Spending Analysis: Interior's Foundation Cloud Hosting Services Contract
Back in Fiscal 2013 the Department of the Interior set a precedent in the federal government’s growing cloud services market by awarding ten companies spots on its new Foundation Cloud Hosting Services (FCHS) contract. Since that time spending on FCHS has grown steadily, but not spectacularly, providing customers from Interior and other departments with a variety of commercial cloud services. This post examines spending trends on FCHS and analyzes what they might signal for the federal cloud market as a whole.
The data below shows that although annual spending started out slowly on FCHS it has picked up steam since Fiscal 2014. By Fiscal 2016 it had nearly tripled to a total of $22M, and while this is not a high dollar figure compared with many contracts in the federal information technology market, it may be heartening for some to see a healthy level of growth.
Breaking down the fiscal year data by department reveals the following.
Not surprisingly, it is Interior customers themselves who have taken the greatest advantage of the FCHS vehicle over the last three fiscal years. These include the Bureau of Reclamation ($3.5M), the Bureau of Ocean Energy Management (BOEM) ($1.5M), and National Park Service (NPS) ($776K). Spending by the Office of the Secretary (ostensibly the Office of the Chief Information Officer) has totaled $25M.
Few details concerning the components of the other agencies listed in the chart are available. DOJ is the only exception to this with spending reported by the Office of Justice Programs Chief Information Officer ($916K) and the Justice Management Division ($116K).
What did federal customers spend on? Here are the largest contract awards by requirement.
- System Analysis and Program Development Application Hosting Services (Interior) - $21M
- Cloud-Based Hosting Services (Transportation) - $3M
- Budget and Reporting System Cloud Hosting Services (Interior) - $2.6M
- eForms SaaS (Interior) - $1.5M
- Wind Auction Management SaaS Services (Interior) - $1.5M
Lastly, here is what the data shows concerning the top FCHS vendors by obligations earned.
Unisys dominates the field with the lion’s share of its earnings ($21.5M) coming from work at Interior. Another $3M of its total was earned at Transportation. Smartronix follows up with earnings at Justice ($2M) and Interior ($2.6M), while CGI Federal’s earnings also came mostly from work at Interior ($3M). Lastly, IBM and AT&T both earned $1M apiece working at Interior while Aquilent earned $1M at HHS.
If spending on the FCHS is thought of as a microcosm of the federal cloud market as a whole then the overall totals given here must be considered disappointing. The ceiling value of the FCHS vehicle is $10B yet agencies have only managed to put a three-year total of $42M through the vehicle. New contract vehicles are also coming online that will further siphon spending away from dedicated vehicles like the FCHS. For example, cloud spending on GSA’s Schedule 70 has boomed in recent years so it seems that agencies will continue to prefer GSA as their go-to vehicle for procuring commercial cloud services.
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