Georgia Tech Procurement Assistance Center

GSA chief pushes agency to up its acquisition game

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Since assuming her role as head of the General Services Administration earlier this year, Martha Johnson has fully embraced the agency’s information technology initiatives.

GSA’s revamped Office of Citizen Services and Innovative Technologies is playing a key role in the Obama administration’s open government initiative, helping federal agencies improve their public-facing websites and build social media capabilities.

The agency also has taken charge of the government’s migration to cloud-based mobile computing and is acting as a central source of information about software and infrastructure as a service capabilities. But as it gins up these programs, GSA also must continue to compete with individual agencies’ procurement vehicles for business.

Analysis by Reston, Va.-based research firm INPUT shows a decline in spending annually from fiscal 2006 to fiscal 2009 on GSA’s Schedule 70, on which technology products and services are sold. Industry observers point to agencies’ lack of trust in GSA to manage the acquisition processes critical to daily operations, a desire to retain individual control over contracts, and the momentum agencies have gained by running their own procurement shops for years as key factors in slow sales.

The Government Accountability Office in June reported that agencies use their own enterprisewide contracts to retain control over the procurement process and to avoid paying fees associated with other agencies’ contracts. This causes duplication of products and services, however, and lost opportunities to save money in the procurement process, the audit found.

Industry analysts say to boost business, GSA has to convince agencies that its contracts provide the best value and its procurement processes are more efficient and responsive than agencies’ own vehicles. Johnson has acknowledged that GSA has work to do to bring back customers, which she says it can accomplish by being more responsive to their needs and learning to leverage technology and collaborative tools to communicate and solve problems. “We could win more business, to put it baldly, if we step up our performance,” she said at a March technology conference and security expo in Washington. “If GSA ups its game, I am confident that GSA’s business will grow.”

The agency anticipates growth in its new $10 billion commercial satellite communications program, Future Comsatcom Services Acquisitions, that provides services to civilian and defense agencies. And it has exceeded $1 billion in task orders on its cloud-ready Alliant program, a $50 billion governmentwide contract that aims to be the largest and most comprehensive vehicle for procuring IT services to date. It also is upgrading customer-facing tools such as GSA Advantage with improved product descriptions, images and price comparison tools, and is rolling out training programs to help customers use Web tools and find answers in real time.

Another issue GSA faces is the transition to its massive Networx contract, which, valued at $68 billion over 10 years, is the largest government telecommunications contract in history. Agencies are expected to move to Networx by June 2011, when FTS 2001, the previous contract, expires. GSA says the transition is more than halfway complete, but federal officials, lawmakers and others blame delays on the complexity of the contract and the broad range of services offered.

Johnson also is pushing government to eliminate its environmental impact, a step she calls the “moon shot.” GSA’s sustainability agenda includes projects around data center consolidation, smart building technology and virtual workplaces.

As one of many suppliers of goods and services to the government, GSA must continue to make the case for its efficiency, responsiveness and value if it wants to win agencies’ trust and their business.

Click here for the top 25 GSA contractors

— by Emily Long – GovExec.com – September 1, 2010

Agencies bust myth of year-end buying sprees

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Some agency officials say they are following a well thought-out approach to spending what’s left in their fiscal-year information technology budgets — a game plan that defies the myth that departments rush to spend funds before they become unavailable after Sept. 30.

The phenomenon of the year-end spending sprees first came to light in 1980, when the Senate Governmental Affairs Subcommittee on Oversight of Government Management issued a report that found the hurry to obligate expiring funds before the end of the fiscal year often led to a lack of competition, inadequately negotiated contracts and the purchase of low-priority items.

In a 1998 follow-up to that study, the Government Accountability Office concluded agencies’ spending patterns were hard to assess because quarterly budget data, which could show a spike in fourth-quarter spending, was unreliable. Since then, federal auditors haven’t evaluated the issue much, and information on last-minute expenditures can be hard to obtain, according to some academic researchers.

Ramji Balakrishnan, an accounting professor at the University of Iowa who co-wrote a 2007 report on the subject, recently told Federal News Radio that he was able to access figures on year-end spending at U.S. Army hospitals largely because his co-author, a veteran, had contacts inside the military. According to the paper, which was published in the Journal of Management Accounting Research, administrators stockpiled supplies toward the end of a fiscal year, but then saved more money than they spent during the year-end splurge at the start of the next fiscal year.

A trend of precalculated buying seems to be occurring at several agencies with large IT budgets, including the General Services Administration and Veterans Affairs Administration, according to government officials.

