is focused on stemming the flow of funding to terrorist groups.

The larger components of the Department include:

The FY2015 Budget and what it means for the Department of the Treasury

The Department of Treasury is typically one of the larger Federal Civilian agencies from a budgetary standpoint and the FY2015 budget looks to provide treasury with a significant increase in the size of their overall budget.

The funding highlights from the Treasury FY2015 budget include:

For many Treasury contractors that have been struggling with sequestration level funding – the FY2015  budget should allow programs that had been delayed or derailed due to funding issues to get back on track.

Treasury’s Information Technology Budget

The overall Treasury IT budget will increase 13.4% from Fiscal Year 2014 to Fiscal Year 2015 from $3.5B to approximately $3.97B. Similarly to the overall Treasury Budget the Internal Revenue Service gets the lion’s share of Treasury’s IT budget. Most the IT budget at Treasury is dedicated to two major areas:

Along with these big ticket items at Treasury – Security Management, Collaboration Tools and IT Strategy and Innovation all received an increase of over 50% in funding from FY 2014.

What does this mean?

The good news all around is that there is an actual budget to work with at the Department of the Treasury. Most of the budgetary allocation is going to the IRS but that doesn’t mean there won’t be opportunities for business at the other Treasury bureaus and offices. With an actual allocation of funds the bureaus can actually plan for next the fiscal year and as contractors we should be hearing the statement, “we are trying to find funding” less often.

This budget however doesn’t mean we are returning to the 2000s heyday of IT spending, the Department is still very interested in efficient and cost-effective solutions – consolidation, cloud migrations and shared services are still very important buzz words and worth remembering. Focus on providing solutions that enable core bureau and agency mission and have strong cost and program management oversight. I have provided a few high-level areas that are getting increases in funding that are important to look at but these are not the sole areas worth a look at Treasury.

If you have any interest in Cloud computing, specific IT programs, or investment areas at the Department of the Treasury – there is a lot more cool data and information released with the budgets that we can detail and provide insights into. Stay tuned for our next Agency budget dive – up next the General Services Administration!

Feel free to reach out to us with any questions about the data or analysis in this blog.  Reach out to us via emailLinkedinFacebook, or Twitter!

GSA’s Networx:Telecommunications Update

The General Services Administration established the Networx Contracts as the follow on to the FTS 2001 contract ( awarded during 1998/1999) to provide Government users with up-to-date telecommunication services. Now what is the importance of these GSA contracts? They provide most of the core telecommunications services for the Government and just as important they are providing a way for cost-reductions in telecommunications costs and an opportunity to modernize many Government agencies telecommunications infrastructure.

Background on the Contracts

 

The FTS 2001 contracts were bridged until the networx contracts were up and running. These contracts were awarded in 2007 and embraced a new structure by creating a parallel set of contracts: Networx Enterprise and Networx Universal.

 

GAO Findings:

Like with many Government contracts and modernizations initiatives Networx hasn’t been without it’s hiccups and what drove me to drive this blog was a recent GAO report on the Networx transition. The report titled “GSA Needs to Share and Prioritize Lessons Learned to Avoid Future Transition Delays” from December 2013 had some of the following findings:

- Given the annual $1.3B in telecommunications services the Federal government invests in telecommunications services – GSA has an important role to play in acquiring these services in an efficient cost effective manner
- There has been a decline in telecommunications expertise at the Agencies and a weakness in project planning that has led to delays in transition to Networx
- Providing agencies with additional guidance on on transition project planning could help ensure that the next telecommunications transition proceeds more smoothly

Where do the Vendors stand?

As with all of my blogs I like to look at the spending data to see where the vendors and the agencies stand on Networx. Note there are some big discrepancies between what GSA states has been spent through Networx and the actual data reported through the Federal Procurement Data System – however we can still get some trending on which vendors have been successfully been utilizing their Networx contracts to grow their business with the Government.

