This story is part of an exclusive look inside the projects funded by the Technology Modernization Fund. To see the other stories in this series, use the main navigation page.

What impact has the TMF loans made over the last one to two years?

The Technology Modernization Fund is an innovative tool to enable IT modernization across the federal government. The TMF has funded projects to modernize legacy systems, expedite the adoption of commercial capabilities, and support the development and use of shared services across federal agencies. An example is the Labor Department’s Labor Certificate Processing Modernization project that highlights the impact that the TMF is making. This project digitizes a paper-based visa labor certification process with a modern and efficient “e-certification.” The modernization project also creates a shared data hub that improves inter-agency collaboration and communications. The combined focus on both the data and digital strategy delivers significant operational improved in the quality, consistency, and availability of the mission centric data for Labor and their partner federal agencies.

How often do the TMF Board and OMB receive updates on the projects?

TMF funded projects make quarterly updates to the board. Additionally, the TMF Program Management Office often communicates more frequently with the agency project team. The most significant trend from these quarterly reviews is the importance of business and technology leaders working together to solve modernization challenges.

How much money has been paid back from the TMF loans so far?

Federal projects funded by the TMF are paying back loans according to their approved project plans. When an agency repays TMF funds, those funds are then returned to the TMF program to be made available for reinvestment in future modernization efforts as approved by the board. The TMF Board continues to review and approve projects for investment. The latest project allocates $15 million to Customs and Border Protection (CBP) to modernize the agency’s 30-year-old collection tool, the Automated Commercial System. This system is CBP’s last remaining mainframe system and runs on 3.9 million lines of COBOL code. The modernization not only improves the long-term supportability of the system but also gives CBP the ability to better meet its mission.

Do OMB or the Board have any concerns about pay back of the TMF loans?

No — each project proposal is considered, in part, based on its ability to repay the loan. As part of the proposal process, federal agencies also commit to repaying the loan. The Board and the TMF Program Management Office frequently communicate with each approved project team which helps identify any potential future issues. If agencies find they need to adjust the repayment amounts or schedule, they are able to request approval through the Board. In addition, administrative mechanisms are in place that would enable the TMF to recover any awarded funds an agency was not able to repay.

How are the Board and OMB sharing those lessons?

As a requirement for an agency to be awarded TMF funds, each project is required to produce a “playbook” at the conclusion on their modernization effort. The playbook also encompasses a variety of perspectives and lessons learned from the modernization project. Knowledge is also shared through the TMF Project Management Office team consulting with agencies preparing to make a new proposal to the Board, through other TMF Board members who are themselves federal chief information officers, and through forums such as the CIO Council.

How many projects has the Board reviewed for possible loans over the last two-plus years?

Federal agencies have submitted over 50 project proposals, totaling more than $550 million, to the TMF Board. The board has approved 10 of those proposals. Each project proposal represents a transformative modernization effort that has unique technical, financial, and mission-focused objectives for the Board to consider. The TMF Board evaluates each unique project proposal using the open, transparent, and fair process shared online at tmf.cio.gov.

This story is part of an exclusive look inside the projects funded by the Technology Modernization Fund. To see the other stories in this series, use the main navigation page.

An update on the project:

Five legacy mainframe hosted systems fall within the framework of the Department of Housing and Urban Development’s Unisys migration program. Three of the systems are Single family/Federal Housing Administration (FHA) applications:

• Computerized Homes Underwriting Management System (CHUMS),
• Single Family Default Monitoring Subsystem (SFDMS)
• Credit Alert Verification Reporting System (CAIVRS)

These are key applications in supporting the FHA’s $1.3 trillion mortgage insurance program.

All three of the housing systems’ code and databases have been transformed and are undergoing testing cycles that include functionality, integration, user acceptance and performance testing. Currently, the housing applications are all on track to go-live into production in the beginning of Q3 of fiscal 2021.

The two financial applications are Line of Credit Control System (LOCCS) and Program Accounting System (PAS).

LOCCS is a mixed financial system that services more than 100 major HUD program areas, 68,000 grantees and controls payments for over 100,000 projects.

In the fourth quarter of fiscal 2020, PAS data and functionality was successfully merged into the LOCCS system and the mainframe version of the PAS application was decommissioned. LOCCS is in the databases that have been transformed and are undergoing testing cycles which include functionality, integration, user acceptance, and performance testing. LOCCS is still in the modernization phase undergoing code conversion and database migration. LOCCS is on track to go-live into production in the end of Q4 of fiscal 2021.

What has HUD used the money from the TMF Board for?

HUD used the $3.85 million of the TMF funding to leverage existing contracts for Phase 1 of the program and awarded a two-year $10 million contract through GSA for Phase 2.

How much faster has the TMF loan enabled HUD to move with modernizing each its project?

Prior to the Unisys migration project TMF approval, HUD had previously been unable to obtain budget approval for any project that would allow for the decommissioning of the Unisys mainframe.

Consequently, this TMF approval has allowed HUD to successfully move forward with this effort after several years of delay.

Has HUD paid back any portion of the loans?

HUD originally requested and was allocated $20,000,000 for this project. HUD leadership’s strong commitment to completing this mainframe migration initiative prompted the allocation of additional internal funds to reduce the requested TMF allocation to $13.85 million. In compliance with the agreement between the TMF and HUD, the agency has made two payments to the TMF — the first in fiscal 2019 and the second in fiscal 2020. The total amount HUD has repaid to date is $2.06 million. HUD’s agreement is based on a five-year repayment schedule.

