Kundra 'IT cartel' remarks raise ire of contractor professionals

 Editor's note: This story was modified after its initial publication, to insert additional material.

Former Federal CIO Vivek Kundra is back in the news a week after his departure with his bold assertion that an “IT cartel” of major federal contractors allegedly is hampering efficiencies in government.

Kundra made his parting shot in an article in the New York Times on Aug. 30, attracting interest on Twitter but also surprising and disappointing many members of the federal technology community.

“It was inappropriate,” Stan Soloway, president of the Professional Services Council, told Federal Computer Week. “I’m sure some people were offended.”

That was putting it mildly. Several federal IT executives were outraged by Kundra’s comments, but declined to speak publicly for fear of negative repercussions.

“Everyone is calling about it today,” said a senior IT contracting insider. “People are feeling really surprised and upset by it. ‘Cartel” is such a sensitive word, with anti-trust implications.”

Kundra made the claims in an editorial he wrote about his drive to promote cloud computing in government, which he views as an efficiency measure.

"As the global economy struggles through a slow and painful recovery, governments around the world are wasting billions of dollars on unnecessary information technology," Kundra wrote in the editorial. "This problem has worsened in recent years because of what I call the'"I.T. cartel.' This powerful group of private contractors encourages reliance on inefficient software and hardware that is expensive to acquire and to maintain."

Later in the article, he refers to the alleged cartel again, implying that federal contractors are holding back federal investment in cloud computing.

“As foreign governments prioritize investment in the cloud, the United States cannot hesitate because of hypothetical security threats that serve the entrenched interests of the I.T. cartel,” Kundra wrote.

Kundra also named names in the editorial. The article mentions Northrop-Grumman as a company that was the contractor for a wasteful IT project. Northrop-Grumman officials declined to comment.

In a related speech in San Francisco on Aug. 31, Kundra named Northrop again, along with Lockheed Martin, Boeing, and Raytheon as companies that present stumbling blocks to federal adoption of cloud, according to an article in a newspaper called The Australian.

“’Cartel’ is a good headline word, but it is inappropriate and a misuse of the term,” Soloway said. “Using that word detracts from the substance of what he was saying about cloud.”

Soloway also took issue with Kundra’s comments implying that IT contractors were putting obstacles in the way of government innovation.

“The companies he referred to are all have their own cloud solutions. They recognize cloud technology is the wave of the future,” Soloway said.

Since the government sets the terms and conditions of acquisition and procurement, it is not fair to blame delays in adoption of cloud completely on companies, Soloway said.

“To blame the companies is a bit unfair,” he added.

Soloway was not the only critic.

"While we agree with [Kundra] on many issues, especially on the significant benefits for governments moving to the cloud, calling federal IT contractors a "cartel" is not one of them," said Phil Bond, president of TechAmerica, a trade organization for IT companies. "Federal IT contractors are a very important part of government operations and they should be viewed as partners, not enemies,"

But Kundra did have support for his article and the ideas he was promoting. The editorial was retweeted multiple times on Twitter.

Habib Nasibdar, chair of the Cloud Computing Task Group for the American Council of Technology-Industry Advisory Council, said the task force and federal contractors in general have been very supportive of Kundra’s goals to improve efficiency and adopt cloud computing.

“We are going to continue to promote those policies,” Nasibdar said, adding that the Kundra’s ‘cartel’ comments are not a central part of the discussion of cloud.

“At the end of the day, we all will need to come together and show efficiencies. I don’t think the ‘cartel’ comment has anything to do with the underlying message,” Nasibdar said.

Kundra, who recently left the White House to accept a post at Harvard University, was not immediately available for comment.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Tue, Sep 6, 2011 JC

As a federal contractor I take offense to Mr. Kundra's comments. Federal adoption to the cloud is hampered by the old school way of thinking by long-time federal employees and outdated processes that rely on old hardware and outdated languages. And the cloud is not new. It has been around for long time just not called the cloud. Gov't can benefit from the cloud and the security concerns are not hypothetical. The US Gov't must ensure that the information will be protected and that's the bigger risk than moving to the cloud because Mr. Kundra said so.

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