In April, Administrator Martha Johnson directed GSA’s chief information officer, Casey Coleman, to complete five high-priority IT projects within 18 months — a feat that Coleman said the agency finished in 10 weeks. The agency’s IT budget for fiscal 2010 is $605.9 million. By quickly wrapping up the projects, which included boosting the capacity of GSA’s networks and adding remote private networks for teleworkers, Coleman was able to focus late-year spending on supplemental purchases for the agency’s increasingly mobile workforce, she said.

“By doing that we really set the foundation for IT modernization for the agency,” Coleman said in an interview with Nextgov. “Now we are in Phase 2 of our modernization program.”

Phase 2 involves purchasing green products. Johnson this summer challenged GSA to eliminate the federal government’s adverse effects on the environment, what’s known as creating “a zero environmental footprint.”

The agency plans to spend its IT money in September on products and services that support the zero e-emissions goal, Coleman said. GSA will invest in videoconferencing equipment; shared printing workstations to replace individual desktop printers, which are rarely used; and a cloud computing tool for e-mail, scheduling and other interoffice communications. Cloud computing is an arrangement that provides online access to hardware and software, eliminating the need to rely on energy-hungry, in-house data centers for IT services.

A contract for cloud services is expected to be awarded in October using fiscal 2010 money earmarked for spending in September.

GSA was unable to provide information on remaining money the agency returned to the treasury at the end of the last fiscal year.

The thinking is that GSA, as the nation’s biggest storefront, can expand the green IT market governmentwide — and perhaps nationwide — by purchasing environmentally responsible goods. Experimenting at the departmental level also might enable GSA to eventually offer governmentwide, eco-friendly IT contracting vehicles, agency officials said.

Veterans Affairs, which has a $3.3 billion IT budget, will spend its remaining fiscal 2011 funds on rolling out systems that can quickly exchange patient records via the Web, VA officials said. Such expenditures should increase access to health care, including mental health services, they added. September money also will support upgrades to benefits delivery systems and the department’s IT infrastructure.

At the end of fiscal 2009, Veterans Affairs let $462,000 in IT-related funding lapse, or become unavailable for new purchases.

In the past, officials at the Environmental Protection Agency spent all of their IT money by the end of the year, but only after careful planning, they said. Last year, EPA did not return any IT-related funding to the treasury. The agency’s enacted IT budget for fiscal 2010 is $465 million.

A significant portion of EPA’s technology infrastructure spending is managed under a business model that quantifies IT needs at the beginning of each fiscal year, officials said. “This process promotes spending that is thought-out and forecasted, and minimizes a potential end-of year spending surge,” EPA spokeswoman Latisha Petteway said.

— By Aliya Sternstein – NextGov.com – 08/26/2010

Social Security expects to award mega-IT contract by October

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The Social Security Administration expects to award by October a contract potentially worth more than $2 billion for information technology support during the next eight years, agency officials confirmed late Friday.

The huge purchase is an extension of an IT services contract currently held by Lockheed Martin Corp. that has reached its cap of $525 million. The scope of work for this follow-on will extend beyond the previous contract that was primarily for software development and maintenance to include health information technology as well as new management responsibilities. The award may be split between multiple companies.

In June, Social Security officials described the procurement as consisting of many technical areas, including application and business planning; systems administration for the operating systems z/OS, Unix, Windows and IBM WebSphere; and emerging technology applications, such as data mining, cloud computing and voice recognition.

The new contract also will continue the work being performed under SSA’s current agreement with Lockheed, the Agencywide Support Services Contract. That award, announced in November 2004, covers application development, testing and maintenance; document management, and software engineering. Lockheed has provided software support to Social Security since 1989 under various task orders.

The impending contract award comes at a time when SSA is under pressure from lawmakers and applicants to reduce disability hearing backlogs partly through videoconferencing, expedite claims processing and offer more online services. Given the rising tide of baby boomer enrollees and applicants suffering economic hardship, the agency’s infrastructure is strained. Social Security already processes 4.7 million retirement claims annually and pays 60 million beneficiaries a total of more than $700 billion a year.

The contract winners will be responsible for ensuring continuity of citizen services and remote disaster recovery as the agency renovates its 30-year-old database system, according to the request for proposals.

The health IT responsibilities for the program are exhaustive. Social Security manages the largest repository of imaged medical information in the world, according to SSA officials. The agency currently stores more than 250 million medical documents and adds 2 million more per week.

The contractor must create business models for exchanging electronic medical records, expand Internet services for Medicare and supplemental security income applicants, and enable the agency to request and receive medical data automatically through health information exchanges.

