How mature is the government contracting market?

A few months ago, I was preparing some course material to address corporate strategy in the government contracting space.  I wanted, as almost all business school professors do, to use a case study or two from any one of the famous business schools that produce them.

(EDITOR’S NOTE – This is the first in a three-part series on the future of the government contracting market. The series is based on a speech John Hillen, former CEO of Sotera Defense Solutions, delivered as part of the Brown & Brown distinguished lecture series at George Mason University’s School of Management. This first essay deals with the maturation of the GovCon market over the past 50 years.)

Out of tens of thousands of case studies, I could hardly find one done about a government contracting firm.  When I asked a former Harvard Business school professor why this was so, he offered that he doubted that many professors producing these case studies thought that government contracting was a “real” market.

The view is more widely held than one might suspect – even in the national capital region.  Many thoughtful members of Congress involved in acquisition policy, senior leaders in the executive branch, members of media, academia, and elsewhere that I’ve spoken with think that the GovCon market is really more of a political process than a “real” market characterized by competition, innovation, and transparency.  Their prevailing view is that if a GovCon firm can figure out the political process and play that game better than the next guy, they win the contract, right? One monolithic buyer served by a few cartels in a closed cottage industry, right?

Keep reading this article at: http://washingtontechnology.com/Articles/2014/05/20/Insights-Hillen-GovCon-maturity.aspx?m=2&Page=2&p=1

How one Navy contractor navigated Washington’s choppy waters

Raymond Lopez Jr. spent three decades in the Navy, starting out as a seaman apprentice and retiring with the rank of commander. When Lopez and his wife Carol started Engineering Services Network, a defense services company, in 1997, they built their business on Navy contracts, growing from a small start-up into a $38 million-a-year enterprise. Lopez felt like he had never really retired from the Navy.

But when the clouds of budget cuts gathered in Washington a few years ago, he realized it was time to move out of his comfort zone. The Crystal City company decided to diversify its business — a hot button word in defense contracting circles.

Back in 2004, ESN had worked on a $551,000 Air Force contract. Seven years later, when Lopez was looking to expand outside of Navy work, the connections established on that job helped the company win a crucial five-year, $38 million IT services contract with the Air Force.

The experience cemented Lopez’s decision to enter information technology. More than half of ESN’s business is still generated from providing engineering, operations and technical support services for the Navy, but federal IT jobs — managing tasks in cybersecurity and software development — now account for nearly 30 percent of its revenue. The company has worked with the Air Force, the Department of Veterans Affairs and the Department of Health and Human Services.

Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/how-one-navy-contractor-navigated-washingtons-choppy-waters/2014/05/30/4cc6d0e6-e5c9-11e3-a86b-362fd5443d19_story.html

Got an idea to improve IT contracting? The government wants to know

The federal government is looking for a few good ideas to improve how it does business with information technology contractors.

Using IdeaScale’s crowdsourcing platform, the Federal Chief Acquisition Officers and Federal Chief Information Officers councils are seeking an “open dialogue” to help the government “streamline, modernize and improve” the federal contracting process whether it’s through executive action or new laws. The deadline for participation – which is open to anyone – is May 5.

According to the council’s website, such steps could help “remove barriers and burdens for small and minority-owned businesses and new entrants with limited resources and expertise in federal contracting” as well as reduce costs and red tape for existing government contractors.

The government is seeking discussion and input in three specific areas in an effort to make existing rules and practices more efficient and less onerous

Keep reading this article at: http://www.fiercegovernmentit.com/story/got-idea-improve-it-contracting-government-wants-know/2014-04-28

 

Grants and missile defense hit hardest in DoD’s science and technology budget request

Overall funding for the Defense Department’s science and technology budget undergo about a $500 million reduction in the president’s fiscal 2015 budget proposal, with grants and missile defense bearing the brunt of the cut, says a DoD official.

About $200 million of the proposed budget reduction would come from cuts to grant programs nationwide, which equates to about 1,500 grants, said Alan Shaffer, acting assistant secretary of defense for research and engineering.

The department also took about $150 million out of its Missile Defense Agency Science and Technology program, said Shaffer during an April 8 hearing of the Senate Armed Services subcommittee on emerging threats and capabilities. The decision made sense because much of the technology has matured to a level where it could be moved to other parts of the department, he added.

