The federal government has an I.T. budget of over a
trillion dollars, but how can you get in on the action?
Max Smetannikov correspondent
Servicing the federal government's $1 trillion-plus I.T. budget
is a big job, and an increasing number of Web hosts and managed
service providers are vying for a piece of the pie. Despite
adverse economic conditions, the demand for Web hosting and
managed services within the government sector is only getting
bigger. Unfortunately, getting a juicy government contract can
be a paperwork-strewn path to a migraine.
In the wake of September 11 and the high-profile fight against
international terrorism, there are many new projects regarding
disaster recovery and intelligence gathering getting started.
These projects are in addition to the ongoing demand for services
and equipment supporting "e-government" initiatives. One of
the active contract areas for Web hosts is in the development
and maintenance of large agency portals linking existing databases
with Web front ends.
Security is paramount when bidding for such projects. Some
records collected through the Web are highly sensitive, like
the personal tax information Qwest Communications (www.qwest.com)
hosts for the IRS. Other projects are noteworthy simply because
of their sheer magnitude, such as FirstGov (www.firstgov.gov),
the portal maintained by AT&T (www.att.com)
that helps consumers, enterprises, and federal employees find
their way to a wide array of online federal resources.
"I think the government requirements are becoming more complex,
based on the greater role that the Internet begins to play on
the federal level," says Chris Stelter, director of sales engineering
for AT&T Government Solutions, who has been working in this
space for 25 years.
You do not have to be a multinational corporation to sell
something to Washington; after all, the government needs everything
from pencils to tanks and from database management to managing
a global network connecting U.S. embassies. What counts is knowing
how to maneuver through the maze of federal regulations governing
relations with contractors.
Getting all of the necessary clearances can take up to a year,
and that is just the beginning. One of the biggest issues for
most service providers is finding out what the government's
needs are. The true requirements for projects are sometimes
deeply buried in political rhetoric. Because of this, some companies
have made it a point to specialize in working the government
system. Their expertise is badly needed by some companies who
cannot afford to spend the time and resources on studying the
"We don't do very much with the federal government," says
Tina Mayland, a vice president of marketing at Savvis Communications
a network operator and managed services provider, "but when
we do, it's through companies like SAIC [Science Applications
Science Applications International Corporation (www.saic.com)
is a Fortune 500 company with offices in 150 cities around the
world. The engineering and research firm has been present in
Washington for decades, and brings value to contracts simply
because of its long history of working on federal I.T. installations
and with various government bureaucracies. Although association
with a firm like SAIC is great for companies not comfortable
with selling directly to Uncle Sam, some operators find it worthwhile
to make their own investment in learning how to interact with
the federal market.
The first and perhaps most complicated step for newcomers to
the government sector must do is to get certified as a government
contractor. In order to make the process of selling to the government
more streamlined and to help track where taxpayer money is going,
the lawmakers have set up the General Services Administration
that handles all of the buying for the government. Anybody who
wants to sell anything to the federal government needs GSA approval.
Web hosting and managed services fall into two different units
- known as schedules - within the GSA.
The Federal Supply Service (FSS) handles the purchasing of
all products the government might need. From airplanes to pencils,
the FSS is in charge of approving orders for computer equipment
and software applications.
"We do have hosting elements on the Federal Supply Services
schedule, which includes things like space and certain levels
of services, such as those we provide at our CyberCenters,"
says Wes Kaplow, chief technology officer for Qwest's Government
Services Division, which has two datacenters in the Washington
metro area and has the IRS and U.S. Treasury as customers.
Most hosting services, though, are covered by the Federal
Technology Services (FTS) schedule. WorldCom (www.worldcom.com)
and Sprint (www.sprint.com)
share the master FTS contract for 2001 that covers most federal
telecom services. Along with the main telecom contract, the
federal government also awards Metro Area Acquisition (MAA)
contracts for large-scale services in major cities.
Qwest, which holds four of these contracts, has found an elegant
way to make use of government regulations that apply to specific
distributed hosting services. The firm now offers a service
dubbed managed federal hosting.
"There is an opportunity for MAA holders to offer emerging
technology or other services to the GSA in so-called crossovers,"
says Kaplow, "so you go from a metro area to something you can
Qwest's Crossover MAA FTS schedule is flexible enough to allow
Qwest to construct most types of managed hosted services for
the government, including hardware configuration, professional
services, colocation space, and other services that combine
hardware and service offerings.
Although working through GSA is the most efficient way to
prequalify for bidding on government jobs, there are ways around
getting a regular GSA certification. Akamai (www.akamai.com),
which has been recently awarded a GSA schedule contract, has
found that subcontracting to companies already in the GSA schedule
also helps get the job done.
"One of our partners in working with the government is IBM,"
says Laura Stich, director of product marketing at Akamai, "and
they've provided us with the ability to quickly and efficiently
offer our services to government agencies, prior to our own
GSA schedule award."
The real trick
Getting into the federal market space is only half of the fun.
Staying on top of very different Washington agendas is the real
ongoing challenge, as Akamai can attest.
Akamai's federal sales force went from zero to seven within
the last year, as the content and applications distributor received
requests and contracts from a number of different agencies seeking
insight into the inner workings of the Internet.
What the government will do with this information is what
makes the ongoing relationships with different agencies interesting,
as Akamai seeks to build up services to accompany its alerts
and raw performance information. Although analyzing the same
data in different ways is a great source of revenue, avoiding
getting caught by interagency politics is part of the art of
doing business in Washington.
"Different agencies have different contexts," says Avi Freedman,
Akamai chief network architect. "The CIA wants one thing; the
FBI wants another. It's interesting how people have different
agendas, and they are driven by different missions."
Navigating this maze can be made easier by joining forces with
other vendors. To grow its power base in the city, Akamai has
joined forces with two: the Information Technology Association
of America (www.itaa.org)
and the Armed Forces Communications and Electronics Association
If contracting with Uncle Sam is something your firm is considering,
similar vendors are a good place to start.