Federal IT Contracting: An Interesting Read

By Daniel Eisen

In my last post I promised that I would highlight some articles I have collected on federal Information Technology (IT) contracting. The pile was taller than I thought.

My process of culling through articles kept reminding me of my how dad always used to say “how’s that going for you?” and “lots of luck”. But, I promised, so here goes.

My collection of articles on federal IT outsourcing started out as a stack of articles on private sector outsourcing. Here are a few worth mentioning.

• The Journal of Business Strategy (2004) – The 10 outsourcing traps to avoid
• The Academy of Management Executive (2003) – The seven deadly sins of outsourcing
• California Management Review (2003) – The winner’s curse in IT outsourcing: strategies for avoiding relational trauma (my favorite title)

These articles provide fascinating conversations on private sector outsourcing from its history, benefits, risks, through methods and approaches for successful implementation. It is not hard to imagine why the federal government would soon follow the same path. However, working through all of the articles focused on federal IT outsourcing two old adages kept coming to mind – “as much as things change, they remain the same” and “everything old, is new again.”

Here are some of my favorites:

From the early days, in 1996 there was a piece in the National Contract Management Journal, ‘Privatization: A Coming Wave for Federal Information Technology Requirements’. This article touts federal IT outsourcing benefits such as personnel cost savings, improved quality of information systems services, focusing in-house resources on core functions and increased access to new technologies. It also provides cautionary warnings ranging from unclear costs and benefits, the loss of control of information systems and corporate security concerns and existing union/labor agreements.

From a 1999 volume of the Journal of American Society for Information Science, I came across the article ‘Better Funding for Government IT: Views from the Front Line.’ In the piece, the author describes the federal IT budgeting process as “myopic”. Yet, there was a strong sense of optimism as the author suggest that the federal IT budgeting process could be improved through approaches and methods such as strategic planning and performance management, developing better IT portfolios, cross-boundary investments (i.e., integrating services across agencies), and sharing risks with the private sector by “linking payment to improvements in government outputs rather than the delivery of technology services.”

Jumping ahead a few more years, federal IT outsourcing is in full swing, supporting and strengthening e-government initiatives. A 2005 article in Public Performance and Management Review, ‘Outsourcing for E-government: Managing for Success’ declared that the government faced a shortage of IT skills and financial resources and through IT outsourcing could “gain access to skilled staff…with the added benefits of economies of scale.”

The author describes many familiar issues and challenges ranging from the political-regulatory environment to issues of IT compatibility and complexity. And, the transition to e-government was not just happening in the US.

A 2005 article in Information Technology and People, ‘From Government to E-government: A Transition Model’ discussed how governments could successfully make the leap from traditional government services to e-government services to “help citizens get in, find their information or transact their business, and then get out as efficiently as possible”.

It was comforting to see that the US was not alone facing many of the same issues and challenges as other developed countries as it shifted to an e-government model.

Finally, we come full circle with a very interesting 2010 working paper, ‘Federal Contracting and Acquisition: Progress, challenges, and the road ahead.’ It is worth a read (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1542830).

But, with limited space and since the “the road ahead” will be discussed in my final post, I will end things here.

I want to wrap-up by admitting that, at first, it was the titles of many of these articles that initially hooked me. Yet in the end, I was treated to many rich, vibrant, eye-opening, sometimes contentious discussions. (Google “federal IT contracting” and you will see what I mean). In my next post, it’s time to ‘geek-out’ and check out some emerging technologies for supporting and strengthening federal agency operations and ultimately the services our federal workforce provides to our nations citizens. But if you would like to read any of the above articles, send me a request in the comments section. I’ll shoot it right over.

Eisen out…

Photo Credit: http://www.itoutsourcingservices.com, http://teleburst.files.wordpress.com,  http://www.itp.net http://www.howtocontract.net, savethepostoffice.com

Oil Prices & Natural Gas

By David Chapinski

PhD student, Rutgers University

How does the New Jersey natural gas proposal help in public management?

In many states, a local utility company within a protected service area controls electricity and natural gas supply and delivery.  Pricing guidelines and other controls are set and monitored by the state in which they operate but for the most part, customers do not have a choice in supplier or price.

