HUD buying into shared services; renewed push to merge DoD’s CIO

“Inside the Reporter’s Notebook” is a biweekly dispatch of news and information you may have missed or that slipped through the cracks at conferences, hearings and the like.

This is not a column nor a commentary — it’s news tidbits, strongly sourced buzz and other items of interest that have happened or are happening in the federal IT and acquisition communities.

As always, I encourage you to submit ideas, suggestions, and, of course, news to me at jpmiller@federalnewsradio.

Watch for more action around financial management shared services in the coming months.


Industry sources confirmed the Department of Housing and Urban Development will announce its decision in the coming days to move its core financial management system to the Treasury Department’s Bureau of Fiscal Service. BFS, formerly the Bureau of Public Debt, provides shared services to about 40 percent of the civilian agencies, including NASA, the Social Security Administration and components of the Homeland Security Department.

Besides Treasury itself, HUD will be the largest migration to the shared service, and it could take two years, the industry source says.

Additionally, the Interior Department announced earlier this week it awarded Unisys a $44 million contract to put its Financial and Business Management System (FBMS) in the cloud.

And the Federal Trade Commission, the Coast Guard and the Commerce Department are in the discovery phase to decide whether to move to a shared service provider.

But the fact that HUD is making the move to Treasury is a significant milestone. The agency’s decision has been a long-time coming. It started the process to implement a new financial management system in 2006 by releasing a request for proposals. It eventually awarded a 10-year contract to IBM in 2010 worth $129 million to implement a new system. It was a three-phased approach starting with HUD’s core financial system and then pulling in other components. The project struggled and HUD, with the help of the Office of Management and Budget, revisited its plans that same year.

“I think this is a poster child for the broader discussion for problems with large financial systems and trying to do too much,” said an industry expert who follows federal financial management. “I’m glad that HUD is headed in this direction of moving to a financial shared service provider. It just makes sense for most agencies to do the same.”

HUD was one of several agency financial system projects OMB focused on during its 2010 effort to better oversee these programs.

On the IT Dashboard, HUD said it would spend $18 million in 2013 to support its legacy systems, and a total of $26.3 million on its core financial systems.

An email to HUD seeking comment on its decision to move to a shared service provider was not returned.

Over at Interior, Unisys will transition FBMS to a secure, cloud environment that runs SAP’s Enterprise Resource Planning (ERP) software platform.

Interior uses FBMS to account for all income and expenditures.

The award to Unisys was the first task order under Interior’s Foundation Cloud Hosting Services, which the agency awarded to eight companies in May.

The Senate Armed Services version of the fiscal 2014 Defense Authorization bill contained some interesting tidbits, including this provision:

“Creates an Under Secretary of Defense for Management and designates that new position as the Deputy Chief Management Officer and Chief Information Officer of DOD.”

Yes, you read that correctly. The Senate Armed Services Committee wants to merge Beth McGrath, the current DCMO, and Teri Takai, the current CIO, to make one mega technology management position.

To some, this change isn’t surprising.

Bob Lentz, the former DoD deputy assistant secretary of Defense for Cyber, Identity and Information Assurance (CIIA) in the Office of the Assistant Secretary of Defense, Networks and Information Integration/Chief Information Officer, and now president of Cyber Security Strategies, said he long predicted this kind of move.

“The challenge is this merger really is a massive job,” he said. “One could take the position that it will diminish the importance of the CIO in a digital/net centric, information enterprise. On the other hand, one could say it creates a powerful marriage especially since in DoD the current CIO has had more of her empire eroded. I always worry (as a security guy) that the chief information security officer role be given proper authorities given Clinger Cohen/FISMA and the growing emphasis (finally) by the president and defense secretary that cybersecurity is a vital priority and one can’t disconnect security from DoD governance.”

The provision came out of the Senate subcommittee on Readiness and Management Support. An email to the subcommittee Chairwoman Jeanne Shaheen (D-N.H.) asking for comment and details on the provision was not returned.

The House version of the Defense Authorization bill lacks a similar provision.

