Hot topics for the New Year

Politics, must-have technologies and major new contracts are front and center in 2007. Permeating these issues is the continuing war in Iraq and Afghanistan.
Contractors have plenty to juggle, both in positioning their companies for long-term growth and in helping agencies meet short term goals.

Your guide to the hot issues of the day starts here:

The Democratic Congress

Rep. Nancy Pelosi (D-Calif.) started her historic term as the first woman Speaker of the House in high spirits Jan. 4, a day that included another first: The gavel changed hands with a hug and a kiss. Pelosi posed for a photograph with House members' children and grandchildren and, the formalities over, turned to serious business as the new Democratic majority began to take on Iraq, ethics reform, homeland security and other high-profile issues.

Pelosi presided on her first day as Speaker over passage of a broad package of rules changes meant to distance lobbyists from lawmakers, but it remains to be seen whether a Democratic Congress can usher in an era of reforms.

The Democrats' determination to curb President Bush's commitments in Iraq may not bode well for defense-heavy federal contractors, but plenty of other technology-related items remain on the party's agenda, like a push to provide interoperable public safety communications for homeland security, that could keep contractors humming.

Contractors can also expect more questions about procurement practices in light of controversies such as the Rep. Randy "Duke" Cunningham (R-Calif.) scandal and reports from the Acquisition Advisory Panel about a lack of competition for contracts.

Homeland Security

New leaders in Congress might spark increased interest in spending to boost security on the home front, including funds for more antiterrorism equipment and training, improving first-responder communications, protecting critical infrastructures, screening passengers at airports and sharing antiterrorism information.

Democratic leaders have been vocal in calling for more protections in urban centers, but they were essentially ignored as Republicans pursued other priorities. Similarly, the GOP often sidelined Democratic hopes for improved port and cargo security, chemical security and cybersecurity.

Expect to see these long-frustrated homeland security goals to come into the spotlight.

GSA and the fight for GWACs

General Services Administrator Lurita Doan has made no secret of her desire
for GSA to run all governmentwide acquisition contracts. She lost one battle when the Office of Federal Procurement Policy said that the Scientific Engineering Workstation Procurement contract would remain a NASA-run GWAC. But she did
persuade the Treasury Department to abandon the Treasury Communications Enterprise contract, a controversial $1 billion contract vehicle.

Look for Doan to continue this battle and work to make GSA agencies' first choice in procurement.

Networx and Alliant

The two megacontracts from GSA, each with ceilings in the tens of billions of dollars, will be awarded in 2007.

Networx, a huge telecommunications services contract that replaces FTS-2001, has two parts. One is for nationwide services, while the second is for more niche, localized solutions. Nearly every major carrier is a bidder, but only time will tell if the contract succeeds as a vehicle for improving service and driving down costs.

Alliant and Alliant Small Business are a bundling of several large governmentwide, task order contracts into two contract vehicles: one for full-and-open competition and the second for small businesses.

GSA hopes that the two contracts become the primary vehicles that agencies use to buy IT services. Even if this strategy is only partly successful, companies not on Alliant risk being left without a major vehicle for growth.

Gaga over Google

NASA and Google Inc. agreed in December to collaborate to let anyone on the Web
experience a virtual flight over the surface of the moon or through the canyons of Mars.

In 2007, look for Google to make more inroads with agencies.

The Space Act Agreement signed with NASA Ames Research Center and Google establishes a relationship to work together on a variety of technical problems ranging from large-scale data management and massively distributed computing to human-computer interfaces.

IPv6

From car dashboards to soldiers' helmets, nearly everything is going to have an IP address in the not so distant future. The need for virtually infinite IP addresses is the biggest driver behind IP Version 6.

For IT companies, the transition from today's IPv4 to IPv6 almost certainly will result in business opportunities for the next decade and beyond.

Initially, agencies need help operating dual-stack networks that use both IPv4 and IPv6. Securing this environment is a looming issue.

As IPv6 devices become ubiquitous, agencies will need help in building networks to manage all those devices with IP addresses.

Small Business

Just what is a small business was a question the Small Business Administration hoped to answer when it released new regulations calling for size recertifications for companies that hold long-term small business contracts.

But the new rules, which call for a company to re-affirm its size every five years or when it is bought, has only incensed the small-business community.