Such tasks require expertise in the areas of health IT standards, clinical terminology, multiple formats of electronic health records, patient confidentiality procedures, the medical community’s financial transactions and analysis of health care legislation.

This activity will “set them up for compatibility and interoperability with the pending growth of health IT among commercial providers who will be taking advantage of the HIT incentives that were legislated” in the 2009 Recovery Act, said Ray Bjorklund, chief knowledge officer for FedSources, a market research firm. Starting in 2011, doctors and hospitals that install certified electronic health records systems will be eligible for receiving bonus Medicare and Medicaid payments.

Several federal market specialists presume the government will award the contract to more than one vendor to boost competition, which should drive down prices, for individual task orders. The trade-off might be a lack of consistency in services, but the net benefits should generally outweigh the negatives, Bjorklund said.

He predicted multibillion-dollar contracts like SSA’s project will soon disappear in civilian agencies given tight budgets. In addition, the government is moving toward shared services, through which multiple agencies use a common IT infrastructure. The Obama administration particularly is pushing cloud computing, a type of shared services arrangement that provides IT products and services online and on-demand.

“For the civilian agencies this could be one of the last big ones for a while,” Bjorklund said. “But the pendulum swings.

— By Aliya Sternstein – 08/23/10 – NextGov.com – © 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED

White House crackdown on IT might be a moneymaker for vendors

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Some contractors are welcoming the White House’s threat to cut off funding for risky information technology projects as a moment that could be financially advantageous to them.

The Office of Management and Budget on Monday released a list of roughly 30 at-risk, mission-critical IT projects worth about $30 billion that need reworking. Simultaneously, OMB officials are deciding the fate of about 30 financial system projects a historically costly class of IT systems that the White House halted on June 28. Agencies must downsize the projects or scrap them to start afresh.

The drastic measures are part of the Obama administration’s effort to end the traditional practice of rolling out complex IT systems that take years to build and often fail.

OMB now wants agencies to break projects into smaller chunks that can be deployed more quickly and cheaply. This means some system contractors will be paid less while agencies stop to redirect wayward projects.

That’s just fine for some suppliers of easy-to-configure software, even though they were affected by the pause in the projects. Executives from these companies said they could receive more business when departments recompete canceled projects, or when they buy smaller systems in the future.

“When you get beyond the fear and anxiety of, ‘Oh my God! I’m on the list,’ most people who’ve been around will confide in you that this [megaproject] model has to go,” said David Lucas, chief strategy officer for Global Computer Enterprises, which provides Web-based hardware and software for financial management. GCE is the contractor for the Labor Department’s new financial system, which is one of the projects OMB put on hold.

GCE specializes in delivering small, incremental functions that take less than 18 months to deploy, an approach that aligns with what the administration is encouraging all agencies to embrace, Lucas said.

He claimed the company has attracted more attention from chief information officers and chief financial officers since the White House put the freeze on financial system development.

Industry group TechAmerica, of which GCE is a member, came out with a statement on Monday that raised concerns about the criteria the White House used to identify projects in need of adjustments. The trade group has argued that instituting blanket freezes on IT projects will force contractors to raise prices to protect themselves from financial losses if work is halted.

But Lucas said, “You have to be able to say, ‘Maybe I am going to make less this year, but the end goal is to be able to help the agency in the long term.'”

Executives with software maker Agilex view the acquisition reforms as a business opportunity rather than a risk. The company produces computer programs using a process called agile software development, which sticks to a specified budget and deadline but leaves open the scope of a system’s capabilities. Often, White House directives, congressional mandates and agencies’ changing priorities will demand projects add or eliminate requirements. Agilex officials said the company’s practices allow agencies to inspect and try products during coding to decide whether they meet constantly evolving needs.

“Agile software development really focuses on exactly the business process that the government is really trying to achieve: incrementalism, chunking. I can’t wait 12, 18, 24 months to see if something is working,” said Larry Albert, an executive vice president for Agilex. “Just don’t show me slides. I need to see active working code.”

Agency managers also can access an internal Agilex website that displays performance metrics for each application as it is being created.

Albert said a number of agencies have approached the firm since late June, when OMB began issuing memos detailing IT acquisition changes. Agencies, however, have not yet talked to Agilex about any of the projects OMB called out on Monday, he said.

GCE and Agilex said the move to deploy systems more quickly should benefit most providers of cloud computing applications, which are IT services accessed via the Internet that users can turn on and off on demand. The Obama administration has been prodding agencies to consider cloud-based IT as a way to save energy and money.