Other observers worry about the CIO’s role in DoD even without this change. There are rumors that the CIO could be moved under the undersecretary of defense for acquisition, technology and logistics, leaving it unclear what that would mean for the CIO’s role and authority.

The Senate markup also includes several cyber provisions, including one that would require the president to establish an interagency process to develop policy to control the proliferation of cyber weapons through unilateral and cooperative export controls, law enforcement activities, financial means and diplomatic engagement.

Other provisions would strengthen DoD’s oversight and management of U.S. Cyber Command, the authorities of the command, its infrastructure and its training ranges and training capabilities, and would require the president to establish an interagency process to develop an integrated policy to deter adversaries in cyberspace.

Dan Tangherlini came through his nomination hearing to be the next administrator of the General Services Administration relatively unscathed. Interestingly, shortly after the hearing, however, GSA brought back the five officials who were put on administrative leave after the agency’s inspector general May report on conference spending in 2011.

Sources confirmed Steve Kempf, Amanda Fredriksen and Karen Kopf were among the five put on leave and allowed to return to their positions last week.

GSA didn’t return an email seeking comment on why these employees were allowed to come back to work.

There were several interesting news snippets that also came from Tangherlini’s official answers to pre-nomination hearing questions from the Senate Homeland Security and Governmental Affairs Committee.

One of the most interesting facts concerned GSA’s plans to reduce the fees charged for using its services and contracts.

Tangherlini said in fiscal 2014 GSA will reduce its Assisted Acquisition Services fee to 3.12 percent from 3.58 percent. The agency estimates a governmentwide savings of $23 million.

Additionally, GSA’s General Supplies and Services portfolio, which includes acquisition operations, supply operations, enterprise supply chain solutions, personal property management and business management, would reduce its average markup to supply operations customers to 23 percent from 30 percent. GSA estimates a governmentwide savings of $55 million.

The committee asked about the Industrial Funding Fee surplus of more than $600 million. Tangherlini offered no new insights into what GSA is doing about the IFF, saying only, “I am still reviewing the status of the level of fees associated with the fund. I am examining various proposals and look forward to receiving your input on the matter.”

Tangherlini also addressed GSA’s ongoing CIO consolidation. He said all major IT offices now report to Casey Coleman, GSA CIO. The CIO, chief acquisition officer, chief financial officer and chief administrative officer also must jointly approve any IT investment over a certain amount — he didn’t say how much.

Finally, Tangherlini offered an update on GSA’s data center consolidation initiative. He said by the end of 2013, GSA will close as many as 35 data centers, with a plan to shut down 43 more in 2014.

“GSA is currently planning to migrate one of our large GSA owned/operated data center [sic] in Kansas City into a world class data center managed by NASA,” Tangherlini wrote. “This approach would not only reduce costs to taxpayers, but will further strengthen an interagency shared services approach to solving our most complex problems across the federal government.”

OUT&ABOUT The Senate Homeland Security and Governmental Affairs Committee votes on the nominations of Tangherlini and Howard Shelanski, to be the administrator of OMB’s Information and Regulatory Affair (OIRA), Monday afternoon. AFCEA holds its cyber symposium in Baltimore starting Tuesday. Speakers include Maj. Gen. John Davis, senior military advisor to the undersecretary of defense for cyber policy; Maj. Gen. Jennifer Napper, the director of plans and policy for the Cyber Command; and Lt. Gen. Ronnie Hawkins, director of the Defense Information Systems Agency. Women in Technology holds a panel discussion Thursday evening in McLean, Va., with Izella Dornell, deputy CIO at Commerce; Charlette Watkins, the assistant deputy director of national intelligence for Acquisition and Intelligence Community and senior acquisition executive in the Office of the Director of National Intelligence; and others.


June 11 — Inside the Reporter’s Notebook: Some question who’s in charge at GSA with six feds on admin leave

May 28 — Inside the Reporter’s Notebook: Reverse auctions for IT; DHS’ answers not satisfying; Contractor salary cap proposal returns

May 13 — Inside the Reporter’s Notebook: The CIO shuffle continues; the last E-gov benefits report?