How to target NASA $2B opportunity
- By Tom O'Keefe
- Apr 07, 2014
NASA offers among the best opportunities for technology sales in the federal marketplace at the moment, with a considerable budget for technology. Navigating that organization, however, can be a challenge worthy of a rocket scientist.
NASA’s fiscal 2014 IT budget was around $1.44 billion, a figure fairly similar to their 2013 levels of $1.43 billion. That seems to be a solid chunk of change – but it doesn’t tell the whole NASA story.
This is a historically federated IT organization – its IT purchasing is conducted at multiple levels, with components often acting independently of each other. The bulk of the agency’s work takes place in NASA centers. The bulk of NASA’s IT funding, however, resides in its mission directorates. According to a report from the Office of the Inspector General, mission directorates control 62 percent of the IT budget, and the centers control 27 percent.
In fact, not only do mission directorates control a substantial portion of the existing IT budget, they have significant control over the entire NASA budget. Mission directorates are likely account for an additional $800 million or so in IT spending.
That means the actual IT spend by NASA is closer to $2.2 billion, with the difference embedded at the program level, as opposed to the typical IT budget (the better to keep it out of the hands of people determined to cut it).
What does this mean? Ultimately, don’t assume the center CIO controls the bulk of the IT spending at a NASA center – that spending could actually be in the hands of the mission directorates. A center CIO may not have the money for your technology solutions, but a mission directorate in the center may.
Governance and oversight issues
When you do the math related to the budget breakout above, NASA CIO Larry Sweet and his headquarter leadership team actually control only about 11 percent of NASA’s overall IT budget. That has led to concerns about IT governance at NASA, and the HQ CIO’s limited control over the IT budget.
In particular, governance issues center on enterprise-wide IT contracts collectively known as I3P (IT Infrastructure Integration Program), designed in part to enable the HQ CIO to have increased oversight of the NASA IT budget.
The shortcoming of the I3P contracts is that the enterprise approach that the HQ CIO aimed for doesn’t work in an IT culture that has historically been federated.
IT purchasing is still often conducted at the center-level, and based on interpersonal relationships developed over the years. The decrease in relationship purchasing in these new, enterprise-wide I3P contracts has caused inefficiencies, impeding cost-savings.
Additionally, it’s difficult to track the IT spending at the centers and report that data up to NASA HQ.
Sales rules of thumb
Most technology vendors have considerable opportunity to sell across the NASA enterprise. Depending on the technology, however, it may be easiest for account planning purposes to focus on certain directorates or centers first.
Here are some rules of thumb for selling into NASA:
- HQ and the center CIO leadership are looking for enterprise tracking and reporting tools.
- Mission directorates are looking for mission-enablement tools like design and project management.
- NASA centers will look for back-office applications and other user support tools, as well as updating and upgrading NASA’s networks.
Because the HQ CIO is interested in greater transparency into how component level budgets are being allocated, it’s possible that we will see increased HQ CIO-level mandates encouraging stronger reporting of IT spend. (In fact, expect exactly this if scrutiny continues to show negative results for the major I3P contracts.)
It’s worth reiterating that NASA’s printed IT budget of some $1.4 billion is understated to the tune of $800 million more IT spending at the mission level, where it’s out of sight of factions that might want to cut it.
Technology vendors have opportunity throughout NASA, as long as they do the necessary hunting to find the right office at the right time. The biggest customer may not be a Center CIO procurement officer – it might be the engineer next door.
Selling IT to NASA it isn’t rocket science – except when it is.
Tom O’Keefe is market intelligence senior analyst for immixGroup. He can be reached at Tomas_Okeefe@immixgroup.com.