— By Aliya Sternstein – NextGov.com – 08/24/2010

GSA ponders prize contract vehicle

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The General Services Administration may add a contract program that would allow agencies to buy from a menu of technology products, marketing services and technical assistance for running contests. An April White House memo required that GSA “as expeditiously as possible” craft a contract vehicle for purchasing such goods.

GSA this week released a request for information from companies to get a sense of how many eligible federal contractors possess the technology or advertising expertise to pull off successful online competitions.

Officials also are contemplating the possibility of offering agencies purchasing options through the Multiple Award Schedules program, the government’s largest interagency contracting initiative, according to the RFI.

The purpose of the RFI is to identify federal contractors that have contest experience or are interested in teaming with companies that do — and to help non-traditional vendors with contest know-how become eligible for government contract programs, known as Schedules.

The earlier White House memo provided agencies with guidance on legally granting prizes to individuals, organizations and companies as incentives for developing solutions to agency problems. Different than contracts, so-called challenges aim to inspire innovation in government, do not always carry a cash prize and only reward people when their ideas produce results.

GSA already has contracted with the New York-based Web services firm ChallengePost to offer agencies a basic online app for coordinating contests.

But more sophisticated tools and talent may sometimes be necessary to tailor contests to agencies’ unique missions and problems. GSA is looking for products that, among other things, can be ordered online, on-demand – a business model called cloud computing; create an online community specific to each challenge; allow entrants to submit video, prototypes, links, images, software programs and other attachments; and enable Internet users to see such entries without registering on the website.

As for human help, GSA is seeking individuals or companies that can work with agency leaders to identify problems that might be best solved through prizes; conduct marketing campaigns to attract participants; and establish judging criteria.

This week’s RFI contains a list of optional questions that provide insights into the obstacles the government may confront in administering prizes:

For companies on schedule with experience in this area, do you think agencies are readily able to determine your experience in this area? What might make it easier for agencies to determine and purchase your products and/or services in this area?For companies on schedule without experience in this area, what do you see as the benefits and disadvantages of teaming with a company with that experience? How would you find that company? Will the proposed Industry Day help you find such companies? How might the government encourage or enable teaming?. . .

If you are not on a Schedule, what, if any, do you think are the biggest obstacles to getting on Schedule (knowledge, desire, cost, etc)?

Do you have other ideas on how GSA could make it easier for agencies to acquire products and services related to identifying, designing, and implementing challenges and prizes?

 

An Aug. 12 industry day will provide all parties with more details on the steps GSA will take to acquire the best prize tools and assistance.

— By Aliya Sternstein – 07/20/10  – NextGov.com

“Tag Cloud” helps you navigate GTPAC website

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You may notice that all of the news articles and other postings on the Georgia Tech Procurement Assistance Center (GTPAC) website contain “tags.”   (For example, see the tags which appear above:  c, , , )  Tags consist of key words and short phrases that give you clues about topics covered by a particular article.   In addition, when you click on a tag, all articles containing the same tag will appear.  All of the articles are sorted in chronological order, newest to oldest,  so this feature is particularly helpful when you are trying to research recent developments on the same topic.

The latest addition to the GTPAC website is what’s known as a “tag cloud.”  You can see it about half-way down the right-hand margin of this page.  (The “tag cloud” also appears on all other GTPAC web pages, except the home page.)  The “tag cloud” displays all of the tags used in all of the articles posted on the GTPAC website.  You’ll notice that the tags appear in various sizes.  A tag that appears large in size indicates that there are many news and instructional articles having to do with that subject matter.  Tags which appear smaller in size mean that there are fewer articles regarding that subject.

A helpful feature of the “tag cloud” is that when you click on any of the individual tags, all of the articles having to do with that topic will appear.  Also, if you hover your mouse over a particular tag, a number will appear, indicating the number of articles available for viewing on that subject.

Try out our “tag cloud”!   We’re striving to make the GTPAC website your first choice for government contracting resources, information and training.  We welcome your feedback and hope you will visit www.gtpac.org frequently.  Many more new web features will be launched soon!

© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.

8 stories to keep watching in 2010

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Each year, there are big important stories, and few would argue with our picks for 2009.

But we highlight these particular stories not only for the immediate impact they had but also for the lasting influence they continue to exercise.

In essence, these stories aren’t over. They will keep people talking and make headlines in 2010 and beyond.

— Nick Wakeman

1. Obama sets sights on procurement reform
The economy and Iraq were at the top of the agenda when the Obama administration took over the White House Jan. 20. But when the Office of Management and Budget released memos outlining the administration’s procurement goals, it was obvious that contracting also was very much a priority.