How is HUD determining how much money it’s saving?

The Unisys migration project TMF cost savings is primarily due to the decommissioning of the Unisys mainframe and the elimination of infrastructure hardware, software and labor resources for this platform. This project will significantly increase HUD’s ability to protect sensitive information.  Transforming from an on-premise physical hardware environment to a cloud virtual machine environment is a huge improvement in consolidating and modernizing the infrastructure.  The project will also reduce costs in various areas including licenses, operation and maintenance, and end user support, resulting in an estimated annual savings of $8 million.

What advice would HUD give to other agencies who are considering applying for a TMF loan?

HUD would recommend agencies apply for TMF, especially for any large, multiyear projects. While the TMF does require additional oversight and reporting, the support from the TMF Project Management Office and the board has been very beneficial and has eliminated funding barriers that HUD has experienced previously.

An update on the project:

The department originally requested and was allocated $15,217,096 to secure large-scale operational benefits and costs savings by completing the consolidation, upgrade, and migration effort for the 26 remaining on-premises systems. Due to the strong support for this project at all levels of the organization, several DOE components moved forward with migration efforts using internal funding identified following the TMF award, while DOE worked through a bid protest of the IT support services contract to be used for the larger migration effort, which was successfully adjudicated in favor of the department. DOE has also identified 2,201 mailboxes that are able to be decommissioned, rather than migrated, due to the elimination of secondary email systems and other efficiencies. In addition, two sites decided to self-fund their migrations in Spring 2020, allowing DOE to further reduce the funding needed from the TMF to complete the project. The revised project scope is to migrate 18,560 mailboxes to the cloud at a cost of $3,743,702.

What has Energy used the money from the TMF Board for?

Its total TMF award was for $3,743,702 and to date, $2,902,121.05 is spent. The first incremental transfer of $2,226,965 and second incremental transfer of $1,079,626 are complete, for a total of $3,306,591 transferred to the agency. Third transfer of $437,111 is in process. The agency has awarded initial contract actions.

Has Energy paid back any portion of the loans?

No data available

How much faster has the TMF loan enabled Energy to move with modernizing this project?

Without this funding, Energy would need to conduct the migration of the remaining systems using a piecemeal approach subject to fund availability. However, with support from the TMF the project can be conducted as a single effort and can be completed in three years. By the end of this project the department will have migrated all on-premises email systems to a cloud email software-as-a-service solution. Energy anticipates it will have a greater ability to serve its mission more quickly across sites and capabilities, which will positively impact the American people. The operational benefits of this project include cost savings, increased efficiency, improved cyber posture, and decreased operational risk.

The identification of additional internal funds allowed Energy to continue making progress on the goals of the original project scope during the adjudication of the bid protest. The department will still achieve the full benefits of the original TMF proposal through the use of internal funds and the reduced TMF allocation, and the scope change makes available TMF resources that can be reallocated to additional project proposals.

An update on the project:

The EEOC is modernizing its nearly 20-year-old Integrated Mission System (IMS), the primary tool used to carry out the agency’s mission to prevent and remedy unlawful employment discrimination and advance equal opportunity in the workplace. Modernizing IMS will enhance and transform the way EEOC serves the public. IMS currently records information relating to private sector charges filed with the EEOC and 92 state and local Fair Employment Practices agencies (FEPAs) – in fiscal 2019, the EEOC received 72,675 private-sector charges. IMS is also used by EEOC program office personnel handling litigation and for federal sector complaints, hearings and appeals.

EEOC is approximately half-way into the first phase of this program, at the end of which they will deliver private sector charge applications to internal agency staff and their FEPA partners.

What has EEOC used the money from the TMF Board for?

EEOC is using the entirety of the TMF investment for contract resources, including:

• Project, scrum and technical leads,
• Analysts,
• Developers, and
• Test, release, documentation and accessibility specialists.

The agency is utilizing five existing blanket purchase agreement contract holders for these services, which were awarded prior to the TMF proposal.

How much faster has the TMF loan enabled EEOC to move with modernizing its projects?

Without the TMF funding, the EEOC typically adopted a round-robin approach to resource allocation, wherein they attempted to cycle through the technical needs of our multiple programs. In 2015, for example, the agency focused its new development efforts on its federal program. In 2016-2018, it focused on private sector programs, specifically the development of online constituent services. In 2019, the agency shifted some resources back to the federal program to further develop online services for agencies and their employees. Other mission programs, such as litigation and outreach, continued forward with limited technology investments.

Additionally, a dedicated funding source for this modernization effort has enabled EEOC to focus on replacing rather than “building around” its antiquated system.

Has EEOC paid back any portion of the loans?

They received their first installment of $2 million in January 2020. The agency is supplementing that amount with $750,000 annually ($1.5 million, in total) from its development, modernization and enhancement (DME) budget over a two-year development/deployment period. This approach enables the agency to focus a set of resources on modernizing its core charge/case management system while not “starving” other mission-related programs that also have goals and requirements.

Loan payback begins in fiscal 2021 and, should EEOC earn the second $2 million tranche, will conclude in fiscal 2026.

How is EEOC determining how much money it’s saving?

The payback model for this program relies on significant savings from three areas:

1. Elimination of enterprise software licensing for the legacy system being modernized,
2. A decrease in annual operations/maintenance contract expenses from the migration from a proprietary platform to open-source and cloud-based services, and
3. Annual development/modernization savings that are the result of not requiring two discrete skillsets for the legacy and modernized systems.

