2014 PSC Annual Conference Intelligence Report

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PSC Annual Conference Intelligence Report

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Partnership to Achieve Innovation Deputy Secretary of Defense Robert Work discusses the need to bring DoD & industry together >> Page 5

Convergence New survey maps convergence trend’s impact on the government market >> Page 7

Where Will Innovation Come From? A panel of government innovators share how they’re doing business unusual >> Page 11

The Next Generation of Acquisition Anne Rung, Tom Sharpe & Gen. Casey Blake unveil new approaches to tackle old problems >> Page 16


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Table of contents OPENING KEYNOTE

5 Partnership to Achieve Innovation CONVERGENCE

7 Study Shows a Fundamental Shift in Government Acquisition Luncheon Address

9 The Certainty of Budget Uncertainty: Lack of Market Clarity CLOSING KEYNOTE

10 Pollster Projects GOP Advantage in November 11 Where Will The Innovation Come From? 12 New Workforce, New Expectations 14 Oh No, Another EO? 15 The View From the Couch 16 The Next Generation of Acquisition

About PSC >> PSC is the voice of the government professional and technology services industry. PSC’s more than 375 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, PSC’s members employ hundreds of thousands of Americans in all 50 states.

We have all of our 2015 options open early, ready for reservation today! Click here for full details and reservation options.

Dear Readers: PSC is pleased to present our first-ever 2014 Annual Conference Intelligence Report, a comprehensive guide to the keynotes, panels, and discussions held at the 2014 PSC Annual Conference. It was my pleasure to chair the PSC Annual Conference Committee this year and I am proud of the agenda we put together and the crowd of nearly 500 industry and government executives we convened for these important discussions. It has been a pleasure serving this important association and working with my fellow industry executives who helped make this conference a success. As you will see in the following report, we covered a wide range of topics and program areas—from Deputy Defense Secretary Robert Work’s discussion of DoD’s budget, to our exclusive Market Connections survey on “convergence” in government acquisition, to panels on acquiring innovation, managing under executive orders, hiring the next generation of acquisition professionals, and exploring new acquisition policies and initiatives. I hope you will take the time to read our reports from the conference floor, view pictures of the event, and request their presentation slides from our membership team. You may even find some of your social media comments in these pages! I want to thank our sponsors and conference presenters for making this event possible, particularly the sponsor of this report, Delta Resources, Inc. It is only with their support that we are able to put on such a great event and make real progress toward a productive government-industry partnership. You’ll find a list of our sponsors on the next page and we hope you will join us for the PSC Council of International Development Companies Conference on November 18 at the Georgetown Marriott, and for the many events we are planning for 2015. <<

Kevin Beverly Executive Vice President, Social & Scientific Systems, Inc.

Articles by Elise Castelli • PSC Senior Manager, Media Relations and Publications Photos by Bryan Bowman • PSC Senior Manager, Marketing


PSC would like to thank all of our 2014 Annual conference sponsors diamond SPonsors

TM

Global. Innovative. Trusted.

Articles by Elise Castelli • PSC Senior Manager, Media Relations and Publications

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PSC would like to thank all of our 2014 Annual conference sponsors platinum SPonsors

GOLD and SILVER sponsors Gold

Silver

CH2M HILL Fluor Corporation IBM JBS INTERNATIONAL, Inc. MCR, LLC Salient Federal Solutions, Inc. Social & Scientific Systems, Inc. Systems Planning and Analysis, Inc. Unisys

Arnold & Porter LLP Citizens Commercial Banking Federal Publications Seminars Jefferson Consulting Group, LLC Vistronix Wyle

Event sponsors Opening Keynote A-T Solutions Opening Reception & Dinner Venable HP Enterprise Services SAIC Sunday Social The Boon Group, Inc. CliftonLarsonAllen LLP Golf Tournament JAMIS Software Corporation Capital Edge Consulting Wiley Rein LLP Government Service Administrators Monday All-Day Break Service Baker Tilly Monday Bottled Water Provider Aronson LLC Monday Lunch TD Bank

