Steve Charles


Are you ready for a tougher 2013 market?

EDITOR'S NOTE: This is the second in a four-part commentary series by Steve Charles on trends in the federal market. Click here for part one.

Participants in the federal IT market have now seen the first few pitches for fiscal 2013, a game that will go into extra innings. An administration’s request always touches off debate, all the more so this time around because it’s an election year and because Washington is highly divided.

Yet beneath all of that, you’ll find a clearer picture of agency IT priorities that, in fact, will likely get bipartisan, almost routine support. The various committees and subcommittees of Congress always quibble with this or that. For example, the administration’s request for $16.6 million for e-government projects is unlikely to get funded in full. At least, it never has been.

In part one of this four-part series, we explored the new realities that contractors face in the realm of public sector IT. In this second installment, we’ll look at certain themes that give clues to where contractors should focus their efforts given the tight budget.

On the civilian side, expect continued focus on these cross-cutting issues:

  • Cybersecurity, especially now that the Senate has put a stake in the ground with a comprehensive cybersecurity bill with which the administration generally agrees. The government and private operators of critical infrastructure will become increasingly joined with respect to standards and practices and, therefore, technologies.
  • Consolidation of thematically-related services spread across multiple agencies. The goal: to present a more unified face to the public. This is the BusinessUSA initiative, and it extends up from IT integration to the administration proposal to gain authority to reorganize agencies themselves.
  • Mobilizing the federal workforce. This process is on the fast track on a number of fronts, including security, more organized buying of mobile products and services, and re-architecting systems and processes to orient them more towards the new holy grail—social, mobile, and spatial.
  • Data analysis to drive business decisions and reduce improper payments. An example is Centers for Medicare and Medicaid Services, where the staff is buying pattern recognition and other data tools to reduce fraud.

On the defense side, 2012 is something of a transition year. In 2013, the administration pivots national defense strategy, a change with both philosophical and budgetary underpinnings. Plan for:

  • The netcentric view of operations will morph to the data-centric view. Network availability has become a given. But intelligence derived from data is what it will deliver. For example, the Navy’s Rear Admiral Jan Tighe, director of decision superiority, recently said she was looking for a cloud-based, big-data approach to making actionable information out of the mass of data Navy sensors gather.
  • Wider adoption of commodity mobility tools, notably (but not exclusively) iPads. The opportunity for other technology vendors includes the endless software development and packaged applications to run in these environments. The Air Force is planning localized buildout of LTE 4G networks at its bases to cover everyone from the flight line to the fire department.
  • Cybersecurity and everything-as-a-service are closely related in order for the cloud to become trustworthy as a class of resource.

2012 leads to 2013

Again, all we know now about 2013 is the request. Other factors make the eventual enacted budget a wild card. For one thing, Congress is unlikely to enact a 2013 budget until the lame duck session at the end of 2012. That of course is after the Oct. 1 start of fiscal 2013, but we’ve learned to live with that yearly occurrence. For another, the possibility of the across-the-board “sequester” cuts still loom, even though everybody wants to avoid them.

But on the whole, technology vendors have information they need to begin planning as 2013 approaches. Simply put, from a policy and mission emphasis point of view, 2013 will look a lot like 2012.

We at immixGroup look at the analytical perspectives section of the budget request to get an idea of two drivers of technology, namely, mission areas the administration plans to stress using information technology, and its goals for the technology itself.

The IT budget, under the 2013 request, would fall 1.2 percent, from $79.8 billion to $78.9 billion. Reductions don’t occur across the board. Most of the decline occurs in the Defense Department.

In both years, the administration cites success in reducing operations and maintenance spending with a concomitant increase in developmental, innovative projects. The O&M reductions will continue via three avenues:

  • Data center consolidation. Some 525 data centers are to be closed in fiscal 2012, and another 600 in 2013. The next phase will be creation of a marketplace of available data center capacity for agencies to use before building new capacity. OMB has tasked the GSA to create the marketplace.
  • A policy of default use of cloud computing and shared application services. The theme here is shifting CIOs from what OMB calls an asset mindset to a services mindset. The administration expects completion of the FedRAMP certification process to accelerate cloud computing.
  • TechStat review sessions of IT projects deemed to be late or over budget or having the potential to run off the rails. Federal CIO Steve Van Roekel wants to increase the frequency, taking them back up to monthly this year.

On the Congressional front, the newest development, besides the Lieberman-Collins-Rockefeller cyber bill in the Senate, is the emergence of seven, count ‘em, bills in the House for small business. They seek to increase the federal quotas for small-business contracting and increase transparency into subcontracting.

About the Author

Steve Charles is a co-founder of immixGroup, which helps technology companies do business with government. He is a frequent speaker and lecturer on technology and the federal procurement process. He can be reached at or connect with him on LinkedIn at

Reader Comments

Tue, Mar 6, 2012 Editor

Thanks for adding your own insights to the mix.

Tue, Mar 6, 2012 Ravindra Garg Chantilly, VA

Mr. Charles has been very insightful in his reading the tea leaves at the U.S. Federal; While the market is changing, the focus is clearly on doing more with less; Stringent project management, data center consolidation and shifting the mind set from asset to service are absolutely noteworthy; - This sure presents an opportunity in audit, security, intelligence and system integration. DFAS IP has been near and dear to me and I actively persued; I am glad Immix won it; Congratulations!!

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