Fiscal 2016 filled with defense opportunities

Defense agencies across the Defense Department have made their budget requests for fiscal 2016, and with those requests come a slew of defense opportunities for the contracting community.

Speaking at their Government IT Sales Summit on Thursday, immixGroup analysts broke down each defense agency’s budget request and discussed where the money is going.

Obviously, the Defense Department has wanted similar things from year to year.

“What we have seen that’s different are the approaches DOD is taking to evaluate and acquire new technologies. So maybe not much has changed in terms of overall goals, but the way of getting there is different,” said Lloyd McCoy, consultant in immixGroup's market intelligence group..

The current budget deal, while not an actual budget, keeps the government funded through Dec. 11, and raises spending caps by $50 billion in fiscal 2016, said Stephanie Meloni, a senior analyst in the market intelligence group. This makes an omnibus bill more likely, she added.

“As far as overall drivers, the thing to remember is that cyber is the number one priority,” McCoy said.

Some cybersecurity-related drivers include security around the Defense Department Information Network and supporting the Cyber Mission Force.

The Cyber Mission Force is important to the IT products community, McCoy said, because many JIE-related acquisitions support this workforce, so contractors can expect continued heavy demand for collaboration tools, testing technologies and training programs.

Contractors should also keep an eye out for increased investments in identity and access management. “Terry Halvorsen, the DOD CIO, has been very vocal about getting rid of passwords, and as far as we know, the service branches are on board as well,” McCoy said.

Cloud opportunities remain big at the Defense Department and its agencies.

“Between last year and this year, this has got to be the area where we’ve seen the biggest changes at DOD,” Meloni said.

One big area of opportunity is with cloud access points, or CAPs, which are meeting points between the cloud and Defense Department networks. CAPs provide intrusion detection and firewalling, and the Defense Department wants to scale CAP usage across the department.

“Anyone in here who is looking to bring a commercial cloud solution to DOD is going to have to be away of what the CAPs are since there’s a pretty big chance that [the department] will require some customization to your underlying solution. In fact, there’s a good chance to position yourself here, if you build out a tool that works seamlessly with the CAPs,” Meloni said.

“Our last overarching technology driver is converged capabilities,” McCoy said. “This is an area where we see the focus not necessarily on new, never-before-seen technologies, but where we see a momentum toward implementing shared services.”

One such driver is unified capabilities, which is for example providing voice, video, data and various communications tools over the internet.

“This is an area the Army, Air Force and DISA are working on together as part of this DOD-wide effort to move away from hardware-based systems as well as improving network communications,” McCoy said.

Defense Information Systems Agency (DISA)

FY16 IT Budget: $4.6B

FY16 Discretionary Budget: $9.4B

The DISA budget saw a 1.9 percent decrease in requested IT spending due to decreased rates charged for computing services, immixGroup found.

The agency is seeking IP based collaboration in order to provide these services to the different branches. This is a good investment opportunity for real-time data sharing, speech recognition, VoIP and any collaboration solutions, Meloni said.

“DISA is also exploring a variety of off-premise and on-premise hybrid cloud approaches, which we think will really begin gaining momentum in fiscal 2016 and fiscal 2017,”she added.

Opportunities on the cyber front are centered around increasing visibility inside the network and on the perimeter.

Contractors should also be on the lookout for ENCORE III ,which Meloni said will follow in its predecessor’s footsteps and place an emphasis on small business participation.

The solicitation will likely be released next month and the value is likely to be in the $15 billion to $20 billion range, she said.

Army

FY16 IT Budget: $7.6B

FY16 Discretionary Budget: $127B

The Army budget saw a 3 percent increase in requested IT spending due to increase in communications and infrastructure investments, immixGroup found.

“The main thing to remember about [the Army’s] budget—and this is going to apply to both their operating and IT budgets—is that most of it gets eaten up by either personnel costs or operations and maintenance,” McCoy said.

That said, the Army struggles when it comes to modernization and rely on making incremental improvements to existing systems, he added.

Army will be picking up steam on the increased use of commercial cloud and application rationalization, Meloni said. And now that the Army is moving forward with their new cloud strategy, they have been able to make a bit more progress with their unified communications.

Right now, the RFP for an Army unified communications contract is expected to come out at the end of fiscal 2016, Meloni said.

Air Force

FY16 IT Budget: $5.3B

FY16 Discretionary Budget: $122B

The Air Force budget saw a 5 percent increase in requested IT spending due to realignment of portfolios and priorities, immixGroup said.

Many of the drivers at the Air Force involve the infusion of cyber and intelligence, surveillance and reconnaissance, Meloni said. The service is looking at their information as an asset and is finding ways to use it to plan operations and defend cyberspace.

“Along those lines, the Air Force has started to pay increased attention to cybersecurity for their weapons systems,” Meloni said. “They need to identify their own vulnerabilities.”

The Air Force is ahead of the Army in terms of meeting JIE initiative and to that end, the service has the Collaboration Pathfinder cloud platform in place, which provides email, collaboration tools and storage capabilities.

“In terms of cloud services outside of the Pathfinder, the Air Force is looking to establish a pay-as-you-go type of cloud infrastructure service, and they want to be able to use this cloud across all of their domains, everything from enterprise to C2ISR,” Meloni said.

Indeed, the Air Force is looking at the commercial cloud as a viable option, but Meloni added that the service still intends to outsource as much as possible.

Navy

FY16 IT Budget: $6.5B

FY16 Discretionary Budget: $161B

The Navy budget saw a 3.9 percent increase in requested IT spending due to increases in cyber spending for NGEN and tactical command and control systems

“Currently, the Navy has limited ability to conduct detailed data modeling, data mining and predictive analytics, and just about nook and cranny of the department has its need for analytic solutions,” McCoy said.

For the NGEN program, the Navy has three top priorities: tech refresh, preparing for contracts recompete, and consolidating to 15 NGEN data centers. “And those last two priorities have due dates of FY18,” McCoy said.

For CANES, McCoy said he expects to see installations finally start ramping up in this fiscal year.

The Navy will also be looking for ashore-based services available in deployed and denied environments.

“The Navy, like the rest of DOD, sees cloud computing as a critical enabler of how JIE wants information stored and how networks will become more interoperable,” McCoy said, adding that contractors can focus right now on the “low hanging fruit” like unclassified data.

Military Health System

FY16 IT Budget: $2.4B

FY16 Discretionary Budget: $47.8B

The Defense Health Agency budget saw a 20 percent increase in requested IT spending due to increasing funding for the new HER, virtualization and network upgrades.

“Telehealth presents a number of challenges as DHA works to take distance out of the equation,” Meloni said. That means that more devices are connected to the network, which necessitates better security.

Another fiscal 2016 priority for the Military Health System is infrastructure upgrades. Finally, the agency will be looking for more interoperability with non-DOD medical partners.