Keep reading this article at: http://www.fiercegovernment.com/story/grants-missile-defense-hit-hardest-dod-st-budget-request/2014-04-17 

GTRI launches Trustmark website at identity ecosystem steering group meeting

The Georgia Tech Research Institute (GTRI) hosted the 7th plenary of the Identity Ecosystem Steering Group (IDESG) Jan. 14-16, 2014 in support of the National Strategy for Trusted Identities in Cyberspace (NSTIC).

During the event, GTRI launched a new website on the Trustmark technology at https://trustmark.gtri.gatech.edu/. A trustmark is a rigorously defined, machine-readable statement of compliance with a specific set of technical or business/policy rules. The use of trustmarks has been pioneered by GTRI and developed with funding from the National Strategy for Trusted Identities in Cyberspace (NSTIC), a White House initiative to work collaboratively with the private sector, advocacy groups and public-sector agencies to create an “identity ecosystem” in which technologies, policies and consensus-based standards support greater choice, trust, security and privacy with online transactions.

IDESG has been established as a new organization led by the private sector in conjunction with, but independent of the federal government.

In October, GTRI was awarded an NSTIC pilot project grant. Under the grant, GTRI will develop and demonstrate a trustmark framework that facilitates cost-effective scaling of interoperable trust across multiple communities of interest within the identity ecosystem and enhances privacy through transparency and third-party validation.

Trustmarks have the potential to enable wide-scale trust and interoperability within the identity ecosystem by helping to foster transparency and widespread operational convergence on the specific requirements for each dimension of interoperability, including communication protocols and profiles, cryptographic algorithms, business-level user attributes for access control and audit purposes and various levels of policy such as privacy policies and practices.

Trustmarks can also reduce the complexity of the identity ecosystem’s trust landscape, and turn what would otherwise be a collection of poorly interconnected “federated identity siloes” into a more cohesive trust environment. In addition, trustmarks can enhance privacy within the identity ecosystem by helping communities of interest define clear, concise and rigorous privacy rules that participating agencies must follow.

“The concept of trustmarks and a trustmark framework mean different things to different stakeholders,” said John Wandelt, principle investigator for the GTRI NSTIC trustmark pilot.  “The vision of identity ecosystem where trustmarks can be broadly re-used and trusted across several communities of interest to satisfy interoperability, privacy, security and trust needs will require transparency, collaboration and sufficient engineering rigor to concretely specify.”

The new website will facilitate a common understanding of trustmarks and a trustmark framework.  Artifacts resulting from the GTRI pilot project will be posted at this website along with blogs and other related information.

“The objective is to solicit comments from the IDESG, other NSTIC pilots, and the community at large while maintaining the integrity of our pilot schedule,” said Wandelt.

“Trustmarks and Trust Frameworks are a common theme across multiple pilots and discussions in the IDESG,” said Jeremy Grant, Senior Executive for the NSTIC Program Office.

“GTRI’s decision to provide visibility into their trustmark pilot artifacts and findings early on is a great example of the type of collaboration we are encouraging between NSTIC pilots and the IDESG,” said Grant.  “It should contribute to accelerating substantive discussion and progress in this important area.”

posted at: http://gtri.gatech.edu/casestudy/gtri-launches-trustmark-website-identity-ecosystemP

Tensions brew between government and contractors over intellectual property

Tensions are brewing in the defense contracting business over government efforts to secure rights to manufacturers’ intellectual property. The clash pits military buyers who want to break up suppliers’ monopolies against companies whose livelihood depends on keeping tight control over their designs.

With the Defense Department under pressure to slash costs as budgets shrink, officials are targeting weapons programs for potential savings. They are particularly keen on reducing the cost of weapons maintenance and production by opening up the market to new competitors.

To do that in a market that is dominated by single-source manufacturers, the Defense Department needs what is known as “rights in technical data.” When the Pentagon buys a weapon system, it retains unlimited rights to the data if the item was designed with government funds. But when a product is financed by a private company, the firm keeps full control of the intellectual property and the government is simply a buyer.

Except in limited circumstances, contracting officials cannot disclose a private company’s proprietary data outside the government.

As the Pentagon in recent decades has become more dependent on the private sector for high-tech equipment, it now realizes that many of the existing arrangements restrict the government from seeking competing bids for maintenance or production of that equipment unless the manufacturers grant data rights. For most suppliers, that equates to killing the goose that lays the golden eggs.

Keep reading this article at: http://www.nationaldefensemagazine.org/archive/2014/January/Pages/DoDClashesWithSuppliersOverDataRights.aspx 

Procurement reform is one of 3 tech trends predicted for 2014

[Note: This article was written by Steve Towns, executive editor of Governing magazine.]