The EEOC expects to achieve additional benefits from this modernization effort, including lower end-user support costs, reduced postage and records storage fees, and productivity gains for its investigative and adjudicative processes. These additional benefits have not yet been quantified or included in their savings assumptions.

How is EEOC sharing or plans to share its lessons learned from these TMF projects?

As part of their agreement with the TMF Board, EEOC will develop a formal playbook that includes configuration timeline, process documentation and metrics for conducting case management modernization and migrating from a recordation-based case management system to an event-driven case management system.

What advice would EEOC give to other agencies who are considering applying for a TMF loan?

From their perspective, the TMF’s process and board’s questions, input and follow-on activities were every bit as valuable as the funding. EEOC’s advice to other small agency chief information officers is to engage with the TMF, to at least learn more about the process.

An update on the project:

The Technology Modernization Fund award for the Labor Department was used to supplement the modernization of the Foreign Labor Application Gateway (FLAG) system, which launched in January 2019. FLAG replaced the previous system used to certify temporary work visas, resulting in the creation of a digital boarding pass to easily share information across federal agencies, save costs and streamline the overall process. DOL is the first step in the entire visa certification process.

In particular, the TMF funding supported the implementation of the data hub that enables sharing of user information and case data across multiple government systems. The FLAG system uses Login.gov as a common authentication system to share and display user information and authoritative data between the Department of Labor (DOL), the Department of State, the Department of Homeland Security and the Department of Agriculture. In July 2020, USDA’s Farmers.gov portal was integrated with the FLAG system using the data hub. Now farmers are able to access in near real-time the status of their applications no matter which portal they login to — FLAG or Farmers.gov. As a result, agencies can “subscribe” to different data streams from FLAG and become consumers or producers of data, allowing them to push or pull data from the data hub directly. This new architecture streamlines data sharing across multiple agencies in an efficient manner, and provides employers and applicants access to the same information in real-time.

What has Labor used the money from the TMF Board for?

DOL issued a contract to Booz Allen Hamilton on April 29, 2019, to build the IT infrastructure to support the creation of a data hub, which shares data across other government agencies in near real time. The data hub also allows for the sharing of information across employers and applicants across all five temporary work visa certification programs.

How much faster has the TMF loan enabled Labor to move with modernizing the project?

The TMF funding allowed DOL to accelerate the modernization of the temporary work visa certification system in a condensed time frame, and without it, the project would have become a multi-year long project. It also allowed DOL to ensure the continuity of visa certifications for seasonal workers during the pandemic, which could have been interrupted and affected the economy as the previously used printing offices would have been closed.

The previous system was a 10-year old legacy system and modernizing it with the new FLAG system enabled DOL to deploy a digital labor certification process across all five visa application programs throughout 2019:

• CW-1 (April 2019)
• Prevailing Wage (June 2019)
• H-2B (July 2019)
• H-2A (October 2019), and
• H-1B (October 2019).

For instance, the SeasonalJobs.dol.gov website, which is FLAG’s advertising platform for seasonal job openings, deployed in December 2018 replacing the previous public job registry website. FLAG’s data hub infrastructure also went live in May 2020, sharing H-2A agricultural worker certification data with Farmers.gov, the Agriculture Department’s portal to streamline American farmers’ access to the labor certification process.

Has Labor paid back any portion of the loans?

The department has begun to repay the TMF loan, submitting the first payment on June 25, and expects to complete repayment in fiscal 2025.

How is Labor determining how much money it’s saving?

The previous legacy system for temporary labor certifications utilized expensive and specialized blue security paper, which was used to mail certifications between DOL printing offices. The new FLAG system for temporary visa labor certifications digitized the entire process and eliminated the use of the blue security paper allowing for a more efficient and effective process for employers and applicants. The FLAG system improves data accuracy, streamlines processes, shares data across federal agencies, and provides an improved user application experience. As a result, FLAG saves millions of dollars annually by eliminating the special-order blue security paper and associated mailing costs, and permits certification issuance from any worksite, no matter how remote. FLAG also reduces manual reviews of applications by 67%, automatically processes 97% of H-1B applications; and handles peak filing seasons without overload, having issued over 600,000 foreign labor certifications decisions in 2019.

How is Labor sharing its lessons learned?

The department shares lessons learned with other government agencies through a variety of avenues and channels including CIO Council meetings, public speaking engagements and social media. Additionally, the Department of Labor has engaged interfacing agencies such as U.S. Digital Service, the U.S. Citizenship and Immigration Service and State to share TMF project capabilities and lessons learned with their functional and technical audience. Labor also discussed its IT strategy and lessons learned through media interviews, podcasts and website articles on DOL.gov surrounding their IT modernization efforts.

What advice would Labor give to other agencies?

The Technology Modernization Fund Program Management Office (PMO) is a major asset to organizations considering TMF funding. The PMO can assist agencies in proposal development and building a strong business case to secure TMF funding. It also assists with project transition and execution. TMF funding is a very valuable tool for agencies as it can be used to fund IT modernization projects and position them for success, while also offering budget flexibility with a five-year repayment window. The TMF funding process is incremental in nature as it ensures certain milestones are met before the next phase of funding occurs for awarded projects. It also provides access to talent to enhance project teams and help overcome challenges.

This story is part of an exclusive look inside the projects funded by the Technology Modernization Fund. To see the other stories in this series, use the main navigation page.