Spending on Networx Universal

Spending on Networx Enterprise

According to the reported spending data we can see that it appears that AT&T has been successful at driving business through Networx Universal, while Verizon has had a lot of success driving business through Networx Enterprise.

Lessons/Conclusions

The competition for the follow on to Networx (Network Service 2020 – NS2020) should be starting up in the next few years and now may not be a bad time to start planning to be a part of the next big telecommunications modernization initiatives for the Government.

- If you are interested in providing telecommunications services and have some innovative solutions you may want to start building relationships with the Networx providers if you haven’t done so yet

- There may be opportunities to work with Agencies to help transition their telecommunications services – these are ongoing requirements that will require strong project management and transition support

Additional resources:

Feel free to reach out to us with any questions about the data or analysis in this blog.  Let us know if you want us to research any contracts or agencies in particular. Reach out to us via emailLinkedinFacebook, or Twitter!

Contract Vehicle Snapshot: VA T4

The Government shutdown is the centerpiece of the current Federal news cycle, but I figured we could all use a break from the political uncertainty. The market researcher and data nerd in me thought what a better way to be distracted than to dive into a multi-billion dollar information technology contract vehicle!

One of the more interesting, anticipated, and lucrative IT contract vehicles launched recently has been the Department of Veterans Affairs (VA) Transformation Twenty-One Total Technology (T4) Program. The T4 acquisition resulted  in contracts to 15 companies during June, 2011 for a ceiling value of $12 billion. 

Usually when one of these larger contract vehicles is issued, the biggest question is if the contract is being used and who is winning money on the contract. So let’s take a look at the spending.

Spending by Fiscal Year and Fiscal Quarter

Currently, according to the Federal Procurement Data System (FPDS) T4 has over $1.5B in reported spending to date. The chart below outlines the reported spending per fiscal year with all figures in dollars.

There is still more FY2013 spending to be reported, but we can see even without a full accounting of FY2013 – VA spent over $800M during the last fiscal year. And interestingly there has already been over $100M of spending for FY2014.

The data becomes a little bit more interesting when we break it out by quarter.

Q4 is usually a heavy spending quarter but you can see the clear jump in spending from Q4 in FY 2012 to Q4 in FY2013. The Department of Veterans Affairs is definitely driving more and more IT spending through this contract.

The Vendors of T4

From a vendor perspective, who is winning the IT work going through this contract vehicle?

Systems Made Simple has currently received the largest share of T4 obligated dollars with over $450M. This is over $200M more than Harris who is the 2nd largest T4 contractor.

Concluding Thoughts

T4 is increasingly a major vehicle for IT projects at the Department of Veterans Affairs. If the current trends continue we should see at least a billion dollars of spending go through T4 for FY2014. The VA contracting office has already moved forward with an onramp procurement for a new SDVOSB – an onramp enables the Government to add new vendors to a contract vehicle after the initial contract awards.

Despite the current political and budgetary environment the Department of Veterans Affairs is an agency that should get adequate financial support with the increasing focus on caring for our nation’s veterans. For IT vendors that are looking to work with VA, make sure you understand the role T4 plays in acquisitions when you are developing your business development strategy.

Feel free to reach out to us with any questions about the data or analysis in this blog. To learn more about the Department of Veterans Affairs, the T4 contract vehicle, or if you are interested in meeting some great small IT contractors! Reach out to us via emailLinkedinFacebook, or Twitter!

Evolution of Contract Vehicles: SEWP

With the Request for Proposal for NASA’s Solutions for Enterprise-Wide Procurement V (SEWP) contract right around the corner (anticipated to be released on or about August 12th). I thought now would be an interesting time to take a quick look at the SEWP IV predecessor contract. What are some take aways from the previous contract that we can apply when looking at the upcoming SEWP V contract?

 

Analyzing the trending around the SEWP IV contract was part of my responsibilities during my time as the Senior Analyst, Civilian Federal Research at INPUT and it’s interesting to see how the contract has grown to be one of the most widely used IT product and product solution contracts in Federal IT sector. This successful track record even goes back to February, 2009 when I was interviewed by Fed Tech Magazine about the SEWP IV contract. This article has some additional pertinent recommendations about the SEWP contract.

