How to lessen sequestration's impact

Acquisition Policy Survey

Changes in federal acquisition environment taking toll on vendors

Federal Contractors Seeking Opportunities in Adjacent Markets in Face of Sequestration

E-Government Act helped usher in a new approach to federal IT

American contractor jailed in Cuba sues U.S., employer for $60 million

Jewish American jailed in Cuba sues US government

Contractors land more deals

Study highlights adverse effects of under-investing in US ports

Fiscal 2013 Administration Budget Proposal Supports Aspects Of Seaports Agenda

American Association of Port Authorities; Fiscal 2013 Administration Budget Proposal Supports Aspects Of Seaports Agenda

Other Stories worth reading:

National Cyber Range follow-on work goes to Lockheed

A cliffhanger in the White House

Yet, the many good things performed by people and companies in the business of government deserve some recognition.

For example, I just returned from a remarkable golf tournament supporting ThanksUSA, a non-profit which awards education scholarships to the families of our soldiers. Intelligent Decisions – a technology contractor to government – was the organizer and title sponsor.

MicroTech, an 8(a) technology contractor that often supports military charities, has an interesting effort promoting men’s health called “Movember”!

Let’s not forget the government industry groups such as the Bethesda Chapter of AFCEA which last year raised over $800,000 for the Children’s Inn at NIH.

There are far too many examples to mention here.

So the next time you read a headline about some egregious act in the government business, please remember there are far more instances – that may not be newsworthy – of this community performing remarkable acts of charity.

I’m Steve Vito.

Thanks USA

Intelligent Decisions

MicroTech

AFCEA – Bethesda Chapter

So it must have been welcomed news – although not surprising – that the Canadian government has decided to dramatically increase their spending in cyber security. As reported in the Wall Street Journal, on October 18th, the Canadian government will “more than double spending on defense against cyber attacks”.

No doubt this increase is in response to that country’s Auditor General’s report stating that Canada is not keeping pace with the cyber threats. The report said that despite the heavy investment made over the past 10 years, Canada is not adequately prepared for a cyber attack. …which of course, has significant implications for the many systems the United States has intertwined with Canada.

Cyber crime does not respect geographical boundaries. It is good news Canada seems to be taking action which will protect their networks and by extension, ours.

For links to articles mentioned in this segment, please go to WJLA.com/bizgov. I’m Steve Vito.

Canada to Beef Up Its Cyber Defenses

Canada falling behind on cyber-security despite spending almost $1B, Auditor-General says

Government of Canada and the Organization of American States (OAS) Cooperate on Cyber Security

Government of Canada Launches Cyber Security Awareness Month With New Public Awareness Campaign Partnership

One awards program worth noting is the Rising Star Awards which uniquely focuses on younger professionals who have made (quote)“an early – and substantive – mark in the government technology community” (end quote).

This program is coordinated and administered by the 1105 Government Media Group which includes Federal Computer Week, Government Computer News and Washington Technology.

All of the Rising Stars were recognized at GCN’s annual gala last Wednesday.
As the government strives to improve performance, recruiting and retaining top young professionals lie at the heart of successfully achieving this goal. Congratulations to the Rising Stars. And congratulations to the organizers of this awards program for recognizing the important contributions of these young people.

Please go to WJLA.com/bizgov for links to the entire list of The Rising Stars. I’m Steve Vito.

Meet the Rising Stars of 2012

Spurred on by OMB’s proclamation of making October the National Cybersecurity Awareness Month, DHS’s Advisory Council’s on Cyber Skills issued 11 tips of building a better prepared workforce. As reported in Nextgov.com, the recommendations included creating a dedicated cybersecurity career path, and improving opportunities for veterans.

Federal News Radio reports that the relatively new Cybersecurity Workforce Framework, developed by 20 different agencies, is having a significant impact on defining and training a better prepared cybersecurity workforce in government.

And the Wall Street Journal reports on what Raytheon – one of the largest contractors to the US Government – is doing to prepare its own workforce in cybersecurity.

Finally, new research sponsored by Unisys Corporation puts statistics to the public sector’s workforce usage of smartphones and tablets for business use; and the concerns these users have about security.

Please go to WJLA.com/bizgov for links to stories mentioned. I’m Steve Vito of UpsonVito.