An update on each of the projects:

With respect to Farmers.gov, the analysis and proof of concept are complete. We’ve found tremendous value in the comprehensive analysis and its usefulness for our process improvements and IT modernization efforts, ditto the proof of concept. A formal determination on next steps is being made. As for the Emergency Watershed Protection Program, that effort is complete. This project provided strong lessons learned for our planned, expanded cloud utilization efforts.

What has USDA used the money from the TMF Board for?

This is how the funding has been used for each of the investments:

How much faster has the TMF loan enabled USDA to move with modernizing each of these projects?

The Technology Modernization Fund loan was an accelerant, and depending on the project, helped get funding placed sooner than normal. The TMF loan also placed additional — and important — executive attention and oversight on the projects. Without the TMF funding, both projects would likely have been tackled in later budget cycles. As an example, new, broader, cloud efforts would have included the Emergency Watershed Program.

Has USDA paid back any portion of the loans?

Here is the information for the three investments with the TMF:

Farmers.gov portal

• USDA was awarded $10 million from the TMF in July 2018
• USDA borrowed $4 million from the TMF in August 2018
• USDA made its first repayment to the TMF for $103,000 in August 2019, and its second repayment for $1,030,000 in August 2020

Infrastructure Optimization and Cloud Adoption

• USDA was awarded $5 million from the TMF in November 2018
• USDA borrowed $500,000 from the TMF in February 2019
• USDA used $250,000 for the NRCS Emergency Watershed Protection in April 2019
• USDA made its first and final repayment to the TMF for $515,000 in September 2020

Agricultural Marketing Service’s Specialty Crops Program

• USDA was awarded $8 million from the TMF in December 2019 and borrowed $2 million from the TMF that same month
• USDA borrowed $2.5 million from the TMF in April 2020
• USDA borrowed $2.5 million from the TMF in September 2020
• USDA will issue its first repayment for $515,000 in August 2021

How is USDA determining how much money its saving?

For cloud, it is measured by a reduction in hosting costs. With respect to the Farmers.gov, many of the benefits will be accrued through cost avoidances. For example, by improving workflow and system efficiencies the agency’s field staff will spend less time completing program enrollment and management activities, reducing duplicate data entry, and improving the customer experience.

How is USDA sharing its lessons learned?

 USDA is expected to, and has done so, on a recurring basis, provide updates to the TMF Board about project status, lessons learned, etc.  Lessons learned and their “playbook” are expected to be provided and subsequently published by the TMF Board for other agencies to read and use.

What advice would USDA give to other agencies?

USDA recommended that other agencies think clearly about the projects’ expected outcomes, the clear identification of savings and the payback plan, and to ensure that they have a strong project team assigned to it along with internal executive oversight in place.

An update on each of the projects:

NewPay

In response to the President’s Management Agenda and Cross-Agency Priority Goal on Shared Services, the General Services Administration (GSA) launched NewPay to modernize federal payroll services and ensure that employees’ payroll experience is consistent government-wide. Through NewPay, the government is deploying, for the first time, a standards-based software-as-a-service (SaaS) platform that all agencies can utilize to deliver payroll in a timely, reliable manner to the federal government’s 2.2 million civilian employees. In 2018, GSA awarded a NewPay blanket purchase agreement to configure commercial, off-the-shelf-based, SaaS solutions capable of managing time reporting and payroll across the government’s 300-plus different pay plans.

Application modernization

In 2018, GSA-IT Launched the application modernization project as an initiative to jump-start transformation and migration of agency systems from proprietary to open source technologies. The transformation simplified integrations with other systems; enabled greater agility, resiliency, scalability and performance, reducing the risks and lowering the cost of operations.

Additionally, GSA-IT created a playbook and has successfully used the process for other, non-Technology Modernization Fund-supported development and modernization projects.

What has GSA used the money from the TMF Board for?

NewPay

GSA’s NewPay Program utilized TMF funding to support a number of initiatives related to the technical design and development of the SaaS solution. In 2018, GSA awarded a NewPay BPA to configure COTS-based SaaS solutions capable of managing time reporting and payroll across the government’s diverse portfolio of pay plans and in 2019, GSA awarded task orders to support the development of a technical minimum viable product (MVP) for payroll only. Links to both award announcements are below:

• BPA announcement
• Task Order announcement

Application modernization

GSA-IT used the TMF funds and leveraged existing contracts to modernize 11 applications and create the playbook. Three of the efforts completed during the first pilot phase in 2019, and the remaining eight are in process to complete before the end of fiscal 21.

How much faster has the TMF loan enabled GSA to move?

NewPay utilized the TMF award to provide foundational support to design and configure the technical MVP for payroll calculation and allowed work to start and progress in an immediate fashion.

Application modernization

This work and effort would not have been possible without these additional funds.  Specifically the playbook that has been key for other efforts.

Has GSA paid back any portion of the loans?

Yes, the GSA NewPay Team made its first payment of $500,000. The GSA NewPay Team has an annual schedule of payments through fiscal 2024.

Application modernization

GSAIT’s first payment of approximately $4 million is in progress. GSA-IT has been able to meet the initial commitments with only the first two tranches of TMF funds. Therefore, GSA-IT will not be taking the third installment of the award.

How is GSA determining how much money it’s saving?

NewPay

The GSA/NewPay team anticipates cost savings/avoidance will be realized upon completion of the payroll and time and attendance technical functionality and full customer migration to such solutions. In learning from the development process, the GSA/NewPay team is identifying other key variables and cost factors which could drive cost avoidance and opportunities to be more efficient in payroll management and operations.