With that let’s jump in and take a look at the data behind SEWP IV!

Spending by Fiscal Year

Currently according to the Federal Procurement Data System (FPDS) SEWP IV has over $10Billion in reported spending to date. The chart below outlines the reported spending per fiscal year with all figures in dollars. 

 

 

 

SEWP IV spending by fiscal year

The Vendors of SEWP IV

What we can see from an analysis of the 38 competed contracts is that there is a huge discrepancy between how successful Vendors have been at utilizing this contract. The chart below displays all of the vendors who broke over $100M in reported spending on SEWP IV as of today.

Spending by SEWP IV Vendors

Additional stats:

SEWP IV Agency Footprint

One of the hallmarks of SEWP IV has been the ability of the contract to be very widely used across the Government. Though there are several contracts that are like SEWP IV designated to be Government-Wide Acquisition Contracts (GWACs), unless they are managed by GSA’s Federal Acquisition Service they tend to be heavily utilized by the Agency that sets up the contract (in this case NASA). This is not true for SEWP IV. The chart below shows the Agencies that had over $100M in spending with the SEWP IV contract.

SEWP IV Spending by Agency

Thoughts and Recommendations

Given the long successful track record of SEWP IV, as an IT vendor in the Federal space the upcoming SEWP V Contract cannot be ignored. When looking at the SEWP V contract keep these thoughts and recommendations in mind:

1. Pick the right partner on SEWP – there is a huge difference between the vendors who managed to leverage SEWP IV effectively and those who didn’t make sure take careful consideration  about your teaming strategy for SEWP V

2. SEWP IV has been a favored contract among the VA, DOD and other agencies – you could utilize SEWP IV to drive business by offering a trusted easy to use contract for your customers in those agencies

Additional Resources:

If you want further details around our SEWP IV analysis feel free to contact us at contact@krt-associates.com

Do you have any thoughts or concerns around SEWP V or any other upcoming major IT contract vehicles? What are you looking for a in a teaming partner? As always we would love to hear your thoughts! Reach out to us via email, Linkedin, Facebook, or Twitter!

Federal IT Budget Snapshot

The President’s FY2014 budget was released on April 10th. Though there are still many steps left before the budget passes through congress – it is nice to get some ideas around what are the Administration’s major priorities are. I am still running through the overall President’s budget and may share additional findings in a later blog. For this blog I am focusing on a smaller piece of the overall Federal budget – the IT budget. I spent the last week running through some of the data and had a great opportunity to receive further insights on budget priorities when I attended the Federal IT Budget Preview hosted by AFCEA Bethesda last Friday.

The keynote speaker was Steven Van Roekel the CIO for the United States and also included a great panel of senior executives the Office of Management and Budget (OMB), the Department of Homeland Security (DHS), the Department of Health and Human Services (HHS) and the Department of Agriculture (USDA).

If we dive into the keynote delivered by Steven Van Roekel the main Federal Technology Objectives are:

The full presentation is available here.

Some of the interesting things I noticed is that throughout the 2000s IT spending in the United States expanded at a high rate – the CAGR (Compound Annual Growth Rate) of the IT Budget stood at 7.09% in FY2009. If that rate had remained steady the IT budget for the Fiscal year of FY2014 would have been approximately $111B instead – instead of that the CAGR has remained relatively flat at 0.78%. The result is the expected FY2014 budget is only approximately $81B.

The theme for the IT budget that was echoed repeatedly is doing more with less. There are many initiatives throughout the Federal Agencies to focus on cost-savings and cost avoidance measures – and then channeling that money as investment dollars to improve the effectiveness and efficiency of IT programs.