Today, 28 states have deregulated the supply of energy, encouraging competition and offering customers a choice of supplier, price and contract term. Electricity and natural gas are traded on the open market as a commodity so prices fluctuate with the supply and demand just like stocks.  Depending upon your risk threshold, you may elect to lock into a guaranteed price for a specific length of time or you may choose another pricing plan and term that may fluctuate with the market in hopes of increasing your savings.

As a local natural gas distribution company, New Jersey Natural Gas (NJNG) provides regulated retail natural gas service to nearly 500,00 customers.  I believe what makes the NJ Gas Proposal unique is that the interest in natural gas vehicles has been growing from both the private and public sectors.  This is especially the case for organizations with large fleets, portions of public and private bus companies and trash haulers like New Jersey Junk Removal.

Fleets are replacing older, more highly polluted diesel and gasoline vehicles.  Sure, there are underlying and intertwined goals of ensuring economic and employment growth while encouraging energy efficiency but we must remember what tradition means for New Jersey.  The traditional reliance on petroleum-based fuels for transportation has accelerated security, economic, air quality, health and environmental challenges in our country on a whole. But in New Jersey we are seeing the need for addressing a proposal like NJNG in 2012.  I believe there is a need because NJNG committed to upgrading the Clean Natural Gas (CNG) refueling equipment of two company locations (Lakewood and the Maude Service Center). That work was completed by January 2012.

But why is it so terribly important for supporters to try and gain traction?

Recently, the New Jersey Board of Public Utilities (BPU) approved a proposal by New Jersey Natural Gas (NJNG) to implement a pilot program that would help stimulate the state’s natural gas vehicle (NGV) market.  Investing up to $10 million over the next 12 months, NJNG will build between five and seven compressed natural gas (CNG) refueling stations at host facilities throughout its service territory.

I have often wondered at the phenomena along the eastern seaboard, which seems to get hit harder than the rest of the country when it comes to rising petroleum prices.  Last year gasoline prices in New Jersey peaked in May when the average per-gallon cost reached $3.88.

I find it  interesting that prices actually jump annually in the spring or summer in New Jersey, as companies change the blend of fuels to meet federal requirements. This often signals that good news is sure to follow.

I also believe that New Jersey has potential to lead the way to price stability. I do not believe New Jersey residents, like myself, believe that gasoline prices will be as high as they were in Connecticut in 2011 at $4.20 a gallon in 2012. Even if they are, we can adapt because we made it through a very tough recession and are still standing together as a whole.

When we look at alternative scenarios for the future of energy in New Jersey, we must not lose sight of the U.S. Energy Information Administration (EIA) June release of our nation’s Annual Energy Outlook, 2012 (AEO2012).

In addition to the reference projections, consumption, technology, and market trends and the direction they may take in the future, the report also shows how New Jersey will be taking one ‘on the chin’ for a very long time if we do not prove to the rest of the country that installing company-owned refueling sites offer many advantages.  I feel that there has been much less major highway experimentation taking place on natural gas in New Jersey in the last decade.

If we take a look at Table 4-10 below, the numbers are still showing the disillusion there can be any quick turnaround through natural gas proposals. The number of total alternative fuels has basically increased less than 4 percent the year prior in 2007.

Table 4-10: Estimated Consumption of Alternative and Replacement Fuels for Highway Vehicles