Application modernization

GSA-IT is tracking the technology license footprint and future labor cost avoidance, but will not know the exact amounts until negotiations and contracts are updated in the next few years.

How is GSA sharing its lessons learned?

Application modernization

Through playbooks published at Tech.GSA.gov as well as briefing the Federal CTO Innovation Council.

What advice would GSA give to other agencies?

General Response

The TMF Board is a high-caliber group of technology executives from across the federal community, and they are thought to have stated that they are primarily interested in investing in projects that have some kind of govternmentwide applicability, so the agency could advise those who follow in their footsteps to highlight and focus on describing the broader implications of the specific project at hand.

Based on the way the TMF payback rules are structured currently, it is very important that an agency have a good grasp on how it is going to pay back the TMF funds, i.e. known customers, reliable revenue stream, etc.

NewPay

Make sure organizations consider customer impacts and constraints, complexity, and risk when designing their payback model.

Application modernization

Make sure the payback model is approved at the highest levels before accepting the TMF loan.

CLARIFICATION: Federal News Network has learned that Don Hadrick has left HHS and taken a new job with the Department of Housing and Urban Development in March 2020. 

It’s been 18 months since the Department of Health and Human Services accused four executives in its Program Support Center of wrongdoing.

Since April 2019, HHS decided Al Sample, the well-respected head of PSC; Bill McCabe, the chief financial officer and director of the Financial Management and Procurement Portfolio; Patrick Joy, the head of PSC’s contracting activity; and Donald Hadrick, the chief supervisory contracting officer, should remain stuck at home, collecting their pay and waiting for a decision by investigators.

HHS accused the four executives of alleged contracting problems, including a “missing” $40 million–which was later determined by the Office of Management Budget not to be “missing,” shortcomings with how PSC handled classified information through the DD-254 form process, and an overall lack of policies and procedures and legal authority to conduct assisted acquisitions for other agencies. HHS escorted the four executives out the building two springs ago.

In November 2020, at least three of them seem no closer to getting their situation resolved.

One source, however, said HHS has decided to fire Joy in a classic “CYA” move.

“The investigation found no wrongdoing of the four people,” said one source with knowledge of HHS and PSC, who requested anonymity for fear of reprisal. “The decision has been made to fire Patrick Joy. It was made by a panel which was led by Jay Tyler, the CFO of the Food and Drug Administration. I’m told Patrick will appeal that decision. I think the reason why they decided to fire Patrick was a CYA move because after an18-month investigation, they found nothing. They are probably worried about getting sued by all four men. This is a saving face moment for Scott Rowell, [the assistant secretary for administration].”

Joy, who is a well-respected acquisition executive and worked for HHS for almost 30 years, declined to comment for the story.

As for the others, Sample, who had been PSC’s executive director for more than four years, McCabe, who received the Meritorious Presidential Rank Award in 2015 and also worked as CFO of the Nuclear Regulatory Commission, and Hadrick, who worked at HHS for more than 20 years in contracting, they are stuck at home collecting a check and waiting for a decision. Sample declined to comment, and McCabe and Hadrick didn’t return email requests through LinkedIn for comment.

Contractors still waiting to be paid

As the case made by Rowell and James Simpson, the deputy assistant secretary for acquisitions, fell apart, HHS now is reaching for any reason for why it wasted more than $650,000 a year in salaries paid to the four executives to sit home and wait, while they also put more than $1 billion in federal contracts at risk after PSC stopped offering assisted acquisition services in 2019. The agency continues to this day to delay payment to contractors, causing additional pain on top of the current problems caused by the pandemic.

Industry sources say contractors still are waiting to get paid as PSC plays a “hide the document” game where companies provide requested documents only to have HHS legal teams ask for the same documents over and over again. Then when firms do get paid, the department asks them to accept 90 cents on the dollar in some circumstances. One reason for this may be the amount of penalties HHS has been forced to pay under the Prompt Payment Act, which sources previously told Federal News Network ranged from $4,000 to $84,000.

HHS’s actions of the last 15 months are leaving government officials, industry and now at least two lawmakers deeply troubled by the management decisions made by its executives.

Reps. Greg Walden, (R-Ore.), ranking member of the Energy and Commerce Committee and Brett Guthrie (R-K.Y.), minority leader of the Subcommittee on Oversight and Investigations, wrote to HHS Secretary Alex Azar in early October seeking answers to eight questions by Nov. 6.

“In light of the concerns related to the PSC, we are interested in ensuring and supporting HHS efforts to improve oversight and administration of the PSC, other HHS revolving funds, and any other non-HHS agency contracting actions by HHS agencies,” Walden and Guthrie wrote in the their letter.

A HHS spokesperson said they couldn’t comment on the status of Joy or any personnel, and that it “takes all congressional inquiries very seriously and will respond in a timely fashion.”

A Republican committee aide said HHS has been less than forthcoming over the past year as they have looked into the situation at PSC.

“We were trying to interact with the department on a less formalized basis than the letter to understand what’s going on. What was the basis of their legal position? What was going on with the fixing problems outlined in previous inspector general reports? What is going on with the three executives under suspension? It would be helpful to know a little background about what’s going on with this office,” the aide said. “We did have a little interaction with department on this. We traded some emails and had a briefing late last year. The department attempted to be as cooperative as they could be, but we didn’t get to what we wanted to know. The fact that they didn’t want to explain their legal position was a little puzzling. They claimed attorney-client privilege. It was strange that they were even doing this in the first place, but now saying it wasn’t legal. We wanted to hear in their words why they reached that conclusion.”