O&M vs. DME

One of the concerns highlighted at the breakfast was the growth of the operations and maintenance costs in IT programs vs. the investment portion also known as Development, Modernization, and Enhancement (DME). The Government executives present stated that the balance of O&M to DME was unsustainable and they needed solutions in the future that would enable them to invest in Information technology while keeping the O&M portion under control.

 

Overall IT Investments

If we take a closer look at how agencies are investing their IT dollars – there are 3 broad categories with the dominant one being Agency Investments. The categories are outlined below:

Spending in Cloud Computing?

One of the buzzwords in Federal IT for the last few years has been cloud computing. This type of investment has been one of the most talked about and the hardest to analyze from a dollar perspective. This is because the traditional spending categorization systems of NAICS and the Federal Supply Groups don’t show any visibility into cloud computing.  Fortunately the Federal Government is exposing this spending through the FY2014 budget – the table below illustrates cloud spending as the Federal Government defines it.

 

Conclusions

Overall the Federal Government has a lot of budget challenges for FY2014 and they will strive to do more with less. The positive here is that there should be plenty of opportunities for companies that can provide innovative solutions and can help the Federal Government find those lucrative investment dollars through cost savings and cost avoidance!

If you have any questions or comments regarding our data or findings – we would love to hear from you! Please reach out to us at contact@krt-associates.com

Agency Highlight: USAID

 The Administrator for the United States Agency for International Development (USAID) Rajiv Shah, released his Annual Letter on March 19th. This report details some really great examples of USAID projects that are bringing meaningful changes in people’s lives throughout the world and I would recommend taking a look at the full report.   

Logo for USAID

Given the recent release of the letter, and the upcoming release of the President’s Budget – I thought now would be a great time to take a quick dive into one of the Agencies that I have always followed closely, and perhaps convince some organizations to take a look at doing some work with the Agency.

As a starting point the Agency for International Development is really one of the three pillars of US foreign policy (the other two being Defense and State). However, with the current economic and budget environment in the United States – I am concerned that we may turn more inward and diminish both our funding and our efforts on the international development stage. As someone who has always had a great interest in international development, and believed strongly in the good works that the United States does throughout the world – I’m hopeful that USAID gets the funding they need to continue their work.

Looking at the past US Federal budget we can see that USAID’s Budget Authority is relatively small (approx. $5-$6B a year), especially compared to many of the other US Federal Agencies. (If interested in more detailed budget information or how we arrived at our numbers please feel free to contact us). However the impact of that funding is quite extraordinary, especially in some of the most impoverished regions of the world.

Budget for USAID from FY2009 to FY 203

USAID’s focus areas include:

  • Agriculture and Food Security
  • Democracy, Human Rights, and Governance
  • Economic Growth and Trade
  • Education
  • Environment and Global Climate Change
  • Gender Equality and Women’s Empowerment
  • Global Health
  • Science Technology and Innovation
  • Water and Sanitation
  • Working in Crises and Conflict

One of the overlooked cases (in my mind) of an amazing USAID success story is the United States President’s Emergency Plan for AIDS Relief (PEPFAR) – which I am sure most Americans are unaware of. This program has been running since 2003 and has delivered amazing results in bringing down the infection rate and death rate from AIDS – especially in Sub-Saharan Africa.  

Between 2004 and 2007, the difference in the annual change in the number of HIV-related deaths was 10.5% lower in the focus countries than in the control countries (P = 0.001). The difference in trends between the groups before 2003 was not significant.” Annals of Internal Medicine – May, 2009

Where does the Funding Go?

The follow list highlights the biggest recipients of assistance from USAID in Fiscal Year 2012 – and while the funding does lean heavily toward Afghanistan and Pakistan; there is also significant funding that targets countries in Africa and other regions of Asia.

Top 20 Country’s Receiving USAID Assistance for FY2012

Top country recipients from USAID 2012

Doing Business with USAID

If you are looking for a US Federal Agency to work with – and one where you are supporting or executing some incredible programs and projects that can really impact and change lives. I would recommend taking a look at USAID – they have a great history of working with many contractors including small businesses (make sure you reach out to their Office of Small and Disadvantaged Business Utilization).