Eleven tips for building a stronger cybersecurity workforce – Nextgov.com

Influence of federal cyber workforce roadmap growing – Federal News Radio

Raytheon CIO Drafts Employees For Security Push

Steven Pearlstein: Why cheaper computers lead to higher tuition

Related Story:
HHS plan requires employees to outfit personal devices to agency standards

Here are a few recent examples:

Last week the House Intelligence Committee warned both private and public sector organizations from buying products from Huawei, the big Chinese high tech company. The committee claimed that their products posed a national security risk which the company vehemently denies.

Another interesting example has put some defense contractors in the middle of two conflicting political forces. OMB wants to give contractors a reprieve from their obligation of giving an employee a 60 day notice of a layoff should it result from the sequestration.

Bloomberg reports Senator McCain claims OMB’s decision is politically motivated and seeks to stop it.
Of course, it’s no different in Europe where political forces prevented the merger between two enormous government contractors EADS and BAE.

To be successful contractors need to keep an eye on BOTH the business opportunities in government as well as the political forces behind them.

For links to stories mentioned here, please go to WJLA.com/bizgov. I’m Steve Vito of UpsonVito.

China Tech Giant Under Fire

Politics, not security, at center of Huawei, ZTE allegations, say analysts

Huawei's Ally: IBM

China’s defense of Huawei? U.S. tech companies spy too

McCain Threatens to Block Contractor Payments From Pentagon

Why the EADS-BAE Deal Collapsed

Government Discord Derails Massive European Merger

LA Times was one of several publications reporting that a cybersecurity executive order will be issued soon.

Federal Computer Week ran a story questioning if DHS is ready to take the lead on cybersecurity.

And the White House issued a proclamation making October the Cyber Security Awareness Month.

GovernmentExecutive.com ran a story asking if Republicans are wavering on their approach to the proverbial fiscal cliff.

For contractors, Washington Technology ran several noteworthy articles:

Todd Stottlemyer talked about rebranding his company Acentia
Mark Amtower articulated the challenges facing contractors today.
And

Stan Soloway wrote on the perils of the federal buyers focusing on lowest price

And in that other presidential race in Washington, Teddy – with the help of the Philly Phanatic – finally won the traditional fourth inning race at the Washington Nationals game. Go Nat’s!

Please go to wjla.com/bizgov for links to stories mentioned in this segment. I’m Steve Vito of UpsonVito.

Links to Stories:

Executive order on cyber security builds steam amid criticisms – LA Times

Is DHS ready to take the lead on cybersecurity? – Federal Computer Week

Presidential Proclamation -- National Cybersecurity Awareness Month, 2012 – White House Press Release

Are Republicans wavering ahead of the fiscal cliff? – Governmentexecutive.com

Take your pick: Plenty of contracting woes ahead – Washington Technology

Re-branding is more than a name change – Washington Technology

Doing the low-price limbo? – Washington Technology

Obama vs. Romney on Government Contracting and Federal Spending – Entrepreneur Magazine

Nats mascot Teddy Roosevelt vindicated after 7-year drought – GovernmentExecutive.com

Related stories:

Google Warns of New State-Sponsored Cyberattack Targets – NYTimes.com

Keith Alexander: Civilians must take cyber lead - Politico

Senators challenge administration on layoff advice – FCW.com

The BAE-EADS deal might be dying before our eyes – WashingtonTechnology.com

Small business contracting goal remains elusive – Federalnewsradio.com

In 2009, the president appointed Jeff Zients as Chief Performance Officer – a new position in government.

In 2010, an updated version of the almost 20 year old Government Performance and Results Act was signed. And one year after that, the website Performance.gov – designed to be the one stop report card on agencies’ performances – went live.

A blog worth checking out on the topic of public sector performance is Make Government Better which is put out by Patrick Chapman author of Getting Things Done In Government.

And Federal New Radio has a section that reports news on the government’s Performance Improvement Council.

In many cases, improving performance could not happen without targeted investments in workforce training and better information systems. Let’s hope these investments survive budgets cuts.

As always, please go to wjla.com/bizgov for links mentioned to this commentary. I’m Steve Vito of UpsonVito.

Links related to the commentary:

Driving Federal Performance

Performance Improvement Council News

Make Government Better blog

GPRA Modernization Act of 2010

The Government Performance And Results Act

Comparison of GPRA and GPRA Modernization Act

Government Performance and Results Act (GPRA) Related Materials

IT Dashboard

Annual budget guidance stresses performance and priority goals

Unique to the business of government is the buying surge that occurs as the government’s fiscal year comes to a close on September 30th.