	2003	2004	2005	2006	2007 2005 2006 2007 2008 2009	2008		1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009
TOTAL fuel consumptiona	177,697,941	180,698.532	182,185,778	184,810,803	185,593,715	176,509,233 (R)	50	161,210,087	163,032,407	165,201,691	169,983,219	177,697,941	180,698,532	182,185,778	184,810,803	185,593,715	(R) 176,509,233	172,518,178
Alternative fuels, total	402,941	428,532	420,778	417,803	414,803	430,329	23,790	302,287	322,037	348,421	378,589	402,941	428,532	420,778	417,803	414,715	430,329	431,107
Liquefied petroleum gases	223,697	211,883	188,171	173,130	152,360	147,784		209,817	212,576	215,876	223,143	224,697	211,883	188,171	173,130	152,360	147,784	129,631
Compressed natural gas	133,222	158,903	166,878	172,011	178,565	189,358	72,412	79,620	86,475	104,496	120,670	133,222	158,903	166,878	172,011	178,565	189,358	199,513
Liquefied natural gas	13,503	20,888	22,409	23,474	24,594	25,554	5,343	5,828	7,259	8,921	9,382	13,503	20,888	22,409	23,474	24,594	25,554	25,652
Methanol, 85%b	N	N	N	N	N	N	1,212	1,073	585	439	337	N	N	N	N	N	N	N
Methanol, neat	0	N	N	N	N	N	449	447	0	0	0	0	N	N	N	N	N	N
Ethanol, 85%b	26,376	31,581	38,074	44,041	54,091	62,464	1,727	3,916	12,071	14,623	17,783	26,376	31,581	38,074	44,041	54,091	62,464	71,213
Ethanol, 95%b	0	N	N	N	N	N	59	62	13	0	0	0	N	N	N	N	N	N
Electricityc	5,141	5,269	5,219	5,104	5,037	5,050	1,202	1,524	3,058	4,066	7,274	5,141	5,269	5,219	5,104	5,037	5,050	4,956
Hydrogen	2	8	25	41	66	117	N	N	N	N	N	2	8	25	41	66	117	140
Other Fuels	0	0	2	2	2	2	N	N	N	N	N	0	0	2	2	2	2	2
Biodiesel	18,220	27,616	93,281	267,623	367,764	324,329	N	N	6,816	7,076	16,917	18,220	27,616	93,281	267,623	367,764	324,329	325,102
Oxygenates
Methyl-tertiary-butyl-etherd	2,368,400	1,877,300	1,654,500	435,000	0	0	,400	3,402,600	3,296,100	3,352,200	2,383,000	2,368,400	1,877,300	1,654,500	435,000	0	0	0
Ethanol in gasohol	1,919,572	2,414,167	2,765,663 (R)	3,729,168	3,729,168	4,694,304	500	950,300	1,085,800	1,143,300	1,413,600	1,919,572	2,414,167	(R) 2,765,663	3,729,168	4,694,304	6,442,781	7,343,133
Traditional fuels, total	177,295,000	180,270,000	181,765,000	184,393,000	185,179,000	176,078,904 (R)	4,360	160,907,800	162,710,370	164,853,270	169,604,630	177,295,000	180,270,000	181,765,000	184,393,000	185,179,000	(R) 176,078,904	172,087,071
Gasolinee	135,330,000	138,283,000	138,723,000	140,146,000	140,646,000	134,644,492	9,000	125,111,000	125,720,000	127,768,000	131,299,000	135,330,000	138,283,000	138,723,000	140,146,000	140,646,000	134,644,492	134,385,175
Dieself	41,965,000	41,987,630	43,042,000	44,247,040	44,533,000	41,434,412 (R)	,360	35,796,800	36,990,370	37,085,270	38,305,630	41,965,000	41,987,000	43,042,000	44,247,000	44,533,000	(R) 41,434,412	37,701,896

Expect NJNG’s natural gas proposal to make the necessary investments in CNG re-fueling infrastructure at locations where a company has or plans to use Natural Gas Vehicles, thus accelerating their development in the state of New Jersey for years to come and removing much older, more polluted diesel or gasoline vehicles from service. NJNG’s proposal will provide the necessary capital for constructing the re-fueling stations on the host company’s site, recovering those costs through the Clean Natural Gas Vehicle Infrastructure Program.

In other words, the company managing the quality assurance will also be required to make the Clean Natural Gas station available to the public. This is huge because we need accountability on a project of this magnitude in New Jersey.  By establishing the structure as such, I believe the Clean Natural Gas Infrastructure Program serves to accelerate the Natural Gas Vehicle market for both the anchor and company managing host area companies interested in moving away from traditional-based fuels, but unable to justify the infrastructure costs associated with installation.

Lastly, through the NJNG proposal and CNG Infrastructure Program, NJNG proposes to offer the managing company a turnkey Clean Natural Gas refueling station that will be available for their use.

———————————————————————————————————————————————————————

Total fuel consumption is the sum of Alternative fuels, Gasoline, and Diesel. Oxygenate consumption is included in Gasoline consumption.

^b The remaining portion of 85% methanol, 85% ethanol, and 95% ethanol fuels is Gasoline. Consumption data include the Gasoline portion of the fuel.

^c Excludes gasoline-electric hybrids.

^d Includes a very small amount of other ethers, primarily tertiary-amyl-methyl-ether and ethyl-tertiary-butyl-ether.