Keep an eye out for USAID’s Vendor outreach sessions, which are held throughout the year. However, be aware that due to sequestration a lot of Agencies have been cancelling or postponing their industry outreach sessions – so it pays to be proactive!

Are there are any Agencies that you have a great experience working with? And are there any pros or cons that come from working with Large vs. Smaller Federal Agencies? Feel free to reach out to us with any comments or questions at contact@krt-associates.com !

Differentiation and Standing out in a Crowd

Regardless of what industry you are in – one of the truths of business is that you are going to face competition. Today the barrier for entry in many sectors is quite low, and it is almost a certainty the amount and level of competition is going to steadily increase over time. In many sectors this factor has led to a lot of firms offering similar services and products that all target the same customer base. 

In this type of environment where an industry or sector has little natural differentiation in products or services – how can an organization stand out from the crowd and the competition? This environment I have described is also applicable to the Federal Information Technology sector where I have worked closely with many small to large contractors over the years.

I am going to share some tactics/thoughts that you can incorporate into your business strategies (Federal or not) that will help your firm stand out effectively from the crowd – and I am going to avoid the obvious utilization of price as a differentiator.

1. Don’t be a Me-Too!

There are literally hundreds of IT contractors trying to displace an incumbent vendor or convince a potential teaming partner to work with them. Offering the same services as your competition may not be enough to win in this situation – so what can you do?

Take time to figure out what are your unique strengths!

Your company may have some unique strength that you have never realized – maybe you have a software development team that has done some great and unique enterprise implementations, or perhaps experience in a next generation technology that the general marketplace hasn’t adopted yet. Take a step back and look at what you have done and what you can talk about proudly to set you apart!

If you take a look at your firm and you really can’t find something that differentiates you from a core business perspective (technology or otherwise) – think about investing in people with unique skills or unique technologies that fits within the strategic direction of your firm

2. Invest time to get to know people in your market

Another way to build differentiation is to make yourself a known quantity in your market. Tactics you can utilize to build your brand and brand recognition in your market include:

The idea behind this tactic is a very basic premise: if people are looking for services in your industry or market and there are many vendors that provide the same services. Typically people like working with a known quantity in these scenarios versus an organization they have no contact with or no concept of. If you have taken the time to meet the right people and decision makers, and get your brand awareness in your market – you will be that known quantity!

3. Get to know your Customer

An important factor in differentiation is actually taking the time to understand your customer. This can take both a strategic and a tactical approach.

Take time to define the market sector that you are going to cater to and then what factors are really important to that group. On a strategic level, rather than trying to compete for all of the business out there – take time to really go after a specific group of clients and build an understanding of what is important to them. By doing this you will be able to create a great market niche for your firm. As an example you could decide to cater to Non-Governmental Organizations and take time to build business with them and also build out solutions that take into consideration what factors are important to those types of organizations.

On a tactical level when you are getting ready to go after a specific customer or client – take the time to learn about what is really important to them. One of the constants I have heard over the years from many senior executives is that they don’t fundamentally care about the widget you are selling or how cutting edge it is. What really matters to them is how can your product or service better help them achieve their mission objectives. By focusing on the customer’s mission needs you will make an impression that most of your competition will not be able to match.

In Conclusion

I know much of what I stated above will be obvious to many people, but I wanted to put it down in writing because I have rarely run into firms that effectively utilize all of the tactics I shared above.

In an increasingly competitive market, I really believe it is important to do whatever you can to stand out from the crowd. The tactics/thoughts I shared are relatively low investments for many firms that will lead to great results!

Do you agree or not? We would love to hear your feedback please contact us!

Security vulnerability for GSA’s SAM Reported

The General Services Administration (GSA) released a letter warning about security vulnerability in their system System for Award Management (SAM) last Friday. Users with administrator rights for their organizations on SAM may want to go to GSA’s SAM security FAQ: http://www.gsa.gov/portal/content/167851

Handling security issues is always a delicate issue when balancing security and the perception of a new initiative, and I applaud GSA for being proactive in reaching out to their end users. 

