Mobile Device

With the Office of Management and Budget poised to restrict agency buying of mobile devices and service plans to a limited set of contracts offered by the General Services Administration, it seemed worthwhile to examine how mobility spending has fared across the Department of Defense over the last few years. This post supplements last week’s post on mobility spending on the GSA’s Wireless FSSI BPAs. Defense spending wasn’t the focus in last week’s post, so this week’s entry will take a closer look at the DoD. The figures provided cover the period from fiscal 2012 to fiscal 2014 including DoD’s spending on the Wireless FSSI BPAs.

Wireless Spending Declines

The chart below depicts spending on wireless devices and plans across the DoD from fiscal 2012 to fiscal 2014. As we can see, total spending already began to decline from FY 2012 into FY 2013, most likely due to the impact of sequestration.

If you look closely, however, you’ll notice that the decline was not distributed evenly across all of the DoD. Navy remained steady at $88 million, while Air Force spending declined only $4 million. It was in the Army and across the Defense Agencies that spending declined the most precipitously. The decline in Army and at the DAs further accelerated from FY 2013 into 2014, reaching a total FY 2012 to 2014 drop of 39% in the former and stunning 73% in the latter! Conversely, spending over the same period by the Navy and Air Force actually grew by 15% and 3%, respectively.

Behind the Numbers

What’s behind these recent developments in DoD mobility spending? Contract actions. Fiscal 2013 is the year that the Defense Information Systems Agency put an enterprise Mobile Device Management contract into place with Digital Management Inc. Use of this contract, #HC101313C0002, appears to have driven the 39% decline in mobility spending at the Defense Agencies. Less clear is if the 73% drop in Army spending was also related to use of the MDM contract. The chart below shows spending on DMI’s MDM contract with DISA since its award in June 2013.

Unfortunately, DISA’s contracting arm reports all spending as coming from DISA. Army has, however, closely aligned its mobility investment strategy with DISA’s as part of the Joint Information Environment, so it’s not a stretch to conclude that some of the spending on the MDM contract is Army-related.

By contrast, Navy spending on wireless rose by $13 million from FY 2013 to FY 2014, despite the fiscal austerity imposed by sequestration. This rise in spending has a couple of causes. First, in 2010 Navy consolidated much of its wireless spending into a small number of contracts called Department of Navy Wireless Services. These contracts expired in FY 2012, however, and have lived on life support ever since thanks to several years of sole source extensions. The Justification and Approval approach tends to become expensive over time. Second, Navy customers put more than $5 million worth of mobility related obligations through 2 other contracts – the C4ISR Tactical Vehicle Engineering and Prototyping Services contract held by SAIC and the Joint Basing and Technology Transition Support contracts held by Concurrent Technologies, GDIT, SAIC, and Scientific Research Corporation.

Takeaways

Several conclusions cane be drawn from this brief look at DoD’s mobility spending data.

First, although the DoD’s reliance on and interest in mobility is growing, spending on wireless is declining thanks to the use of more cost-efficient contracting methods.

Second, DISA and perhaps also the Army, have proven the value of the Mobile Device Management contract strategic sourcing approach. The release of an RFP for follow-on services is expected within the next few weeks.

Third, the Navy has demonstrated the inefficiency associated with delayed and sole source contract extensions for wireless services. Navy officials hope to remedy this problem with the pending competition and award of new contracts for its DON Wireless and Telecommunications Services (Spiral 3) program. Once these contracts are awarded, we should expect Navy’s wireless spending to also decline.

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