The memos and guidance that followed have set forth goals that affect outsourcing, picking which type of contract to use, categorizing work as inherently governmental and determining conflicts of interest.

Although industry experts at organizations such as the Professional Services Council have said that the direction coming from the White House is reasonable and reflects good procurement principles, the jury is still out on how individual agencies will apply those principles.

2. Beware of government poachers
The rising number of contractor employees being recruited to work at government agencies has sparked complaints from industry.

There have been reports of agencies having lists of contractor employees they want to hire. In some cases, agencies have used job pitches that incorporate economic fears, such as claiming that there are plans to cancel contracts, leaving the contract employee without a job.

Questions also have been raised about the ethics of hiring contractor employees. The government should follow the same rules industry does when it hires a government person, some say.

3. M&A continues to remake the market
Two major hardware players — Dell Inc. and Xerox — made large deals that involve services companies with significant government business. Dell acquired Perot Systems, picking up an outsourcing and systems integration business. Xerox went after Affiliated Computer Services Inc.

Dell said it already had a large services business that supports its products, but Perot will bring higher-end work in areas such as education and health care.

For Xerox, ACS brings business process outsourcing capabilities on programs such as Medicaid and Medicare. ACS also will gain a broader international footprint.

The third big deal of the year was Northrop Grumman’s decision to sell TASC. They were forced into the deal because of tougher organizational conflict-of-interest rules.

TASC is being bought by equity groups General Atlantic and Kohlberg Kravis Roberts and Co. Because of its size, which limits potential buyers, TASC could be headed toward an initial public offering in the coming years. It could become a long-term independent player in the market.

4. GSA under a leadership vacuum
This was one of the sadder chapters of the past year. Martha Johnson, who sailed through the confirmation process at the committee level, now sits and waits.

Using the Senate’s arcane rules to his advantage, Sen. Kit Bond (R-Mo.) has put a hold on a full Senate vote on Johnson’s nomination. He wants assurances that a federal office building will be built in downtown Kansas City.

The timing is poor because Johnson’s nomination was hailed by many inside and outside GSA as just what the agency needed to continue its comeback as an efficient contracting partner for the rest of government.

In a time when the highest levels of government are pushing a variety of procurement initiatives, the lack of an administrator at GSA works against the best interests of the government.

5. Growing acceptance of cloud computing
As vendors address security concerns, it has become harder for agencies to deny the benefits of cloud computing, such as trimming costs, adding new services and increasing capacity.

No one expects an agency to put everything on the cloud, and a public cloud might not be the answer for many agencies. But the tide has turned in favor of cloud computing.

A big reason is the high-level support of White House officials such as Vivek Kundra, who, with the General Services Administration, opened a cloud computing storefront for agencies to easily purchase cloud services.

Many of the large systems integrators also have begun embracing the cloud as a line of business.

6. Contract protests
During the past few years, contract protests on losing bids have moved from being an unfavorable tactic to a common business tactic.

The huge Alliant contract was delayed nearly a year because of protests. GSA’s solution eventually was to award nearly all bidders a spot on the multiple-award contract.

The current poster child for protests is the Transportation Security Administration’s Information Technology Infrastructure Program. It was hit by protests at the downselect stage, and TSA let all bidders back in. More protests followed when TSA awarded the contract to Computer Sciences Corp.

Work on ITIP is on hold until the dispute is resolved.

One factor that breeds more protests, industry observers say, is that companies face little to no consequences for protesting. So why not protest?

7. Leadership changes
Two of the largest government contractors in the market will see leadership transitions in the coming year.

At General Dynamics Corp., Nicholas Chabraja turned over the chief executive title to Jay Johnson July 1. In May 2010, he will relinquish the chairman’s title.

Ken Dahlberg is following a similar path at Science Applications International Corp. Walter Havenstein became CEO in September, and in June 2010, Dahlberg will turn over the chairman’s role.

Both companies have planned transitions, but new leadership will undoubtedly bring new initiatives and goals for the companies.

8. Farewell, EDS
Hewlett-Packard erased one of the most storied names in the government and commercial markets this year when it dropped the EDS brand in favor of HP Enterprise Services.

EDS, known originally as Electronic Data Systems, was one of the creators of the market for outsourced IT services, particularly data centers. The name survived for 47 years, including a stint of ownership by General Motors.

But there are a lot of reasons for the change, such as creating a single company culture and presenting a single face to the market.

Dropping the name EDS also signaled that integration of the acquisition was over. It’s now time for the billions spent to start paying off.

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