The full content of the letter is available at the bottom of this post.

What is SAM?

 SAM is a portal/initiative where GSA will be consolidating many of the existing Federal acquisition and award management systems and sites into one unified platform. This PDF provides a great overview of exactly what sites will be consolidated into the system and a rough timeline for consolidation as well. Eventually most of the popular acquisition sites covering everything from Federal contracts to grants will be housed in SAM.

Sites/Systems that will be consolidated in the future include:

IBM won the prime contract for this effort under contract for Architecture and Operations Support Contract (GS-00I-10-AA-C-0046)  awarded on February 3, 2010 by GSA for $74,441,281.04. The period of performance on this contract is 8 years (Three-year base period and five one-year option periods). According to FPDS approximately $31M has been executed against this contract to date.

So far SAM has taken over the functionality for several systems so far including the Central Contractor Registration (CCR) – which as the name indicates is where most contractors house their core business information so they can do business with the Government. The above security alert primarily pertains to the CCR type of data.

SAM like any new large system or consolidation effort has had some issues during its implementation, some which are highlighted in the news articles below:

The idea for consolidation in the many disconnected acquisition systems is one that just makes sense, especially if you have spent time over the years trying to navigate many of these systems trying to find some strands of commonality when conducting research into a Program or trying to support business development or capture efforts. I hope GSA and IBM manage to overcome the other obstacles an effort of this scale is going to have, and we all benefit from having one unnecessary system of silos in the acquisition space.

Content of the Letter:

“Dear SAM user

 The General Services Administration (GSA) recently has identified a security vulnerability in the System for Award Management (SAM), which is part of the cross-government Integrated Award Environment (IAE) managed by GSA.  Registered SAM users with entity administrator rights and delegated entity registration rights had the ability to view any entity’s registration information, including both public and non-public data at all sensitivity levels.

Immediately after the vulnerability was identified, GSA implemented a software patch to close this exposure.  As a precaution, GSA is taking proactive steps to protect and inform SAM users.

 The data contained identifying information including names, taxpayer identification numbers (TINs), marketing partner information numbers and bank account information. As a result, information identifiable with your entity registered in SAM was potentially viewable to others.

 Registrants using their social security numbers instead of a TIN for purposes of doing business with the federal government may be at greater risk for potential identity theft. These registrants will receive a separate email communication regarding credit monitoring resources available to them at no charge.

 In the meantime, we wanted you to be aware of certain steps that all SAM users may want to take to protect against identity theft and financial loss. Specific information is available at www.gsa.gov/samsecurity.  If you would like additional background or have questions, you may call 1-800-FED-INFO (1-800-333-4636), from 8 a.m. to 8 p.m. (ET), Monday-Friday starting Monday, March 18. We recommend that you monitor your bank accounts and notify your financial institution immediately if you find any discrepancies.

 We apologize for any inconvenience or concern this situation may cause. We believe it is important for you to be fully informed of any potential risk resulting from this situation. The security of your information is a critical priority to this agency and we are working to ensure the system remains secure. We will keep you apprised of any further developments.

 Sincerely,

 Amanda Fredriksen

Acting Assistant Commissioner

Integrated Award Environment

 

Evolution of Contract Vehicles in Federal IT: TIPSS

One of the “truths” in Federal IT contracting is the increasing importance of multiple award contracting vehicles. The usage and prominence of contracting vehicles as a preferred method for buying information technology solutions, whether it is hardware or software, has been increasing year after year. Now that several generations of evolution have taken place for of thesecontracts, I thought it would be interesting compare them to their predecessors.