Government buyers scramble to spend their annual budget dollars before the last day of the fiscal year or risk seeing a decline in their funding in the following year.

In a recent Washington Post article, John Slye of Deltek – a research firm focusing on government procurement of technology – writes that THIS buying season may be different however. Because of the uncertainty over pending budget cuts, many government buyers have delayed, curtailed or even canceled procurements.

Also September marks the annual awards ceremony celebrating the best in government as the Partnership For Public Service hosts its annual Service to America Medals. Congratulations to Lynne Mofenson of NIH for earning top honors for her study of ways to prevent mother-to-child transmission of the AIDS virus.

As always, links to stories mentioned can be found on WJLA.com/bizgov. I’m Steve Vito of UpsonVito.

Deltek: Federal IT’s busy season could face budget pressure

The Samuel J. Heyman Service to America Medals

National Defense magazine writes that Congress could not overcome the “divisive issues such as privacy rights, government overreach, liability and financial burdens on companies, and turf battles over whether Defense or Homeland Security should be in charge.”

In urging the President to issue this Executive Order, Senator Diane Feinstein, chairwoman of the Senate Intelligence Committee, said that “The threats …..are simply too great to wait for legislation."

CQ quoted Feinstein as saying, the Executive Order “can issue cybersecurity standards and provide technical assistance to companies willing to take voluntary steps to improve their security".

For an opposing viewpoint, Forbes Magazine ran an editorial by contributor Richard Steinnon stating that no Executive Order is necessary at all.

Links to these and others stories may be found on WJLA.com/bizgov. I’m Steve Vito of UpsonVito.

White House draft cyber order promotes voluntary critical infrastructure protections

Cybersecurity Legislation: Solution or Distraction?

Senator Asks Obama to Write Cybersecurity Executive Order

There Is No Need For A Cybersecurity Executive Order

Related Stories:
HUAWEI COUNTERS 'NEGATIVE COMMENTARY,' SEEKS GLOBAL EFFORT ON CYBERSECURITY

Connolly: Government to amp up cybersecurity

Cybersecurity Act Fails; What Next?

Obama vs. Romney on cybersecurity

After defeat of Senate cybersecurity bill, Obama weighs executive-order option

OVERNIGHT TECH: Congress returns as cybersecurity executive order is in the works

How Much Power Will the Obama Administration Seize in the Name of “Cybersecurity”?

Rogers Looks for Compromise Between House, Senate Cybersecurity Measures

Napolitano calls for cybersecurity intelligence information sharing

Norton Study Calculates Cost of Global Cybercrime: $114 Billion Annually

Yet, with contractors bracing for the government to reduce its spending, the question now is how will M&A activity be impacted? Will these budget reductions make acquisitions less appealing to buyers?

Will sellers be less willing to sell if they attract offers below their expectations?

Despite budget cuts, the federal government will remains an enormous and dynamic economy on its own. It spends over $500 billion annually on goods and services.

Bloomberg.com ran a recent story on how the size of this market is a primary reason why Carlyle Group and other private equity firms remain dedicated to it.

The recent acquisition of Deltek – a research firm that sells to contractors - might be a proxy for M&A activity in the government space. Its $1.1 billion price tag did garner a respectable 14 times trailing earnings.

For links to these and other stories, please go to WJLA.com/bizgov.

I’m Steve Vito of UpsonVito

Carlyle to Cerberus Lead Private Equity Federal-Contracting Push – Bloomberg.com

Fearing ‘fiscal cliff,’ investors bearish about U.S. contractors – Washington Post

Boeing exec sees defense consolidation — but not at top Washington Business Journal

Deltek Sued by Investor Over $1.1 Billion Thoma Bravo Buyout

When Tip O’Neill coined that phrase, he was reminding political candidates that voters are most interested in where candidates stand on the everyday issues… issues that impact them directly. That same logic can apply to you in the business of government.

You might want to read the Republican National Committee platform that Politico recently posted. Both Government Executive and Federal Times highlighted the portion of this draft most relative to government operations.

If you’re a small business, take a look at the Associated Press’ interesting comparison of the presidential candidates’ positions on small business contracting.

Finally, when evaluating more local candidates, take a look if they serve on a congressional committee important to your business and how they may have voted on that committee.

As always, links to articles in this segment can be found on WJLA.com/bizgov. I’m Steve Vito of UpsonVito.