Monday Reception Avascent Eagle Ray, Inc. Sotera Defense Solution, Inc. Vectrus Chair’s Banquet ICF International Tuesday Network Breakfast & Break HeiTech Services, Inc. Information International Associates, Inc. Tuesday Bottled Water Provider Abt Associates Inc. PSC After Hours LGS Innovations AECOM Networking Happy Hour FCE Benefit Administrators, Inc. Citibank, N.A. McGladrey LLP

Technology Access Sponsor BAE Systems Thought Leadership Sponsors Market Connections, Inc. Federal Publications Seminars Accenture CGI Booz Allen Hamilton Fed Nexus Law Greenbrier Access Card Sponsor Akima, LLC Daily Digest Email Sponsor Accenture Information Management Consultants, Inc. Conference Program Sponsor Microsoft GovCon Alliance Citizens Commercial Banking PSC Mobile App SRA International, Inc.

Wine Tasting Phoenix Management, Inc. (PMI)

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The view from the floor

To see photos from all of our sessions, click here 4


conference Intelligence Report

>> OPENING KEYNOTE:

Partnership to Achieve Innovation

I

ndustry needs to help the Defense Department bring innovation and efficiency to the department’s processes, products and services as DoD navigates its difficult

budget situation while maintaining U.S. readiness, said Deputy Defense Secretary Robert Work, the opening

keynote speaker at the 2014 PSC Annual Conference. “We have to be much more nimble,” said Work. “And we

“We are under extreme stress in terms of technological superiority,” says DoD’s Bob Work.” >>Andrew howell<< @andrew_p_howell #PSCconf

have to have better connectivity with the defense industry.” 5


2014 PSC Annual COnference

We have to be much more nimble. And we have to have better connectivity with the defense industry.

Ongoing budget uncertainty, altered congressional priorities, and increasing global competitiveness means that the Defense Department must do more to both control its costs across the board and step up its innovation, he said. “Working with industry, we hope we will come up with innovative ways to see our way through, but for the foreseeable future it will be a very, very challenging budget environment,” Work said. At the same

time, “we have to spend our procurement dollars more efficiently,” he said. Piggy-backing on the September roll-out of the third phase of DoD’s Better Buying Power initiative, which aims to drive spending efficiencies, the Defense Department will shortly announce a department-wide initiative to generate innovation. “At the top we’re demanding innovation, but that hasn’t quite come all the way down through the professional acquisition

workforce,” Work said. DoD’s new innovation initiative will engage both industry and the field-level workforce in this effort to boost DoD’s capture of innovation to stay ahead of America’s global competitors and maintain U.S. dominance. “If we don’t crack innovation, with all of the innovation going on in the commercial world, and if we’re not more agile, we’re going to lose this competition,” Work said. <<

Save the date The psc Annual conference Oct. 4-6, 2015 • The Greenbrier

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conference Intelligence Report >> Convergence:

Study Shows a Fundamental Shift in Government Acquisition O

ne-fifth of government officials never heard of “convergence,” the emerging federal market trend that is blurring the lines between technology and professional services, despite increasing numbers of technology firms making their offerings available “as a service.” This disconnect is just one of many significant findings in a newly released PSC/Market Connections survey of 224 federal government decision-makers involved in selection or acquisition of IT products and services and 227 government contractor employees, regarding their perceptions of convergence and how it impacts federal procurements. On October 6, attendees of the PSC Annual Conference got a sneak peek at the survey results, which were officially released at an October 14 event. While nearly 13 percent of government officials reported they never heard of convergence, all interviewed contractors said they did, with 90 percent reporting they are very or somewhat familiar with the trend. Only 67 percent of government reported being very or somewhat familiar with convergence. “Given this gap, it is not surprising that significantly more contractors (80 percent) than government respondents (58

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2014 PSC Annual COnference

This slow adoption rate means one of two things—the government doesn’t understand the impact of convergence or they cannot overcome the barriers to implementation.

GOVERNMENT

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Perceived barriers are significantly slowing widespread adoption of converged solutions and consumption-based approaches.