Nobel Prize-winning physicist Niels Bohr famously said, “Prediction is very difficult, especially if it’s about the future.” I tend to agree with him, but as we enter the New Year there are three interrelated technology issues that we can’t ignore. They’ll demand more attention from state and local leaders in 2014.

1. Data Analytics – Governments are great at collecting information, but they often do a lousy job of using it effectively.

2. Civic Innovation – While governments are struggling to get a handle on analytics, many have done a good job of opening data for public consumption.

3. Procurement Reform – One of the biggest barriers to harnessing the growing momentum around civic technology is government procurement.

Keep reading this article at: http://www.governing.com/columns/tech-talk/gov-government-technology-trends-to-watch-in-2014.html

Reflections of a small IT contractor on the government shutdown of 2013 and 2014’s uncertainties

[Note: This article was written by Terry Verigan, vice president of CompuCure.] 

Hurricane Katrina nearly killed CompuCure. In the wake of the storm, just three of us remained by Oct. 1, 2005, and the weeks ahead promised to be grim for our New Orleans-based IT services firm — what was left of it anyway. But we weren’t going to let that damn storm chase us away from our city.

By September 2013, eight long years after Katrina wiped out so many lives and businesses, CompuCure had rebounded sufficiently to make Inc. Magazine’s list of the fastest growing businesses in America. With a talented staff of 30 delivering projects that had achieved national recognition for quality and value, it was tempting to think we’d made it to some sort of safe high ground, economically speaking. But by late September, our president and owner, Angelina Parker, faced another storm, this one political. The federal shutdown nearly took down the business again.

While we had become accustomed to the disruptions that stemmed from continuing resolutions — the stop-gap budgets lawmakers typically adopted while they continued to disagree over larger spending questions — those rarely impacted our work at federal sites. Employees would clock in while budgets were frozen and eventually CompuCure would be reimbursed. Our line of credit was more than sufficient to carry on. Interest charges eat away at profitability, but we could keep going, knowing that our people and their families felt secure. Our most valuable resources, our employees, would still be on the job.

But the shutdown was different. It meant lost revenue to CompuCure, not just a delay in getting invoices paid. Disturbing questions emerged, notably: How would we keep our talented employees from moving to other companies less dependent on federal contracts?

Keep reading this article at: http://www.nextgov.com/cio-briefing/2013/12/reflections-2013-year-nearly-killed-one-small-federal-it-firm/76097/?oref=nextgov_cio_briefing

DoD acquisition heroes during Iraq, Afghanistan? Small biz, universities and DARPA

You didn’t hear much about them during the wars in Iraq and Afghanistan but DARPA, small businesses, and universities were the people who most impressed retired Gen. Hoss Cartwright when he was vice chairman of the Joint Chiefs of Staff, as he and the services scrambled to find weapons to give American troops a combat edge.

“DARPA was incredible to our ability to gain advantage. Small businesses and universities were hotbeds of innovation for us,”  Cartwright said during a panel at the Center for Strategic and International Studies on lessons learned from the last dozen years of war. He made no mention of Lockheed Martin, Boeing, or BAE Systems — or any of the other large defense companies.

What made them special? “Their willingness to take risks… made a huge difference and saved countless lives on the battlefield,” Cartwright said. And he said that in Afghanistan and (previously) Iraq, “[the] battlefield is not driven by platforms” — tanks, ships, planes — which take so long to design, build, and deploy.

Another avenue of innovation at the Pentagon sprang from the acquisition processes of Special Operations Command (SOCOM), which has the right to just buy things in small quantities if it really needs them.

Keep reading this article at: http://breakingdefense.com/2013/11/dod-acquisition-heroes-during-iraq-afghanistan-small-biz-and-darpa/

Second round of solicitations added to simplified federal contracting site

A new crop of solicitations has been posted in the past few weeks to the government’s startup website for simplified government contracting RFP-EZ.

There were 15 solicitations on RFP-EZ Monday afternoon, including one for a new mobile application to help the U.S. Marine Corps communicate with marines and recruits and one for a new health promotion Web tool for the Health and Human Services Department.

That’s more than double the six solicitations posted to the site early this year in a first-round beta test.

Keep reading this article at: http://www.nextgov.com/emerging-tech/2013/09/new-solicitations-added-simplified-federal-contracting-site/70108/?oref=nextgov_today_nl