The aide added that HHS sent Garey Rice, the acting head of PSC, to brief them late last year, but he was either unprepared or unqualified to answer many of the committee’s questions.

“We requested another phone call, but we just couldn’t get it scheduled,” the aide said. “The department never refused to make it happen, but the process was going at such a slow pace.”

The committee and dozens of vendors and agencies would like a clearer explanation from HHS over their decision to stop offering assisted acquisition services.

All contracts transferred back to agencies

Even to this day, more than a year later, HHS’s lack of transparency is disconcerting.

When asked about the current backlog of contracts that need to be paid or transferred back to agencies, the spokesperson said, “PSC continues to work with requiring agencies and has processed invoices that have been properly certified by the requiring agency. No contracts remaining in the PSC assisted acquisition service need to be moved to another agency.”

While it’s good news that PSC transferred all contracts back to agencies, more than handful of vendors remain hung up.

A procurement attorney representing companies waiting to be paid by PSC, who requested anonymity in order not to hurt their relationship with the agency, called HHS’s actions “ridiculous” because vendors are being “raked over the coals for technical non-compliance issues. If you performed under the contract, you should get paid, at least some money. Slowly, it’s getting resolved, but it’s been a year.”

Another industry source said HHS owed them about $1 million and paid them only $900,000.

“It was painful,” said the industry official. “We didn’t have the finances to keep everyone working when COVID hit. We had to furlough staff for six weeks. If we had been paid by PSC, we wouldn’t have had to furlough the staff.”

Both industry sources said HHS was using delaying tactics such as asking for documents they had received three-to-six months ago, or asking for information that is rarely asked like requiring proof that the company did a certain percentage of work or whether the agency customer signed off on the end product.

“These are things the government normally doesn’t require as formal proof of acceptance to pay invoices,” the attorney said. “HHS now is asking for all kinds of paperwork, seemingly trying to find reasons not to pay the vendors. Maybe they do not have the money. We really aren’t sure why.”

Alan Chvotkin, the executive vice president and counsel for the Professional Services Council, said it seems most, or all, of the association members who were waiting to get paid from PSC finally have received money.

Chvotkin added that he’s heard from some folks inside DoD that they have been able to bring back almost 600 contracts PSC transferred back to them and worked through any challenges over the last year.

Can HHS legally support EIS award?

The first source said the recent $2.5 billion award to Verizon under the Enterprise Infrastructure Solutions (EIS) contract, however, may be opening the door to new problems. If PSC can’t provide assisted acquisition services anymore because of the “lack of legal authority,” then providing the services under EIS to the FDA or the Centers for Disease Control and Prevention or other operating divisions, which are considered legal entities outside of HHS, may be breaking the agency’s own rules.

“If their argument is PSC can’t provide assisted acquisition services then the entire EIS program is illegal,” said the first source. “In 2020 alone, PSC charged customers outside of HHS headquarters around $13 million. This was, in some ways, an effort to address the funding shortfalls PSC faces by shutting down its DoD business. PSC was short by $25 million last year because they have staff to support all that work that’s not there anymore. PSC’s overhead costs are still there, so HHS is trying to find a way to dig themselves out of a hole, which is why they are pushing EIS as-a-service model.”

The source says all of these problems come back to poor decisions made by Rowell and Simpson.

The source says Rowell, who multiple sources called a bully to internal and external executives and employees alike, is using the human resources process to remove executives and employees that disagree with him and intimidate others so they meet his demands.

“PSC is a mess. People are leaving in droves,” the source said. “PSC morale is at its lowest level ever because it’s completely chaotic and a mess.”

The Energy and Commerce Committee Republican aide said a year after HHS made a decision to stop offering assisted acquisition services, which is something they are entitled to do, there still is too much that is unknown about their rationale.

“We still do not know why there still are officials under suspension, what the impact was on a lot of procurements and contracts and what are the management concerns with PSC?” the staff member said. “When you make a big decision that the agency has been doing something for 20-plus years and now it is no longer legal and there has been a significant amount of activity developed over the years that was considered okay to do, was this the best way this could’ve been managed?”

These are questions many agencies, vendors and four executives have been wondering for the last 18 months, and it doesn’t seem anyone is closer to a clear answer today.

Editor’s Note: The CIA confirmed it made awards under C2E on Nov. 20.  A CIA spokeswoman said, “We are excited to work with the multiple industry partners awarded the Intelligence Community Commercial Cloud Enterprise (C2E) cloud service provider contract and look forward to utilizing, alongside our IC colleagues, the expanded cloud capabilities resulting from this diversified partnership.”

The CIA’s next-generation cloud contract seems ready for primetime. The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency’s governmentwide shared service faces its first big challenge.

These are two of the major story lines you should be following in the federal acquisition community.

Let’s start with the “breaking news”— multiple sources say the CIA awarded its C2E cloud computing contract to five vendors: Amazon Web Services, Google, IBM, Microsoft and Oracle.

The CIA, AWS, Microsoft and IBM declined to comment. A Google federal spokesperson said they would look into it and never got back to me.

If you want to read the tea leaves a little with me, generally speaking agencies and companies don’t decline to comment if a rumor isn’t true. They will just tell you it’s not true.