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Barriers to XaaS Adoption

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percent) believe government agencies are behind the technology curve compared to the private sector,” said Lisa Dezzutti, president and CEO of Market Connections, who spoke at the Annual Conference. Despite these gaps, 70 percent of government respondents said that they believe convergence is having a moderate or high impact on their current and future plans to buy “as a service” solutions. To date, less than one-third of government respondents reported they have actually adopted “as a service” models, with software and communications topping the list of services, and platform and training at the bottom. “This slow adoption rate means one of two things—the government doesn’t understand the impact of convergence or they cannot overcome the barriers to implementation,” Dezzutti said. Among the reported barriers to adoption include security issues/risks (60 percent government, 46 percent contractor), budget constraints (45 percent government, 24 percent contractor), poorly defined requirements (36 percent government, 21 percent contractor), and lack of procurement guidance (16 percent government, 31 percent contractor). Government is also concerned about vendor or solution lock-in and unpredictable costs. Although these barriers may slow down government adoption, frustrating some contractors, there are significant external factors that may drive more rapid adoption, Dezzutti said. Among the identified benefits of “as a service” buying are paying only for what is needed (50 percent government, 56 percent contractor), scalability (43 percent government, 48 percent contractors), ability to rapidly deploy new services (39 percent government, 41 percent of contractors), and sharing of resources and cost (35 percent government, 33 percent contractors). The key to getting government to recognize these benefits more fully—and act on them—is “for industry to be more explicit about the power of these models and to educate not only their customers

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© 2014 Market Connections, Inc.

but all stakeholders in the process,” Dezzutti said. This survey is a first step in that education. <<


conference Intelligence Report >> LUNCHEON ADDRESS:

The Certainty of Budget Uncertainty: Lack of Market Clarity I

t is unlikely the downward trend in government spending will reverse any time soon, said Neal Wolin, the former deputy Treasury secretary, at the 2014 PSC Annual Conference. “The best anyone can expect is flatness,” said Wolin, who was the conference luncheon Great content every speaker. GovCon should know, If Republicans gain even if it is not all control of the Senate, good news. agencies could operate under a continuing >>Richard Kirby<< resolution until January @rjkirby601 or March, after the new #PSCconf Congress starts, he said. “The lack of clarity isn’t good for you or for the country,” Wolin said. “It makes it hard to do the business planning you need.” While it is difficult to quantify the effects of prolonged continuing resolutions, the uncertainties they create “can’t be good for the economy,” he said. “ It shouldn’t be too much to ask of government to enact our appropriations bills on time.” But whatever the result of November’s mid-term congressional elections, Wolin doesn’t believe there will be a replay of the “shameful” fiscal dramas of 2013, which so dismayed and puzzled America’s international economic partners. “There is little appetite in Washington for a fiscal train wreck,” he said. <<

The lack of clarity isn’t good for you or for the country. It makes it hard to do the business planning you need.

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2014 PSC Annual COnference

>> CLOSING KEYNOTE:

Pollster Projects GOP Advantage in November T

he 2014 mid-term elections are the Republican Party’s to lose, according to projections by GOP strategist Glen Bolger, partner and cofounder of Public Opinion Strategies. Bolger was the closing keynote speaker at the 2014 PSC Annual Conference. President Obama’s low approval rating (42 percent at conference time), continued bad news about healthcare reform, greater Republican voter interest in the election, and polls showing Independent voters leaning Republican this year, all point to

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a Republican 2014 mid-term victory in the House, and possibly the Senate, Bolger said. Republicans tend to be off-year voters, where Democrats do not, so it will hard for the Democrats to match their 2012 turnout this year, he said. However, the Republicans still face challenges due to the party’s poor public image and continued failure to make inroads among minority voters, he said. So what does this all mean for the 2016 presidential election?