Some small-business owners believe that once they win a contract, they should not have to give it up, no matter how large their company grows. Others want access to awards they feel were meant to go to truly small companies and believe that small businesses should be made to recertify annually. The new regulations go into effect June 30.

A possible complicating factor is new leadership of the House and Senate Small Business committees as well as a new SBA administrator who may decide to alter or postpone implementation of the new rules.

Wireless infrastructure

With connections measured in miles instead of feet, WiMAX technology is stretching the wireless infrastructure like never before. The availability of broader wireless coverage will result in more devices like notebook PCs, handheld devices and voice over IP phones.

By 2010, federal wireless telecommunications spending could reach $3.3 billion, according to Input Inc., Reston, Va.

Dependence on wireless devices is driving much of the growth, as is the need to have network access in places where it's too difficult and expensive to install a wired network.

Integrators need to know all of the IT-related mandates that agencies must follow, not only those from the Defense Department and National Institute of Standards and Technology, but security rules as well.

Public health

Data is one of the weapons of choice in the fight against bioterrorism and infectious disease. Congress wants to spend $824 million in fiscal 2007 for public health systems and $487 million for hospital preparedness. A goal is to link hospital and health care records, compiling information on emergency room visits, hospital capacity and lab results.

The Centers for Disease Control has taken some baby steps toward developing a public health network and a national disease surveillance system, but much remains to be done.

The chance for companies of all sizes to land opportunities to build and deploy health-surveillance and detection systems, as well as communications and alert systems, for federal, state and local customers remains strong.

Intelligence IT

The thirst for technology to fight terrorism at home and abroad is sure to increase in 2007 as threats continue to emanate from various groups.

Language translation, data mining, cryptology and other technologies are in high demand. IBM Corp., for example, is working with Joint Forces Command to develop voice-to-voice translation technology known as the Multilingual Automatic Speech-to-Speech Translator. Mastor enables two-way, free-form, speaker-independent speech translation.

The Defense Advanced Research Projects Agency is working on similar projects that have the potential to become tomorrow's must-have technologies. DARPA listed among its significant technology achievements in 2006 micro air vehicles, cognitive computing systems programs and autonomous air-to-air refueling.

War in Iraq and Afghanistan

Despite a new Congress and a likely new policy in Iraq, IT spending on these and future wars is sure to remain strong.

Technologies such as IP interoperable collaboration systems, interoperable sharing architectures/solutions for communities of interest, unified communications, intelligent routing, collaboration, video, wireless and mobile access routing are areas of interest for DOD.

Expect to see technical strides in 2007 that will enable a truly mobile network-centric environment for civilian and military users.

Mobile satellite communications interest continues to grow as well. Very Small Aperture Terminal satellite ground stations have become the primary systems for communications on the go. Look for demand for these portable VSAT antennas to increase.

Small dishes and the availability of land-based gateways and teleports also are fueling growth.

Information sharing

Information sharing is the holy grail of the war on terror, particularly as government might have been able to thwart the 9/11 terrorist attacks if various experts and analysts had shared their bits and pieces of intelligence. Since then, information sharing has slowly gained momentum, with 42 states now operating or planning to open intelligence fusion centers where analysts daily can examine new data from multiple sources.

Other efforts, including the Homeland Security Department's national information network, have been severely underused, however.

Now former Director of National Intelligence John Negroponte in late 2006 released a plan for one of the most ambitious efforts to date to coordinate federal information-sharing: the national Information-Sharing Environment. But the director's sudden, unexpected departure for the State Department may complicate implementation.

2008 Elections

Still two years away, the end of the Bush administration is already on people's minds. No matter which party captures the White House, leadership changes will occur. In fact, those changes likely will begin even before the elections as political appointees take their leave.

As increasing numbers of agencies and divisions of agencies are run by acting chiefs, the expectation is that new initiatives will be delayed or even cancelled.

Mergers and Acquisitions

Last year ended with a flurry of M&A activity, with Veritas Capital Fund LP snapping up Pearson Government Systems Inc. for $600 million and Perot Systems Corp. buying QSS Group Inc. for $250 million.

Lockheed Martin Corp. also showed it is still a dealmaker, though on a smaller scale, when it announced its fifth deal of the year: Management Systems Designers Inc. for an undisclosed amount.

With the large number of publicly traded government IT companies as well as the continued interest of private equity groups, conditions are ripe for consolidation to continue in 2007. Nearly every player in the government market continues to be either a buyer or a seller.

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