Second, it’s very likely the CIA told the companies not to talk about C2E until all the pieces are in place to announce the awards.

And third, given the Defense Department’s experience with the JEDI cloud contract, it would make sense for the CIA to be extra careful in how they roll out C2E.

As a reminder, the Commercial Cloud Enterprise’s (C2E) program objective is to “acquire cloud computing services directly from commercial cloud service providers …” at all three security impact levels. The spy agency is looking for vendors to provide infrastructure-as-a-service capabilities as well as support services. Bloomberg Government estimates the C2E contract could be worth $10 billion over 10 years.

The CIA released the draft solicitation in February and made the awards in October. As compared to DoD’s JEDI, which is now pushing three years since the Pentagon released the first draft request for proposals, it seems the CIA ran the acquisition with the speed and certainty needed to meet their goals.

The CIA cloud contract builds on its success of the C2S program, which was a single award to AWS back in 2013, which was worth a reported $600 million over 10 years.

With C2E, the CIA recognized the benefits of a multi-cloud environment, which continues to baffle many in industry why DoD continues to pursue JEDI’s single award approach.

But JEDI aside, the CIA still could face a protest as sources say one bidder didn’t make the cut. And yes, that protest could hang up C2E for years. Let’s just hope for all our sakes, the CIA procurement experts did their jobs well and they don’t face the craziness of JEDI. At least the CIA seemed to be smart enough to understand the optics of a single award.

CISA faces protest

Meanwhile, over at CISA, the first shared service under the Quality Service Management Office (QSMO), a vulnerability disclosure platform (VDP), is facing its first real challenge.

HackerOne filed a protest with the Government Accountability Office over CISA, and the General Services Administration’s, which is acting as the procurement arm, award to EnDyna to create VDP service offering.

GSA awarded the women-owned small business a five-year, $13 million contract in early October. Under the contract, EnDyna will create a centralized database that agencies can use to report, discover and take actions against cyber threat information. The QSMO will offer the platform as a shared service so agencies can meet the September Binding Operational Directive (BOD) calling for the use of a VDP platform.

“We believe the security of our national cyber infrastructure depends significantly on the efforts of security researchers. CISA’s requirements are clear on what they need in a vendor to support this bold initiative,” a HackerOne spokesperson said in an email to Federal News Network. “We can confirm that we have filed a protest challenging the award to EnDyna to ensure eligibility requirements to carry out this vital task are fully met, and that the vendor selected can support the work CISA is entrusting them to do.”

HackerOne filed the protest on Oct. 9 and is challenging the evaluation and arguing that the awardee should have been rejected.

Details are sparse about the protest. GSA said it couldn’t comment on the protest due to ongoing litigation.

In many ways, EnDyna winning this award was a bit of an upset. HackerOne has run several bug bounty programs across the Defense Department and GSA’s Technology Transformation Service (TTS) since at least 2016.

Cloud solicitation delayed

Keeping with the theme of this roundup, industry will have to wait a bit longer for another cloud contract.

DoD announced on Oct. 22 that it will release the final solicitation for the cloud contract for the Fourth Estate agencies, called the Defense Enclave Services (DES), later than it initially wanted.

In a notice on beta.sam.gov, DoD says the final RFP has been pushed to mid-late first quarter of fiscal 2021, meaning sometime in late November or December — happy holidays, industry!

The Defense Information Systems Agency released the draft solicitation in August for what it estimates will be an $11.7 billion contract over the next 10 years. DISA plans to use a single-vendor indefinite delivery, indefinite quantity (IDIQ) approach to, over the next decade, bring together the networks and commodity IT of the 14 defense agencies, including the Defense Logistics Agency, the Defense Finance and Accounting Service and the Defense Health Agency. DoD expects to save about $170 million from the Fourth Estate consolidation initiative.

DHS, meanwhile, issued a draft RFP for data center and cloud optimization support services.

Comments on the draft solicitation are due by Nov. 5, and DHS said a final RFP is expected in early December. The agency then would make awards by mid-March.

Another reason for industry not to take vacation in December.

“The purpose of this requirement is to acquire contractor support for the operation, maintenance, automation, optimization and modernization of the DHS hybrid cloud environment (HCE) and to offer an efficient, responsive information technology (IT) hosting environment that serves as the foundation for continued computing operations in support of the DHS mission,” the draft RFP states. “The HCE shall include unclassified and classified IT infrastructure, applications and data. The contractor shall provide data center-based hosting and IaaS obtained from both commercial and government cloud service provider (CSP) service offerings. The contractor shall provide professional services to support application operation, migration, and operations and maintenance (O&M) orders. The contractor shall provide customer service including an introduction to HCE environments and services for DHS customers.”

Karen Evans, the DHS chief information officer, said in late September at an event sponsored by ACT-IAC, that she met with the agencywide CIO council about what the priorities are over the next year.

“We are really looking at different business processes as possible use cases that allows for us to be able to really focus on the data center consolidation and cloud migration,” she said. “We are really more focused on specific business processes. What we are attempting to do, and what I’ve talked to the team about, is get technology agnostic. Some of the innovation comes around our ability to use data. It really doesn’t matter what platforms or technology you are using, it’s really the business process that we are supporting and the data we would collect as a result of that.”

She said the end goal is to get data to decision-makers regardless of the technology that underpins it.

Happy holidays industry

Along with the DHS and DISA cloud-related RFPs, two other large multiple-award solicitations are expected to come out in December.

