Government IT Procurement – Storm on Plain Sailing?

boat

Has government procurement lost its rudder completely? Stand aside the $500 hammer and golden toilet seat – seems IT procurement is all at sea.

Anchors Aweigh?

The Navy’s ahead of the wave. Fearful of protests by bidders forcing it to walk the plank, the Navy awarded its $5.3 billion Seaport-E to 3,752 companies. The sailors’ll be drowning in proposals, and the contractors’ll be thirsting for revenue.

All at Sea?

How does the Navy torpedo IT cost from $286 million to $2.1 million? NMCI/NGEN price for SPAWAR Pacific email – $286 million. Price shopped to DISA, $55.3 million – but looking through the telescope and not seeing a solution on the horizon this decade. Dell wins with COTS cloud commercial Microsoft hosted email for $2.1 million. Now that’s plain sailing. Evidence that cloud means a hole in the boat for IT contractor revenue?


Top 20 to Watch?

But let’s look past these two vessels to consider the full horizon – and beyond the horizon. BGOV and Deltek recently came out with their respective FY 2015 lists of the top 20 Federal IT programs. These are the aircraft carriers, although Deltek’s has a bigger landing strip at $206 billion vs. BGOV’s $136 billion. To be sure, these are no trifling sums. Place BGOV’s lightweight vessel next to national economies to put it in perspective. The Top 20 programs have a combined value that exceeds Bangladesh’s GDP, weighs in at just a hair less than Iraq’s, and comes in at more than half Israel’s.

Cloud in the Armada?

On a flight last weekend I took a look at the data. Here’s what I found. First observation – no explicit cloud programs, although they’ll likely sneak into many of the solutions. No place for cloud in mission-critical infrastructure or apps?

BGOV Boatload

But let’s focus on what’s here, rather than what’s not. Here’s the breakdown of the mega contracts. It’s green gov at the head of the fleet. No, that’s not eco-friendly. Marching at the head of the flotilla is the U.S. Army, with three programs worth $69 billion. No fatigue here. Then it’s a long fall back to the number-two contract – Defense Health Agency’s $20 billion D/SIDDOMS IV.

Stern to stern in the third berth are DISA and VA at $12 billion apiece. GSA sits next in the lineup with two programs valued at $9 billion. Then it’s DHS with three programs valued at a total of $5 billion, with the Air Force right on its wing tip – it has three programs with a combined value of $4.3 billion. Then it’s Navy, HHS, SOCOM – at $1 billion each, followed by the Army Corps of Engineers and DOT, with $0.9 and $0.8 billion, respectively.

Any Port in a Storm?

Mapping BGOV to Deltek is not exactly 20/20. Only six of the BGOV programs appear on the Deltek top 20. Interestingly, drilling down on those six programs, the two analysts attributed different values for the same contracts – to the sum tune of $8.2 billion. BGOV is more optimistic. It values Army’s ITES-3 at $25 billion, while Deltek values it at only $20 billion. BGOV puts VA’s whopper at $12 billion, where Deltek shorts it at just $9 billion. They trade places on Army Encore III – Deltek values the program at $12.2 billion, with BGOV placing it at only $12 billion. Further, BGOV attributes with greater fidelity, attaching Encore III to DISA and D/SIDDOMS IV to DHA. Deltek maps them both to DoD.

Lots of differences between the numbers but one thing is sure – there’s still lots of money in Fed IT. That said, this could be the calm before the storm. The 2014 bipartisan budget agreement smoothed the waters for 2014 and 2015, but sequestration took $1 trillion out of the budget over a 10-year period – that considered with clouds on the horizon – and it could be there’s a storm brewing over the horizon.

Feeling sea sick? Grab the Dramamine. You may need it. How do you see the future for Fed IT funding?

Steve O'Keeffe
About Steve O'Keeffe
Steve O'Keeffe is the founder of MeriTalk, the government IT network. MeriTalk is an online community that hosts professional networking, thought leadership, and focused events to drive the government IT dialogue. A 20-year veteran of the government IT community, O'Keeffe has worked in government and industry. In addition to MeriTalk, he founded Mobile Work Exchange, GovMark Council, and O’Keeffe & Company.
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