With IT spending up, federal agencies are finding they need to look outside their walls for qualified talent. This is presenting new public sector opportunities for private sector tech companies.
The U.S. federal government collects massive amounts of data. Everything from citizens’ health care information, details about nuclear power plants, and data on the U.S. electrical grid are gathered every day. With most agencies migrating to a cloud-based solution, securing the data and breaking it into manageable units has become a high federal government priority.
As a result, the 2014 Federal Budget allocates $75.9 billion to IT spending, and many federal agencies are continuing to turn to private companies for additional support to meet the demand. This presents private companies with a tremendous opportunity to gain new clients and contracts within various federal agencies.
“This is an area of the government that has been as affected by sequestration and reduced spending as other areas,” says Brad Wine, a partner in the Washington D.C. office of Morrison & Foerster. “Once a company is able to get its first government contract, especially with Homeland Security or one of the other three letter agencies and overcome barriers to entry in the federal sector, IT contracts generally and cybersecurity projects for the government in particular become a very lucrative area.”
Previously, IT companies felt that they had to service either the private sector or the government. However, many companies now have a product or service that is marketable in both arenas, says Morrison & Foerster partner Greg Giammittorio. One of the trends he has noticed through his work with AlphaTech, a Morrison & Foerster initiative that focuses on peer-to-peer networking among CEOs of private technology companies and leaders of federal agencies, is federal agencies hiring companies that provide solutions to their problems. “Instead of simply wanting to spend money or hire a certain number of people, agencies are looking for companies that characterize themselves as solution-oriented providers and achieve results,” Giammittorio says.
Funding for IT Projects
Not surprisingly, the largest funding for IT projects is available through the Department of Defense, which accounts for 44.9% of the total IT budget. But even an agency such as the Department of Education, which comprises only 11.8% of the budget, still has $622.5 million to spend on IT projects. “Since almost every agency collects data and every piece of data needs security, opportunities also exist in agencies that you might not immediately think of. Companies should be sure to not overlook those projects since fewer companies may be bidding for those agencies’ dollars,” says Wine.
Launching a Program
To help streamline and accelerate the process of acquiring all the certifications and clearances necessary for cybersecurity and
cloud computing experts, the federal government has launched the FedRAMP program. FedRAMP is intended to ensure consistent quality among the companies that will provide cloud service to the government agencies that need them. Rather than requiring a company to become certified by each agency with which it will work, businesses can be certified to work with multiple agencies by simply following a process through which the FedRAMP Joint Authorization Board reviews all security assessments.
Getting in on the Ground Floor
Since it is often easier to get started with an agency when a project is just being launched, companies should keep informed about new government initiatives within their areas of expertise. Wine notes that a very effective way for a company to do business with the federal government is to start out as a sub-contractor to a larger company or a disadvantaged business already working in the space. “This allows the company to overcome the typical barriers to entry and develop a track record with the government that will increase their odds of earning future opportunities on their own,” says Wine.