Feds could seek more biz savvy

The Office of Management and Budget's requirement that agencies justify information technology expenditures with business cases opens a door for contractors who can help the agencies create them.

Companies that can show agencies how to think as the corporate world thinks can build considerable good will and help ensure that projects get funded, said Howard Stern, senior vice president of Federal Sources Inc.

The new requirement is changing the landscape for vendors, who will find government contracts to be less of a revenue guarantee than they have been, Stern said at a seminar he co-hosted last week in Vienna, Va. Consultant Bruce McConnell, president of McConnell International LLC, also hosted the event.

"You have to look at who you're selling to and how their business case is being presented," Stern told a small audience of contractors. "Otherwise, you're wasting your time."

OMB isn't kidding, Stern said. Earlier this year, the agency put more than 700 projects worth $21 billion on an at-risk list, demanding better business cases before providing funds. The agency will refuse to release funding for projects that officials deem poorly supported.

"There are going to be some vendors who have been doing something with a legacy system for 20 years, and it's not going to get funded," Stern said. "The paradigm shift is significant. Most companies in the market haven't thought about it."

"This gap between agencies' ability to adequately produce these business cases is an opportunity for you to help them," McConnell said at the seminar. "If you know what's in the [business case], you can make a winning proposal. You're hitting all the hot buttons."

The demand won't go away, McConnell added, even when the Bush administration leaves office in 2005 or 2009. It's built into the budget process.

Agencies do want help from private-sector firms, but vendors should not expect a quid pro quo when contracts are awarded, said Debra Stouffer, vice president of strategic consulting services at DigitalNet Government Solutions, a managed network services company in Herndon, Va. She was chief technology officer at the Environmental Protection Agency last year and headed capital planning and investment management for the agency's 2004 budget request. All of the EPA's business cases passed OMB muster, she said.

"Most agencies contract out for assistance because they aren't necessarily staffed to do all that work themselves," she said. "Industry can provide resources to the government to ask the right questions and help them document plans, processes and solutions so that it addresses all the requirements OMB has laid out. Government has to answer those questions. The government determines what it will invest in and why."

While with the EPA, Stouffer hired several consulting firms to help develop the agency's business cases. She left in February to do much the same work from the private-sector side.

Companies won't have the power to engineer a business case that makes their product look like the best choice, she said. "Companies that are producing and selling products should be marketing those products to the government. It's incumbent on the government to stay informed and understand their alternatives."

The concept is so new, many vendors say they haven't figured out how to make use of it. "We are always willing and ready to help our customers," said a spokeswoman at reseller GTSI Corp. "We are looking at this, but aren't ready to speak to the subject yet."