Demystifying Exhibit 53: 5 Things Every COTS Vendor Should Know

What You Should Know

Christopher Wiedemann_headshot-65 x 85by Chris Wiedemann, Senior Analyst

The FY16 budget request is in and it brought a valuable piece of information for COTS vendors, the Exhibit 53.

In case you didn’t know, the Exhibit 53 is the single source for next year’s IT budget across government, broken down at the program level. Programs are where the rubber hits the road in federal IT, so knowing which programs your customers are focusing on for the rest of FY15 and into FY16 is not just a good idea, it’s critical to your success as a COTS salesperson in the federal market.

Obviously, the FY16 numbers in this document aren’t set in stone. They’re based on requested values, so there’s no guarantee agency IT budgets will reflect these numbers. However, knowing what your customers are prioritizing is still useful information and there are 5 major takeaways I’d like to share with you from this year’s Exhibit 53:

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3 Things You Probably Didn’t Know About DHS’s Full-year Funding Bill

Christopher Wiedemann_headshot-65 x 85by Chris Wiedemann, Senior Analyst

My colleague, Tomas O’KeefeDHS did a great job last Tuesday breaking down the major challenges and requirements facing the Department of Homeland Security (DHS) in the upcoming year, but there was one area he mentioned during his Webinar on DHS Sales Opportunities I want to explore more: the current status of FY15 funding for the department.

As Tom mentioned in the Webinar — as well as his recent blog post — DHS is the only department not currently operating under full year funding for FY15 – instead, the “cromnibus” bill that passed in December included a Continuing Resolution (CR), funding them at FY14 levels through February 27th. This means there’s still a possibility for DHS to run into a shutdown when short-term funding expires; however, there’s reason to hope it won’t come to that. The House already passed a full-year DHS funding bill on January 14th. It should be no secret that full-year funding bills can significantly impact COTS sales at any agency.

Let’s take a look at three highlights from the House’s DHS full-year funding bill:

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6 Ways FITARA Could Make a Dramatic Impact on COTS Sales

Christopher Wiedemann_headshot-65 x 85by Chris Wiedemann, Senior Analyst

On FridayUS Capital Building of last week, among all the furor around the FY15 “cromnibus” passing, another long-awaited bill passed; the Federal Information Technology Acquisition Reform Act (FITARA) made it through both the House and Senate as part of the FY15 National Defense Authorization Act (NDAA). All indications point to FITARA becoming law shortly.

Here are 6 ways FITARA could dramatically impact sales in the COTS community:

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Contract Consolidation: All You Need to Know, but Were Afraid to Ask

Christopher Wiedemann_headshot-65 x 85by Chris Wiedemann, Senior Analyst

SomethingContract that we’ve all heard about over the last few years, and particularly in the last year or so, is a trend toward contract consolidation. Consolidation efforts aren’t targeted at IT only, but are being put into practice across the entire government. Acquisition personnel and business owners are pointing to duplicative contracts and inadequate procurement methods as a major driver of unnecessary government spending and inefficiency. The solution, we’ve been told, is consolidation of common requirements into larger contract vehicles, like multi-agency contracts (MACs) or government-wide acquisition contracts (GWACs); this would enable the government to buy smarter
and focus more on achieving mission needs. There are some data points that seem to indicate consolidation is in the works – more and more bids are being received for each MAC task order, for example, and we’re also seeing much more competition for small business set-asides.

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Federal Cloud in FY15: Old Roadblocks, 3 New Opportunities

Photo of Chris Wiedemannby Chris Wiedemann, Senior Analyst

The Government Accountability Office Here is A Snapshot of Cloud in FY15(GAO) recently released a report tracking the progress of seven agencies’ in achieving their cloud computing implementation goals; unfortunately parts of it made for quite a nostalgic reading. The report profiled seven agencies – including HHS, Treasury, and USDA – and noted while each of these agencies increased their cloud spending between FY12 and FY14, the grand total of agency-reported cloud investments was only $529 million (averaging 2% of evaluated IT budgets). In other words, despite the 25 Point Plan instituting a Cloud First policy in 2011, federal agencies appear to have made very little progress in meeting their cloud goals; some reasons cited for slow adoption sound awfully familiar as well – with security concerns and cultural resistance to cloud computing coming up yet again.

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Lower Budget Doesn’t Mean Less Opportunity at HHS

Christopher Wiedemann_headshot-65 x 85by Chris Wiedemann, Senior Analyst

Last week, we talked about looking forward to FY15 and beginning to make some strategic decisions about sales targets at your agencies. Well, if you sell to HHS and you followed that advice, you may have noticed something a little concerning – namely, the department’s requested IT budget of $8.6 billion is significantly down from their FY14 enacted level of $9.6 billion. At first glance, it looks like the department may be getting squeezed in the aftermath of the Affordable Care Act rollout, and a lower budget almost always looks like bad news to industry. If HHS is a customer, you’re probably asking yourself how much the projected budget decrease will affect your total addressable market.

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Continuing Resolution On The Horizon for FY15

Christopher Wiedemann_headshot-65 x 85by Chris Wiedemann, Senior Analyst

FY14 is quickly coming to a close, and vendors and customers are both scrambling to get the ball rolling on September deals. With all that’s slated to happen in the next few months, and some industry analysts predicting a record-setting Q4 this year, it can be tempting to write off FY15 until October in favor of focusing all your attention on last-minute FY14 sales opportunities. However, it’s always important to keep the big picture in mind. If you don’t spare some thought for the beginning of next fiscal year, especially what the overall appropriations situation looks like, you run the risk of getting left out – or at least failing to properly plan for the first half of the year, when you should be targeting enterprise sales opportunities.

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