“Nothing,” Bolger said. The Democrats’ huge advantage among minority voters make it more difficult for the GOP to gain an advantage in the 2016 election, he said. Also, high-electoral vote states are a solid “big blue wall,” meaning that the GOP has to win more, smaller states to approach the required 270 electoral votes. The Democrats have a lock on 18 states containing 242 electoral votes, meaning they only need to win 28 of the 183 electoral votes in play to win the White House, Bolger concluded. <<


conference Intelligence Report

Panelists: Dan Doney, Chief Innovation Officer, Defense Intelligence Agency; Michele Schimpp, Director, Center for Mission Engagement and Operations, USAID Global Development Lab; and Angela Messer, Executive Vice President, Booz Allen Hamilton (moderator). Not pictured: Bryan Sivak, Chief Technology Officer, Health and Human Services, who participated via video teleconferencing.

>> CHASING THE HORIZON:

Where Will The Innovation Come From? T

hree government innovators shared how their agencies are obtaining cutting-edge solutions needed to fulfill their missions in a world where technology disruption outpaces procurement acquisition lead times. The Defense Intelligence Agency found disconnects between those with the needs and those putting out solicitations, which often meant the agency wasn’t asking industry the right questions to get the desired outcomes. In response, it created the “NeedipedDIA” tool to allow end-users to post their requirements directly to industry and allow industry to respond directly to the customer. At USAID, the Global Development Lab was created to help discover and rapidly scale technological advances for use in the field. This allows companies to pitch innovations directly without the “kabuki theater” of the requirements process. Similarly, at Health and Human Services, the HHS Buyers

Club and HHS IDEA Lab are presenting non-traditional outlets for those with requirements to partner with potential solutions providers. While all of these initiatives accelerate

the delivery of solutions to the government, process, authorization and accountability questions remain given that they operate outside of the regular procurement process.<<

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2014 PSC Annual COnference >> Millennials:

New Workforce, New Expectations K

ids these days! They come into the workforce with more education than their forbearers. They have high self-confidence and tons of ambition. They’re team oriented and mission motivated. They’re willing to be connected 24/7. And they are completely misunderstood by the generations before them. Our panel of milliennials offered the codebook to this enigmatic group of young professionals. The keys to creating a motivated and engaged millennial workforce: providing the right tools, the right amount of flexibility, and the right mission, the panelists said. Since millennials are mission driven, it is important for companies to have a meaningful and impactful story to tell and to live up to it. They also have to equip those employees, who are used to having as much processing power in their phone as their PC, with the right tools to do the job. “You wouldn’t hire a five-star chef and give him dull knives, yet we hire $100,000 a year rock stars and give them fouryear-old, heavy laptops,” Ressler told the audience. Millennials also want to have flexibility to allow for “work-life integration,” ensuring they meet their professional and extracurricular goals, as well as family needs. This is increasingly important as these constantly connected individuals are frequently willing to be engaged with their workplace around the clock. Salary is important but tends to be far down on the list, the panelists said. Fair and competitive compensation, rather than the highest possible salaries, satisfies this generation if other needs are met. <<

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Panelists (clockwise from top left): Steve Ressler, Founder and President, GovLoop; Greg Gershman, Principal and Co-founder, Ad Hoc LLC; Dr. Courtney Kennedy, Vice President of Advanced Methods Group, Abt SRBI; and Kathy Albarado, President and CEO, Helios HR (moderator)

“You wouldn’t hire a five-star chef and give him dull knives, yet we hire $100,000 a year rock stars and give them four-year-old, heavy laptops.” >> Steve Ressler, Founder and President, GovLoop


In lieu of speaker gifts, PSC has made a donation to:

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2014 PSC Annual COnference

Panelists (from left): Paul Leslie, CEO, Dovel Technologies (moderator), Robert O’Hara, Director of Employment Law and HR Compliance, United Technologies Corporation; Anne Rohall, Executive Vice President and General Counsel, Tech Systems; and Rick Fields, Federal Chief Compliance Officer, Deloitte Services.

