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Fed IT Contract Window Still Open - but Budget Is Pinching

Fed IT Contract Window Still Open - but Budget Is Pinching

Technology vendors have scored some significant federal contract victories so far this year, and at least one has involved implementing cloud computing innovations into a major federal agency's IT goals. However, the contract process is starting to feel the impact of sequestration, so that's adding a level of urgency to the process -- and making it more important for everyone to stay within budget goals.

The U.S. Securities and Exchange Commission is seeking a broad range of information technology products and services with a potential contract value of US$80 million over 10 years. That's a nice chunk of business, and it's just one of many potential federal IT contracts now available.

In addition to providing these opportunities, federal agencies have remained active in awarding major IT contracts to companies such as Accenture, Salient Federal Solutions, and Smartronix. For vendors, this steady level of federal business is good news given all the concern about budget tightening.

Agencies are not starting from scratch, and funding for many investments has been anticipated for more than a year. Still, continuing budget discipline will ensure that spending will be done at prudent levels -- and there are some signs that the federal "sequestration" process is starting to pinch.

Opportunities Stress Efficiency

On the contract opportunity front, the SEC proposal is one of the more attractive projects on the short term horizon.

The SEC's primary goal is to acquire a range of IT application development and support services. The agenc's request for proposal says vendors "should elaborate on their capabilities and experience with content and document management systems, externally hosted solutions, systems integration with internal and external systems, shared service providers, handling of confidential data, mobile interfaces, business intelligence and data analysis."

Potential contractors should demonstrate their experience in Big Data and cloud computing, the agency said. The SEC has extended the vendor response deadline several times to its current date of April 30, 2013.

In addition to the broad IT services proposal, the SEC has issued a separate requirement for upgrading its EDGAR financial information data base. Both initiatives will "enable the continuation of our enterprise modernization efforts," Pamela Dyson, SEC deputy chief information officer, told the E-Commerce Times.

"Specifically, they each ensure the SEC is consistently enhancing and improving core systems and technology," she said. The SEC's proposals stem largely from its own assessment of requirements, but also reflect the general federal effort to improve IT management.

"We will continue to aggressively leverage the cloud when and where appropriate, eliminate system and data silos, and most importantly, allow the public to access information in an efficient and user-friendly manner. We have made significant progress to date and these actions will help ensure we continue to evolve," Dyson said.

Another intriguing opportunity is available at the U.S. Patent and Trademark Office within the Commerce Department. USPTO is seeking information from IT vendors about moving its storage infrastructure to a managed service model.

Program objectives include reducing infrastructure outages and downtime, and having a single accountable entity responsible for the storage program. Functions include hardware and software management, data bunkering, and disaster recovery operations.

Contract Awards a Good Sign

Some recent IT contract awards should encourage the vendor community:

Accenture: The company received a major five-year contract from the Internal Revenue Service to serve as the lead resource for the agency's account management services program. The system provides customer service representatives with real-time access to account information regardless of location, utilizing a correspondence imaging inventory.

The system will display and validate changes to updated taxpayer accounts, and store and manage case activity information. The contract value was not disclosed, but could be quite hefty. Accenture is one of many large and small firms participating in a long term, multibillion dollar IT program at the IRS.

Salient Federal Solutions: The federal Pension Benefit Guaranty Corporation selected the company to provide IT operations and maintenance support, as well as services designed to modernize, consolidate, and simplify IT infrastructure to improve performance and reduce costs.

Salient will also provide PBGC with the capability to install, operate, and maintain IT hardware and software components, and the expertise to effectively manage the application of technology for the agency's requirements. The multiple-award contract is for one year with four option years at a potential total value of $140 million.

Smartronix: The Treasury Department has awarded the company a contract for the continuation and expansion of the department's community cloud web hosting function.

The enterprise business solution vehicle is designed to provide a wide array of web services across the department. The contract extends the work Smartronix began in 2010 on the refresh of the Treasury.gov website, and migration to a Microsoft SharePoint platform running on the Amazon Web Services Elastic Compute Cloud system.

All of these contracts are part of continuing IT programs, and not necessarily efforts designed to meet recent innovation goals. That demonstrates that even with the budget tightening, federal agencies need to maintain a reasonable level of sustained IT investments.

"The government must continue to do business, even in a sequestration environment. Many of the services are there to support the individual citizen, which must continue and improve in efficiency," Brad Antle, CEO of Salient Federal Solutions told the E-Commerce Times.

Now that federal funding for fiscal 2013 has been assured through a Congressional continuing resolution, the contracting atmosphere has improved, he noted.

"There has been an uptick in awards since the budget was clarified. However, there is clearly a focus on delivering critical services in light of budget pressures," Antle said. "Our contract with PBGC is an 'indefinite delivery -- indefinite quantity' vehicle, which can be used to acquire needed services as they arise, without a new lengthy and costly process."

Agencies have shown a tendency to pusue innovative technologies -- if they can be incorporated into continuing requirements. The Smartronix contract with the Treasury Department fits into this scenario.

"It does appear that many federal agencies are still actively pursuing transformation within the cloud, which represents cost savings at many levels, providing the 'buy as you fly' approach and the elasticity needed to control cost and performance, and thus works with dwindling budgets," David MacRae, executive vice-president of business intelligence and operations at Smartronix, told the E-Commerce Times.

"We have developed a cloud brokerage capability that provides managed services, dashboards, and flexibility across various cloud providers," he said. "This seems to be very appealing to federal agencies."

A High Stakes Enterprise

"With sequestration and budget uncertainties, the stakes have never been higher for our civilian agency clients. In the current fiscal environment, every agency must see a real return on every dollar spent," Ed Meehan, managing director of Accenture's civilian portfolio, told the E-Commerce Times.

"We have a true focus on outcomes, not simply outputs. We see many opportunities to bring high performance solutions at this time, despite tight budgets," he said. "Clearly, sequestration is having an impact -- but it also creates urgent opportunities to bring smart, affordable solutions to our federal clients -- and we are seeing a high degree of interest backed by recent awards."

The signs of budget discipline pop up in various ways. In late March the Federal Energy Regulatory Commission indefinitely postponed the implementation of the fourth year of an IT support services contract with a potential value of $22 million.

The U.S. Navy's East Coast IT conference has been cancelled "due to budget and travel restrictions," according to a USN bulletin, but some sessions will be offered online.

"The economic reality our federal clients find themselves in requires us to work collaboratively to find affordable solutions," Accenture's Meehan said. "That creates opportunities in this market. Smart, thoughtful, cost-effective solutions will always bein demand."


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