^e Gasoline consumption includes Ethanol in gasohol and Methyl-tertiary-butyl-ether.

^f Diesel includes Biodiesel.

Urban Renewal through Smart Technology

Could we see the end to taxis in this country?  Picking your destination as car sharing programs and other alternatives begin sweetening the pot of transportation. 

By David M Chapinski

Pedestrian safety is an emerging concept in our modern cities. Two years ago, Washington, D.C. attempted to include the pedestrian when city leaders created the Pedestrian Advisory Council. The Council meets regularly to discuss issues of walking and safety and testifies before the D.C. Council. It also engages the community on how to make the District a more walkable place.

As a city, D.C. has hundreds of pedestrian crashes a year that result in deaths. Leaders are still sorting out all the causes and solutions.

In some parts of D.C. about half of all households lack any personal automobiles and instead rely on alternative modes — first and foremost their own two feet.

People often emphasize the importance of “livable, walkable” cities and in recent years, technology has developed to help achieve this.

But how are cities adjusting to this change?

Individuals who don’t own a vehicle can skip the hassles of waiting for a cab or conventional car rental with advanced rent-by-the hour transport technology like car2go or ZipCars.  Pay a one-time membership fee and you are on your merry way with a vehicle for how long you need it.

Reserve a car ahead of time or simply pick one up automatically and spontaneously in your city (if the service is available).  When you are done, simply park the car at the location where you initiated the coverage and the service team takes care of the rest.  Parking, refueling, cleaning, and all other services are all included.

Car sharing programs and the technologies that allow it would have their challenges in a city like New York where taxis are somewhat of a ‘way of life’ and have been for over a century. Dismantling that infrastructure and mentality is an arduous task indeed.  Who would want the burden of that?

Not any mayor I can find.

However, the numbers do not lie.  By the end of the summer, it will cost more to take a taxi in New York than to rent a car from one of these car sharing programs.

If you are following New York’s recent policy conversations, cab rates are going up. The Taxi and Limousine Commission (TLC) is considering a fare hike on cabs. It’s been 8 years since the last overall fare hike. Conversations are ongoing for a 20-25 percent increase that would raise a typical cab ride to $14 from $12. This request is fraught with concerns, but that’s for another blog.

What’s remarkable about most car-sharing programs is the flexibility and concept of urban mobility.

Car2Go is the only car sharing service I’ve encountered that charges by the minute. Their tiny 41-miles-a-gallon blue-and-white cars are intended for casual point-to-point trips within a designated operating area of the city.

The idea of convenience rings throughout their service. This year, the company will launch a new smartphone app, a vehicle finder on the website and an improved customer call center. There’s also always the classic method of just finding a car on the street.

The convenience matches a population and cities that have grown accustomed to using a smartphone for most daily activities.

As a cohesive city, D.C. has built a diverse transportation network and has been smart about putting jobs, shopping, and schools together in walkable neighborhoods.

While there is still work to do and mistakes to correct, especially in underserved neighborhoods, D.C.’s metropolis remains highly attractive to employers, businesses and new residents.

What makes me a believer in alternative driving methods in cities like D.C. is that pedestrian crashes have gone up in the past two years. Consider these numbers, provided by Metropolitan Police Department (MPD):

On average, around 650 people[i] are hit by a car each year.

In 2010, 753 people were hit by a vehicle.

2011 saw an astonishing 942 people in 2011.

This is too way high. We can do better with technology.

If a safer city is our goal, we have to get these numbers down.  For it to work, it would require prioritization and redirection of resources. There is a difference between pedestrian safety and a pedestrian society and those of us, like me, that are concerned citizens, need to improve upon rather than stretch.  Stretching pedestrian traffic does not benefit a city’s appeal.

The good infrastructure trends in D.C.’s core would need to spread aggressively to the outer neighborhoods.

• More capital spending would need to be leveraged to fully complete the city’s walking and biking networks.
• A robust “share the road” media campaign and consistent enforcement of traffic laws would be critical.
• Other agencies’ roles would need to be defined and the mayor’s office would have to manage the execution of the full plan, holding everyone accountable.

All this requires a visionary leader who will make something like zero traffic fatalities a city wide initiative.

I don’t see the right ingredients right now for D.C. to join the ranks of Chicago and NYC, unfortunately. If proven wrong, that leader is still going to find a lot of support from neighborhood leaders everywhere.  I believe in programs like car2go because they were not created with the intent and purpose to act solely as a cash source.