Links to stories mentioned:

RNC posts platform on website – Politico

GOP endorses fed pay overhaul, smaller workforce – GovernmentExecutive.com

Draft Republican platform: Cut 10% of workforce, privatize TSA – FederalTimes.com

Where the presidential candidates stand on helping small businesses win more federal contracts –Associated Press

U.S. Presidential Candidates And Their Small Business Records

Federal News Radio said these cuts would bring total spending on technology to the lowest level in eight years.

What are some of the more obvious consequences of these cuts?

Profit margins should shrink as agencies become more interested in lowest price vs best value.

Big companies will compete more with small businesses as they all chase smaller opportunities.

Technologies that purportedly save agencies money – such as cloud computing - should have strong growth.

And of course, companies will investigate opportunities in adjacent markets such as utilities and healthcare.

Making spending plans so public is unique to the government business. No one can say they didn’t see these budget cuts coming.

I’m Steve Vito of UpsonVito.

Senators Barbara Boxer and Charles Grassley have introduced a bill that limits this amount to the president’s salary of $400,000. The Administration wants to lower the ceiling further to $200,000.

However, Stan Soloway, president of the Professional Services Council, argues in both Politico and in the Washington Business Journal that capping executive compensation will hurt a contractor’s ability to attract the best talent to the most challenging government programs.

Susan Eggleston, a vice president at research firm Deltek writes in Capital Business, that the Boxer/Grassley bill could further erode the thin profit margins of contractors.

Executive compensation may be an easy target, but capping them may lead to unintended challenges.

Of course, you can find links to these stories on WJLA.com/biggov.

I’m Steve Vito of UpsonVito.

About Federal Hot Minute: Federal Hot Minute is a roundup of stores on the business of government. Federal Hot Minute also airs on ABC7 inside Washington Business Report on Sundays at 9:30 a.m. and 11:00 p.m. The segment also airs on NewsChannel 8 on Mondays in the 6 a.m, 10 a.m. and 8 p.m. programming.

Past Federal Hot Minutes:
Study: Cloud computing saving agencies money
News Never Stops During Summer Doldrums
Agencies Missing Their Goal On Small Business Contracting

Stories mentioned in Federal Hot Minute:

Contractor pay cap is penny-wise, pound foolish - Politico

Deltek: Contractors should stay aware of compensation cap proposals – Washington Post

Related Stories:

Top federal contractors get 10 percent raise –Washington Post

Compensation Caps: Recipes for Disaster – Washington Business Journal

NY proposes $199K salary cap for state contractors – Business Week

Other Stories of Note:

Federal social media registry is in the works – Washington Business Journal

Will less federal spending really mean fewer jobs? – Federal Computer Week

Introducing the 2012 Fast 50 – Washington Technology

M&A activity slows in second quarter – Washington Technology

Paul Prouty fights back – Federal Computer Week

Audit finds some holes in NASA's cybersecurity – Government Computer News

Cyber Command struggles to define its place on a shifting battlefield – Nextgov.com

Senior ICE official takes leave amid allegations of creating ‘frat-house type atmosphere’ – GovernmentExecutive.com

VA details fiscal 2013 spending plans – Washington Technology
The Veteran Affairs’ Office of Information Security will see a boost in its spending as it focuses on cybersecurity, network security and privacy

Now comes a study from IDC – a reputable industry research firm – that quantifies this notion. As reported on Nextgov.com, this study – commissioned by Amazon Web Services - analyzed 11 organizations of various sizes and concluded that they spent on average 70% less by moving to the cloud.

To counter this argument, this article also referenced a different study - commissioned by CSC Corporation – whose participants did not see substantial savings.

Of course, the pros and cons of moving to the cloud extend past the financial aspect. Agencies have seen a reduction in their time to deploy new applications. But, on the other hand, some agencies who have unique IT needs or who hold highly sensitive data have been cautious in their move to the cloud.

As always, please visit wjla.com/bizgov for links relating to this story. I’m Steve Vito of UpsonVito.

Amazon cloud services provide enormous savings, company says

CSC CLOUD USAGE INDEX

Public-Sector Cloud Computing: The Good, the Bad and the Ugly

Moving to the Cloud: An Introduction to Cloud Computing in Government

Shocker: Government Agency Drafts Sensible Cloud Computing Strategy

All the major media outlets that cover government carried the story that Congressman John Boehner and Senator Harry Reid were able to reach a six month funding agreement which will avoid a shut down.

