The MGT Act: A peek at the future of IT procurement
Read our latest intel on the new MGT Act here.
With the MGT act, recently passed in the House, legislators are declaring a shift from legacy technology to new, efficient, and secure IT infrastructure. Photo courtesy of Wikimedia Commons.
Read our latest intel on the new MGT Act here.
IT contractors: get ready to change gears with the introduction of the Modernizing Government Technology Act, or the MGT Act.
Following President Obama’s February announcement of a $19 billion cybersecurity action plan, the government is revving up for a massive information technology overhaul. From naming Gregory Touhill as the first federal Chief Information Security Officer, to adding the HACS cybersecurity services to GSA’s Schedule 70, federal agencies are finally waking up and saying: It’s time to take IT seriously.
Enter Congress. The Modernizing Government Technology Act (H.R. 6004) unanimously passed through the House of Representatives on September 22. That’s right – unanimously. The bipartisan bill is designed to fund the transition from expensive, insecure legacy IT systems to new and innovative technology.
The MGT Act combines the MOVE IT Act and the proposed $3.1 billion IT Modernization Fund. It sets up both individual agency working funds and a centralized fund, both meant solely for replacing and modernizing IT systems. For contractors, this means a host of new agency solicitations, IDIQs and GWACs.
The bill moves next to the Senate floor, where the technical aspects could be changed. But the goal is indisputable: The government knows it needs to purchase innovative, efficient, and secure IT solutions.
Key Takeaways from the MGT Act for Government IT Contractors
Cyber security by design
IT contractors already know that cybersecurity is more than a new trend; it’s all-important. The MGT Act considers security its top priority, specifically calling for “cyber security by design.”
Mastering cybersecurity best practices like data encryption and multi-factor authentication is vital to winning contracts funded by the MGT Act. Additionally, the request for “security by design” suggests new procurement opportunities for up-and-coming technology companies, especially those able to build security into their IT infrastructure from the ground up.
Cloud computing
The government sees the cloud as IT’s bright, efficient future. The MGT Act praises the cloud for its “efficiencies,” “cost savings,” and “greater computing power.” The proposed funds are specifically earmarked to pay for transitioning the government’s IT to the cloud. If the bill passes through the Senate, you can expect to see an uptick in cloud procurement.
Government-wide efficiency
Streamlining the government’s IT infrastructure is another major goal of the MGT Act. EZGovOpps analysts found one stated goal of the IT Modernization Board particularly intriguing:
“Identify […] opportunities to improve or replace multiple information technology systems with a smaller number of information technology systems common to multiple agencies.”
This phrase implies that the government is looking to move from individual agency IT contracts to an emphasis on GWACs and other multi-agency procurement mechanisms. For an IT contractor, this means bigger contracts and more teaming opportunities. A market intelligence tool like EZGovOpps can help you stay ahead of the competition as the government streamlines its IT systems across agencies.
Innovation over maintenance
One place the funds proposed in the bill will not be going: maintenance. The MGT Act explicitly says that agencies may not use the money to maintain existing IT systems. Additionally, the money in an agency’s fund must be obligated within three years. This is great news for companies looking for procurement opportunities: agencies will have money to spend, they’re required to spend it soon, and they can’t spend it on preexisting IT contracts.
If the bill is signed into law, expect the allocated funds to become new solicitations and RFPs looking for contractors to improve, retire or replace existing legacy systems. Innovative and modern technology will be the key to winning contracts.
Federal agencies to target
If it passes, the bill will provide procurement funding for modernization in 24 executive agencies:
| The Department of Agriculture. | The Department of Commerce. |
| The Department of Defense. | The Department of Education. |
| The Department of Energy. | The Department of Health and Human Services. |
| The Department of Homeland Security. | The Department of Housing and Urban Development. |
| The Department of the Interior. | The Department of Justice. |
| The Department of Labor. | The Department of State. |
| The Department of Transportation. | The Department of the Treasury. |
| The Department of Veterans Affairs. | The Environmental Protection Agency. |
| The National Aeronautics and Space Administration. | The Agency for International Development. |
| The General Services Administration. | The National Science Foundation. |
| The Nuclear Regulatory Commission. | The Office of Personnel Management. |
| The Small Business Administration. | The Social Security Administration. |
Whatever form the MGT Act it is in when it is signed into law, there is wide consensus across the government that its IT infrastructure needs an overhaul. IT contractors should prepare for an increase in procurement opportunities for innovative companies. To stay ahead of the curve, some steps to take include:
- Evaluate existing IT modernization contracts to see what your company can improve on before a government-wide initiative is passed
- Small IT companies should start preparing to work with teaming partners in anticipation of a possible shift towards GWACs over individual agency contracts
- Use market intelligence software like EZGovOpps to keep an eye on brand new RFPs and solicitations in your business’ NAICS code. EZGovOpps also offers tools for finding and collaborating with teaming partners, as well as custom analyst updates for large-scale GWACS and IDIQs.
Above all, plan ahead. As the government pushes forward into the future of IT infrastructure, the best thing you can do for your company is stay one step ahead of the competition.
Read the full MGT Act text here.
Read our latest intel on the new MGT Act here.
Don’t forget to view our full GovCon News section for more intel.
Published by Libby Solomon on September 23, 2016