Change Is More Than a Line Item
First, on the budget: Ray Bjorklund, senior vice president and chief knowledge officer at FedSources, has said that according to his firm’s analysis, the overall contractor-addressable budget across the federal government will decline 4.8 percent from 2010 to 2011. Federal information technology spending will fare a little better, growing by 2.9 percent in total. Defense information technology will do a bit better with a 6.6 percent increase. Most European and Pacific governments either are forecasting or have set budgets for defense and security with significant cuts, some as high as 15 percent to 20 percent. However, remember that with the
So what should we observe in terms of government direction? Where should industry be applying its effort and resources? This is my take based on input to date.
Recognition of cyberspace as a war- fighting domain and the need to address cyberspace effectively is prompting the establishment of the U.S. Cyber Command and component commands in each of the military services. This inevitably will force consolidation in the cyber community and a change in the way industry is engaged.
The agility required for asymmetric warfare and humanitarian assistance/disaster relief operations has put unprecedented emphasis on the enterprise view for joint commanders/organizations, the military services and federal agencies. Cloud, or at least shared, computing will happen broadly in some form. Federation is occurring and will accelerate in the
Government research and development (R&D) budgets will be among the hardest hit. Much of the burden for R&D will shift further to industry—a trend that has been occurring for some time. Aneesh Chopra, the
We will see fewer new contract starts, and what we do see will lean heavily toward services. An example would be the new services contract recently announced by the Defense Information Systems Agency (DISA) through a request for information (RFI). This would be a new global contract for information security, operations centers, program management, test and evaluation, enterprise architecture, systems engineering, spectrum management and exercise support. The value has been estimated at up to $100 million. Indefinite delivery/indefinite quantity (IDIQ) contracts are likely to be more focused going forward to promote competition. Emphasis on small business content is likely to grow because of the Obama administration’s focus on small business.
Finally, we need to be cognizant of the increased emphasis on conflict of interest that has emerged from Congress. New legislation gives government buyers much less flexibility in mitigating conflict of interest. Large companies with both systems engineering and technical assistance (SETA) and advisory and assistance services (A&AS) contracts, as well as production contracts or bids, will be most affected. Companies will have to be more strategic in their bid approaches, weighing their entire contract portfolios against the conflict-of-interest provisions in target contracts. We no longer should assume that mitigation for apparent conflicts of interest will be seriously considered. The most significant example of this problem to date is the divestiture of TASC by Northrop Grumman, driven by conflicts of interest between TASC’s SETA and A&AS work and the production work of other elements of Northrop Grumman.
The bottom line is there will be challenges going forward, and both government and industry need to work together to ensure optimum application of available resources to meet the mission. Effective communication is an important element of this cooperative effort.