Another very important story is focusing on the Lieberman-Collins Cyber Security Bill. Federal Computer Week reports that the bill’s 70 plus addendums includes one that enforces the Data Center Consolidation Initiative.

Also relating to the topic of budgets, FCW also has an interesting story on how OMB is prepping agencies for the ever-looming sequestration which Congress has yet to resolve.

Finally, the recent edition of What’s Brewin running on Nextgov.com and written by my friend Bob Brewin, is a must-read. It deals will the importance of …parking lot attendants. Who would even question their importance?

As always, links to these stories and others may be found on WJLA.com/bizgov.

I’m Steve Vito of UpsonVito.

Six-month deal reached to avoid government shutdown

A rare display of bipartisanship before a deadlineRead more

Senators file dozens of amendments to Lieberman-Collins cybersecurity bill

Data center consolidation among 70 amendments competing for cybersecurity bill inclusion

OMB gears up for sequestration

Colin Powell on the Importance of Parking Attendants – Really

With that in mind, it’s noteworthy to read the recent media stories that again our government in 2011 missed its own goal of awarding 23 percent of its contract dollars to small businesses - giving these companies only 21.65 percent down a full percentage point from 2010.

The Obama administration seems to be responding. It appointed Joseph Jordon, formerly of the Small Business Administration to run the Office Of Federal Procurement Policy. And Federal Computer Week reported the administration has directed agencies to pay contractors faster to help the cash flow of small businesses.

And if you’re wondering which candidate for president will be better for small business contractors? Take a look at an interesting analysis published in the Caribbean Business press.

I’m Steve Vito of UpsonVito.

Links:

Government-Wide Performance: FY2011 Small Business Procurement Scorecard

Small business share of contracts shrunk slightly in 2011, SBA reports

Agencies fail, again, to meet small-business contracting goals

U.S. Rep. Gary Peters Applauds President Obama for Taking Action to Help Small Business - Congressional Action Still Necessary to Help Small Businesses Create Jobs and Compete for Federal Contracting Opportunities.

Obama nominates former SBA official as federal procurement chief

Prompt payments may become contract selection factor

Where Obama, Romney stand on small biz contracting

So like all industries, the investment community plays a vital role in this market.

Investment firms provide guidance to investors, they finance mergers, acquisitions, or help fund operations as a contractor patiently awaits the outcome of their bid.

Therefore the recent Washington Post article on investors turning bearish about government contracting is noteworthy. Budget cuts – particularly resulting from the fiscal cliff we’re approaching – is cited as the cause for the 15% decline of the Bloomberg index of federal contractors.

To be sure, these budget cuts will hit different companies differently.

A second story in the Post cites how some smaller firms, in this case Salient Federal Solutions, have taken precautions as they prepare for Sequestration.

The government market will remain enormous. Yet, contractors will apply more focus to their financial strategy and investor relations as they choose opportunities to pursue.

For links to these articles and others, please go to WJLA.com/bizgov.

I’m Steve Vito of UpsonVito.

Here are some useful links:

Investors bearish about contractors

Understanding Government Contracts Part 1

Understanding Government Contracts Part 2

Understanding Government Contracts Part 3

Staying calm as sequestration looms

8 best bets for contractors to survive sequestration

Planning for Sequestration

Sequestration Threatens Tech Firms, DoD Contractors and National Security

Top five states affected by sequestration

Across-the-board federal cuts could cost 2 million jobs, aerosopace industry-funded report says.

Its website says “NIEM connects communities of people who share a common need to exchange information” in order to enable better decision making. NIEM helps “connect the dots."

Over the past seven years ago, a long list of domestic and foreign governments have adopted NIEM protocols; such as the Justice Department’s Amber Alert, the FBI’s National Data Exchange and a European initiative to combat organized crime called EPOC.

Richard Spires, CIO at DHS, whose office oversees NIEM, says “NIEM represents the best return on investment for our taxpayer dollars that I know of."

There are countless acronyms in the business of government. Take note of one acronym however that stands for innovation and improved efficiency, NIEM.

I’m Steve Vito of UpsonVito.

Related links:

NIEM website

Memo of Understanding (MoU) between US, Canada and Mexico on a framework for exchanging data.

EPOC’s Use of NIEM.

NIEM director offers four tips on information sharing.

White House tells agencies to use same framework to exchange information.

DHS law enforcement agents moving to mobile, but not for several years.