Kathleen Sievers, a senior research manager for federal information solutions at Deltek, said on Friday at an event sponsored by Washington Technology, that the final RFPs for DHS’ FirstSource III and the National Institutes of Health’s CIO-SP4 are due out before the end of the calendar year.

Sievers said it could take up to a year for NIH to make awards under its $40 billion IT contract, while DHS could make awards under FirstSource III by March.

No surprise it’s going to be a busy next few months of contractors so sit back and enjoy the ride.

If you are saying “enough already, I get it,” with all the stories about how agencies quickly adapted to the remote work environment during the COVID-19 pandemic, join my club.

Without a doubt, there are tremendous success stories ranging from the Defense Department’s Common Virtual Remote (CVR) environment to the Department of Veterans Affairs’ ability to sustain and thrive in a telehealth world to dozens of other agencies with similar tales of industry and agencies upgrading networks, moving applications to the cloud and expanding access with an urgency rarely seen.

So like any good journalist would ask, what have you done for me lately?

Obviously, there is some facetiousness in that question as well as some truth.

The good news is early successes during the pandemic emergency now are leading to long-term changes in technology, business process and, of course, people.

Take the Coronavirus Supply Chain Task Stabilization Task Force led by FEMA and the Department of Health and Human Services.

Rear Adm. John Polowczyk, the supply chain task force lead in HHS’s Office of the Assistant Secretary for Preparedness and Response, said the creation of a supply chain control tower is giving the federal response better insights than ever before about the state of personal protective equipment (PPE).

“You can’t manage the supply chain unless you can see it. So we went to the six largest providers of medical supplies and asked them to share their data. We had six different business systems to deal with, and they all dumped their data into the cloud in FEMA. We worked with each distributor to make sure all the data lined up,” said Polowczyk at last week’s AFCEA Bethesda’s 2020 Tech Summit. “By mid-April, I could essentially could see orders from hospitals, nursing homes, first responders and other healthcare organizations to the medical supply chain. We could see how the medical supply chain was getting material in from manufacturers, what they had in their warehouses and what they were delivering to their customers. By mid-April we had the ability to understand supply chain fill rates, how the system was meeting the needs of the nation, and we could aggregate demand based on orders from customers, which we did.”

He said this data helped the government make the first estimates of national demand for personal protective equipment, and federal acquisition professionals at DoD used it to expand domestic production through the Defense Production Act (DPA).

Polowczyk said the cloud and data analytics tools now are helping the coronavirus task force prepare for what many experts are calling the third wave of the pandemic this winter.

“We have expanded this and added actual data from hospitals and long term care facilities. I now get inputs from 6,000 hospitals that treat COVID patients and about 15,400 Medicare/Medicaid nursing home facilities are telling me days of supply, how many items they have on hand and we are trying to start to use data analytics to produce individual burn rates at the county level to understand demand,” he said. “We are using epidemiological data on top of the supply chain information to get into forecasting of where the network needs to pivot to. I’m down to producing spreadsheets where we pass these and have conversations with commercial partners and the state departments of health and emergency managers where we are giving lists of hospital systems and nursing homes who are saying they are short of N-95 masks or isolation gowns or whatever.”

He credited the work of the Defense Logistics Agency, Boston Consulting Group and Navy Supply Corps reservists—about 10 people in all—in building this data analytics platform in a matter of weeks.

Polowczyk’s success story was one of several that emerged at the AFCEA Bethesda 2020 Tech Summit where the integration of technology, data, business processes and good old human know how is changing the way agencies work for the long term.

State reimagining processes

While not every story is as dramatic as the supply chain task force’s, the impact nonetheless is real.

The State Department is reimagining many of its business and administrative processes.

Stuart McGuigan, State’s chief information officer, said a cross-functional task force is looking at all technology, training, policy and processes to identify which ones worked during the pandemic, and which didn’t and need to be changed.

“It will be an agile approach so we are identifying our top recommendations and then piloting, learning, iterating, and rolling them out,” he said. “It’s not just about technology but it’s about a new way of working. So this will be a continuous process.”

The other area McGuigan said State really evolved in is accepting a minimum viable product (MVP).

He said the longer it took to develop a new capability or upgrade an existing one, the longer employees couldn’t work.

“One of the things we don’t always have in IT is a really clear focus on the MVP, what is the least amount of capability we need to put in production to enable people to get to work and no more because we have to move on to the next thing? Can we learn? Can we iterate? Can we put things in place quickly, understand whether they are working or not, and then be able to acknowledge when they are not working and fix them?” he said. “We suddenly found ourselves in an agile mode. The productivity of the team increased exponentially. I was just amazed and so impressed by how quickly the team was able to provide secure access to the applications that were needed to run the department.”

McGuigan said it’s not just IT that is more agile, but the entire organization because State is becoming a more evidence-based department.

“The ability to have information that is absolutely current to everybody who is involved and to use whatever tools are available to do that and not fussing too much about extra bells and whistles, and really focusing on the minimum capabilities was a very impressive thing to support and watch,” he said. “The Center for Analytics has been doing modeling to try to anticipate emerging events.”

He said he sees more opportunities to have diplomacy to move at the speed of technology because of digital services and tools. The pandemic forced a culture change of using collaboration software that would’ve normally taken years to get people to change their habits.

McGuigan said he sees similar opportunities for that type of culture change across the department.

These are two examples of many where agencies aren’t just taking a post-urgency breadth, but figuring out how technology, people and processes can change to sustain the initial successes of the pandemic.