For this blog, I thought I would investigate one that I am intimately familiar with and see what has happened to the contract since it was awarded. I’m taking a look at the Internal Revenue Services’ (IRS) Total Information Processing Support Service-4 (TIPSS-4) contract. I was at the Pre-solicitation conference for TIPSS-4 in early 2009 and at the time, the contract was one of the “must-win” acquisitions for many vendors that wanted a significant role in the IRS’s IT efforts.  

TIPSS-4 was the follow-on contract to the highly utilized TIPSS-3 contract vehicle which, along with the IRS Prime contract (held by Computer Sciences Corporation), was the avenue that much of the IT work for the multi-billion dollar IRS Business Systems Modernization (BSM)  was procured through. It has been about a year and a half from the award date of TIPSS-4, and I was curious where the contract was today. Was it the windfall that many contractors had hoped for?

Quick overview of the two contract vehicles:

For comparison, below is the growth of TIPSS-3 since it was awarded (total spending on the contract was about $2.7B)

TIPSS-4 heavily increased its focus on ensuring contractor compliance with process-based methodologies such as the Earned Value Management System (EVMS) and the Capabilities Maturity Model Integration (CMMI) in regards to TIPSS-3.  So with a much higher ceiling, and a longer period of performance to its predecessor how much has the contract been used since it was a awarded a year and a half ago?

According to my research, since the contracts were awarded in January 2011 theTIPSS-4 ITS contract has reported spending of approximately $67M, which appears to be a major decline from the previous contracts burn rate. On a surface level this contract is not looking to be the major windfall that contractors were expecting.

Could the cause be a general slowdown in IT spending by the IRS? Is the IRS switching to different contracting options? (Examples include Unisys’s $139M IRS cloud service win through GSA’s Alliant contract – Source – Washington Technology: Unisys wins $139M IRS private cloud contract). Is there a slow-down in the IRS Business Modernization program that was a driver of much of the IRS’s previous IT spending? Are the TIPSS-4 small business contracts consuming a big chunk of the spending?

All of the above questions warrant much further investigation, but from a spending perspective one can say that the pattern of how IT is being bought at the IRS is in the process of shifting.

Notes:

For any questions or clarifications on any of the information provided, please contact us

If there is interest I will do a separate look at the TIPSS-4 Small business awards in that covers cyber security and Management Business Operation Support Services (MBOSS)

Contract spending data is sourced from the Federal Procurement Data System

Fiscal Year 2013: Reflections from Four Years Ago

It’s been about four years since the last presidential election during November, 2008. That time period like now was full of uncertainty for the Federal market. By September 2008, (the close of the 2008 Government Fiscal Year), major cracks were showing in the US economy and there were some uncertainties that was shadowing the start of FY2009:

Overall, it was a grim time for the American economy, and there was much uncertainty around the role of the Government and what all of these factors would mean for the Federal procurement community.

Now four years on as we prepare for another round of presidential elections and a new fiscal year, we have some interesting new and old realities to deal with:

What is Sequestration?

As a quick-aside Sequestration is a result of the Budget Control Act (BCA) of 2011 and sequestration put in place almost as a doomsday device for congress to agree to terms a $1.5 trillion in deficit reduction. Obviously this did not happen. The Center on Budget and Policy Priorities had good information that provides an overview of the impacts, and more details around sequestration: http://www.cbpp.org/cms/?fa=view&id=3635

“Broadly speaking, for 2013 the across-the-board cuts will mean about an 8.4 percent cut in most affected non-defense discretionary programs, a 7.5 percent cut in affected defense programs, an 8.0 percent cut in affected mandatory programs other than Medicare, and a 2.0 percent cut in Medicare provider payments.“

With the sluggish economy, upcoming election, and uncertainty around the impacts of sequestration, it is an interesting time to be a participant in the Federal acquisition market as both a buyer (Federal Agency) and a seller (Contractor).

In a series of follow up blogs throughout the month of October – we are going to explore some potential trends that we can watch out for in the Federal Market during FY2013.  I look forward to feedback on what you think the next few years will bring us in the federal acquisition world. Reach out to us at: contact@krt-associates.com