{"id":17572,"date":"2017-11-22T16:27:55","date_gmt":"2017-11-22T16:27:55","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2017\/11\/22\/unintended-consequences-modernization-can-lead-to-monopolization\/"},"modified":"2026-08-08T04:46:09","modified_gmt":"2026-08-08T04:46:09","slug":"unintended-consequences-modernization-can-lead-to-monopolization","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/acquisition\/2017\/11\/22\/unintended-consequences-modernization-can-lead-to-monopolization\/","title":{"rendered":"Unintended consequences: Modernization can lead to monopolization"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">As the federal government moves to more efficient and cost-effective modernization efforts, an unintended side effect may be the creation of industry monopolies within certain government markets, as contracting requirements and mandatory governmentwide contracts limit the pool of qualified private sector contractors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Recently, industry groups have raised concerns that Department of Defense cloud initiatives will favor one cloud provider and create a monopoly in that market, claiming that details of a request for information on accelerating cloud adoption within the department leave room for only one cloud provider.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe RFI raises several concerns related to its potential impact on the federal market for providers of cloud services. In particular, the level of specificity in the RFI appears to be directed toward a single provider result,\u201d wrote the Coalition for Government Procurement. \u201cDoD, as a purchaser is unique, unlike not only a typical commercial customer, but also other federal agencies, as its needs are mission-focused, diverse and dynamic across its services and numerous agency components. Recognizing DOD\u2019s diverse needs and mission requirements, it is not clear why the RFI would signal an approach that could eliminate the potential for multiple cloud services providers from the DoD market.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to the industry groups, a single cloud offering not only favors one provider with the massive weight of the DoD customer base but it also creates a less successful cloud infrastructure within the department, as different clouds are often better suited for select categories of work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cGiven DoD\u2019s unique tactical mission, you should find greater value in hybrid cloud offerings that are more secure, more scalable, and deployable for our unique war fighter needs,\u201d wrote experts from the IT Acquisition Advisory Council in response to the RFI. Such experts include Tony Scott, former federal CIO; Maj. Gen. Dale Meyerrose, former CIO for the Office of the Director of National Intelligence; John G. Grimes, former DoD CIO; and Marv Langston, former Navy and DoD CIO.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The experts from IT-AAC also said that the current process for cloud accreditation in the federal government, FedRAMP, presents a barrier to new innovators breaking into the market.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cOn risk management, the current FedRAMP and ATO processes are too cumbersome and relies too heavily on green fields testing that fail to consider the significant body of knowledge and testing results emanating from Fortune 1000 companies,\u201d wrote the IT-AAC experts. \u201cThe requirement to have an agency sponsor a new cloud offering to get an ATO creates a significant barrier to innovation and could lead to a near monopoly and duopoly with a dominant leader.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Defense services contracting recently <a href=\"https:\/\/www.federaltimes.com\/acquisition\/2017\/11\/06\/how-amazon-stands-to-almost-gain-a-monopoly-for-federal-procurement\/\" title=\"\" class=\"selected-link\">came under scrutiny<\/a> through the National Defense Authorization Act, specifically a clause in the House-passed version of the bill that would move DoD purchases from off-the-shelf products to online marketplaces that would favor industry behemoths like Amazon that already have established marketplaces with a wide array of products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThese portals function like mini-marketplaces, ensuring that the buyer gets the best price without a lot of red tape. Using these portals has the added benefit of allowing DOD to track and analyze procurement data. Any business will tell you that this \u2018spend analysis\u2019 is critical to efficient operations,\u201d the House Armed Services Committee wrote in their summary of the bill. \u201cFor the government, that kind of transparency and accountability would be revolutionary.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The clause was ultimately not included in the joint House-Senate conference of the bill, but reveals a congressional inclination to prioritize efficiencies and cost savings that favor a very small number of companies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Government procurement as a whole has been moving toward more of these governmentwide solutions that save money and time by offering a predetermined catalog of services and providers, such as the Office of Management and Budget\u2019s best-in-class designations and the General Services Administration\u2019s governmentwide acquisition contracts and Schedule 70 IT contracts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAs a policy matter, mandatory contract vehicles could lead to significant risk for government and industry. Without vigilance, a well-intended cross-functional team could designate \u2018winners and losers\u2018 through mandatory contract solutions for customer agencies and contractors in an attempt to manage the market. Such an approach can limit access to ongoing commercial competition and innovation, as well as negatively impact the small business community,\u201d the Coalition for Government Procurement wrote of best-in-class designations in a December 2016 blog post.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To be sure, these initiatives also make it significantly easier for agencies to procure certain services, and prevent the redundancy of having each agency negotiate their own contract with the same service provider.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some GWACs also favor traditionally disadvantaged businesses, such as the Alliant Small Business vehicle and the Veteran-Owned Small Business (VETS) vehicle. According to the GWAC dashboard, total obligated sales across the 8(a) STARS II, Alliant, Alliant Small Business and VETS GWAC contract vehicles total over $6 billion across 661 task orders.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As the federal government moves to more efficient and cost-effective modernization efforts, an unintended side effect may be the creation of industry monopolies within certain government markets, as contracting requirements and mandatory governmentwide contracts limit the pool of qualified private-sector contractors.<\/p>\n","protected":false},"author":7,"featured_media":30788,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":6,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[104,106,31,33,6],"tags":[],"coauthors":[2853],"class_list":["post-17572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-acquisition-update","category-daily-brief","category-home","category-newsletters","category-acquisition"],"acf":{"subheadline":"","legacy_arc_id":"2FAZUYANJBADHCU6BXVBX2SW44","arc_canonical_url":"\/acquisition\/2017\/11\/22\/unintended-consequences-modernization-can-lead-to-monopolization\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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