Car2go offers a practical and affordable alternative to the rising costs and hassles associated with vehicle ownership.

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[i] National Safety Council
Photo Credit: notopramen.com, treehugger.com, santacruztrail.org

The Impact of Technology on the Federal Government

By Daniel Eisen

This is the first in a blog series focusing on the impact of technology on the federal government. In future posts I will discuss the growth of Information Technology (IT) contracting, emerging technologies, and the challenges faced by federal agencies and federal IT contractors resulting from the recent federal budget crisis.

So, where do we begin? The impact of technology on the federal government operations and the delivery of citizen-centric services are undeniable. Developing and implementing any technology is a complex undertaking. Developing and implementing technology for the federal government, can and usually does, increase this level of complexity. These efforts usually involve multiple stakeholders and interests such as the prime contractor, subcontractor(s), consultants (technical and/or management), other federal agencies, federal budgeting constraints, cumbersome procurement processes, state, local, tribal ,or federal laws and statutes, Congress, and citizens. These efforts are also well-known for their size, complexity, staggering budgets, mismanagement, poor planning, and failures. A 2008 Government Accountability Office report stated:

OMB and federal agencies have identified around 413 IT projects—totaling at least $25.2 billion in spending for fiscal year 2008—as being poorly planned, poorly performing, or both. Specifically, through the Management Watch List process, OMB determined that 352 projects (totaling about $23.4 billion) are poorly planned. In addition, agencies reported that 87 of their high risk projects (totaling about $4.8 billion) were poorly performing. Twenty-six projects (totaling about $3 billion) are considered both poorly planned and poorly performing.

Since it is no fun to lead with the bad news, let’s look at “the good” of one federal government IT effort with the goal of increasing agency efficiency and effectiveness in delivering citizen-centric services.

In 1986 the IRS piloted its electronic tax filing program (e-file).  In 1990, e-file became nationally available.  By June 2011, a Treasury Press Releases (Issue Number: IR-2011-64) touted individual e-file tax returns had surpassed the one billion mark since 1986. Also, reported was more than “100 million individual tax returns were e-filed during the 2011 filing season”. And, in a December 2010 report (http://www.gao.gov/new.items/d11111.pdf), the GAO stated for fiscal year 2009, the IRS reported an e-file return cost 19 cents to process compared to $3.29 for a paper return. The report cited in 2005, the IRS processed 62 million paper fillings and 68 million electronic fillings and in 2010, only 40 million fillings were paper compared with 94 million electronic fillings.

However, the e-file program has not been all wine and roses. The IRS began a program to modernize the original e-file system in 2004. Now called, Modernized e-File (MeF), the December 2010 GAO report also suggested “although IRS began using MeF to accept individual returns for the first time in 2010, the system was underutilized.” The report states IRS officials cited several reasons such as the system is “unproven compared to the current legacy e-file system” and “the legacy e-file system had a lower rejection rate than MeF and return filers may have stopped using MeF after encountering performance problems.”

Here’s where things get complicated. Congress has set an 80% e-file adoption goal for major returns. So, how might the issues and challenges faced by the MeF modernization effort impact e-file adoption? A July 2010 study in Computers in Human Behavior discussing a model of e-file adoption suggested adoption of electronic filing is significantly influenced by factors such as “trust in the internet and trust in the e-file provider”. Also, a 2011 study in Transforming Government: People, Process and Policy, highlighted factors such as level of effort, social influence, security and an individual’s belief in their own competence to successfully use the e-file system all played a role in “predicting taxpayers’ e-filing intentions.” And, a 2011 report by The Electronic Tax Administration Advisory Committee (ETAAC) discussed the following five groups of recommendations on issues in electronic tax administration:

• Standards for security and accuracy for the electronic tax community
• 1040 Modernized e-file (MeF) platform
• Barriers to e-filing employment tax returns
• Tax filing simplification
• Collaboration and partnership with the electronic filing community

What does all of this mean? Like I said, IT development efforts are complex and Federal IT efforts only add to this complexity. And, in reality, most technologies are not completely perfect. With all of this complexity and imperfection, I like to think in all of the confusion, things will somehow work themselves out.

I need to stop writing and get working on my 2012 taxes. In my next post…the growth of federal IT contracting.