>> LABOR POLICY:

Oh no, Another EO? “A

re you ready for the regulatory tsunami?” is the question you should be asking after this panel explored the flurry of contractor-specific federal labor executive orders issued this year. As a result of these orders, contractors can anticipate their compliance costs to rise as much as 25 percent, a panelist estimated. To be ready, contractors not only have to read the Labor Department and FAR Council’s rules to get their own houses in order, they also need to ensure

that their subcontractors at every tier are educated about the executive orders’ requirements to ensure no violations occur. Prime contractors will be responsible for certifying all subcontractor data under many of the executive orders. Contractors at all levels have to also be aware that some of the orders conflict with existing statutes, opening up the possibility for legal action against contractors from its employees, as well as the government. Engage legal counsel now or get caught short, was the panel’s consensus. <<

The Panel says: Engage legal counsel now or get caught short. 14


conference Intelligence Report >> MARKEt ANALYSIS:

The View From the Couch

Panelists (from left): Wayne Wilkinson, Chief Financial Officer, Whitney, Bradley and Brown (moderator), William Loomis, Managing Director, Stifel; Kevin Plexico, Vice President, Information Solutions, Deltek; and Edward Caso, Managing Director, Wells Fargo Bank. Not pictured: Trae Stephens, Principal, Founders Fund, who participated via video teleconferencing.

A

s the government puts greater emphasis on price over value in procurement and as cash flow to contractors continues to tighten, our panel of market and investment analysts offered this advice for government contractors: >> Don’t go commercial. Government contractors rarely succeed in the commercial space because the business models are just too different and require full attention. Many government suppliers find it difficult to compete commercially while also

hampered by the government’s arcane way of doing things. If a company does “go commercial,” it should establish a separate entity so that it can be more agile in the commercial space. >> Don’t buy companies doing business in a skill that you are not familiar with. Instead of looking to expand

into new areas, look for companies that augment your core business. >> Don’t rest on your incumbency.

Incumbency is not as valued or as

valuable as it used to be because the government is increasingly driven by price and other market objectives. When rebidding a contract, look for efficiencies and pitch innovations that sets your business apart. >> Don’t

despair. Despite the bad news regarding the budget and sequestration, the government is still the largest market in the world, so there is plenty of opportunity for the determined and prepared company. <<

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2014 PSC Annual COnference >> Change from Within:

The Next Generation of Acquisition

Air Force Contracts DAS Casey Blake: FAR/DFAR is doctrine, and flexible for solutions if you understand how to use it. >>Daniel J. Chenok<< @dchenok #PSCconf

K

ey government acquisition leaders closed out the conference with a discussion of the new “category management” strategy the Office of Management and Budget and General Services Administration are rolling out to get their arms around the increasingly duplicative nature of government contract awards. Newly minted OFPP Administrator Anne Rung said that with over 4,000 acquisition units across government, having a central census of what is already under contract will help drive down government and contractor costs and confusion. GSA is leading the effort and has already begun work on consolidating the offerings under its Multiple Award Schedules program. FAS Commissioner Tom Sharpe said that the common acquisition platform being developed by GSA will include a database of prices paid to assist with market research and will better position GSA to assist customers. Sharpe pledged to keep an open dialogue with PSC as GSA moves forward with is ongoing consolidation of the professional services schedules. From a customer perspective, however, Air Force General Casey Blake worried that too much consolidation would not be a good thing because he wants his team to comparison shop and negotiate better outcomes. Too much consolidation could inhibit competition, he said. In addition to category management, the panel addressed PSC’s acquisition reform proposals. Rung said she strongly supports PSC’s recommendation for 360

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Panelists (clockwise from top left): Anne Rung, Administrator, Office of Federal Procurement Policy; Tom Sharpe, Commissioner, Federal Acquisition Service, GSA; Brig. Gen. Casey Blake, Deputy Assistant Secretary for Contracting, Air Force; and Kymm McCabe, President and CEO, ASI Government Solutions (moderator)

degree reviews of solicitations by winners and losers. OMB is already rolling out a version of that process with its “rate the agency” tool and hopes to work with PSC for a more in-depth review

process, Rung said. Similarly, Blake said he is already employing some of PSC’s recommendations, particularly those geared to maintaining a competitive industrial base. <<


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