It’s drawn national headlines for months now, and earlier this week the most alarming ones blared from the front pages when ratings agency Standard and Poors said it could lower the U.S. credit rating if Congress fails to raise the debt ceiling. That news sent the stock market plummeting to its worst day in a month.

1) What is it?

The debt ceiling is a Congress -approved cap on the amount of debt the federal government is permitted to borrow.
The U.S. government typically spends more money than it takes in. According to the U.S. National Debt Clock the average debt per day since 2007 has increased over the past four years to $4.07 billion.

Debt increases when the government sells debt to the public (in the form of Treasury bonds) to “acquire the financial resources needed to meet its obligations,” according to a 2010 Congressional Research Service report on the history of the debt limit. Debt also increases when the government issues debt to “certain government accounts,” such as Social Security and Medicare trust funds.

2) Where did it come from?

The first debt limit was passed in 1917 on the eve the United States’ entry into World War I. In fact, according to the Congressional Research Service report, the measure helped finance the nation’s war effort.

The first limit capped the debt at a now paltry $11.5 billion. Originally, Congress had to approve specific loan and bond issues individually, but in creating the debt ceiling, it essentially turned the “management of federal debt over to the Treasury, while retaining control through a limit on total federal debt,” CBS Money explains.

In other words, CBS Money reports, Congress ceded more authority to the Treasury Department, but still kept the power of the purse strings to raise or lower the department’s allowance.

The federal debt has since been amended many times, reaching its current limit of $14.3 trillion.

3) How many times has it been raised?

The debt ceiling was raised repeatedly during World War II, once every year from 1941 to 1945. In the years immediately following the war, the ceiling was actually lowered.

However, according to the CRS report, since 1962, Congress voted through 74 separate measures to raise the debt ceiling.

Of those 74, 10 occurred in the past decade according to National Journal reports.

4) What’s likely to happen if it’s not raised?

The current debt limit is set to be reached by the middle of May. As of March 31, under the statutes governing the $14.3 trillion ceiling, the U.S. had borrowed $14.218 trillion.

Treasury Secretary Timothy Geithner, in a letter to Congress earlier this month urging it to raise the ceiling, said the department could engage in short-term fixes that would buy it at most eight weeks of time.

Geithner and economists from across the political spectrum say a failure to raise the debt ceiling would be catastrophic for the country’s financial outlook, including a likely default by the government.

“If Congress failed to increase the debt limit, a broad range of government payments would have to be stopped, limited or delayed, including military salaries and retirement benefits, Social Security and Medicare payments, interest on the debt, unemployment benefits and tax refunds,” Geithner wrote in his April 4 letter to Congress.

Just this week, the S&P, which evaluates the country’s credit quality, revised its outlook on the U.S. economy from “stable” to “negative, amid fears legislators would not raise the debt limit.

5) Why the political fight now?

The political fight centers on not so much whether Congress should extend the debt limit, but whether and how much such efforts should be tied to deficit-reduction measures as well.

As the Washington Post reports, federal spending and debt are under renewed public scrutiny.

Added to that is a new class of Republican legislators who rode into Washington on pledges to cut the government’s bloated spending and debt. “Many congressional Republicans, under the watchful eye of tea party activists, have been loath to do anything that even appears like it could lead to more spending,” The Post reports.

Image: Melanie Gamarra

The Defense Department’s  newly released National Security Space Strategy has made it clear –  once known as the final frontier, the race to leverage technology and capabilities in space has opened up to a number of competing nations, making the limitless cosmos feel a little cozier these days.

The buzzwords, according to the strategy and also in the public pronouncements of top Defense Department officials are: “congested, contested and competitive,” — their description of how things currently stand in space.

Deputy Defense Secretary William J. Lynn III began prepping the Pentagon’s message as early as last November, when, speaking at the U.S. Strategic Command space symposium, he said the U.S. isn’t ready to bow out of the space race, but that we must change the way we think about space.

“Congested”

It used to be that the sprint to space innovation was a two-man race: between the United States and the Soviet Union. Now, there are 60 nations with a presence in space, which means there’s also more equipment, satellites and debris cluttering the void.  By 2015, 9,000 satellite transponders will be active, Lynn explained at the Stratcom space conference in November.

For example, DoD tracks some 22,000 man-made objects in orbit, the new strategy reveals. And of those, about  1,100 are active satellites. “There may be as many as hundreds of thousands of additional pieces of debris that are too small to track with current sensors,” the report continues. “Yet these smaller pieces of debris can damage satellites in orbit.”

“Contested”

Gone also are the days when the United States can “take the stability or sustainability of space — or access to it — for granted,” Lynn said.

“Many countries can hold space systems at risk through kinetic and nonkinetic means,” he added. Some countries have even jammed satellite signals to block news coverage, highlighting how counterspace capabilities can be used for not only military purposes but political ones as well.

The Heritage Foundation, a conservative Washington, D.C. think tank, foresees possible shortcomings in the strategy, though. As a candidate, President Barack Obama promised not to weaponize space, and the new strategy focuses less on weaponizing space and more on  the U.S. “leading by example,” to deter other nations from doing so, which the foundation notes, obviously has its limits.

The new policy might well “force the U.S. in the direction of giving up its dominant position in military and intelligence space capabilities, which provide the U.S. with enormous advantages over the enemy in the conduct and support of military operations,” the foundation’s blog posits.

Ambassador Gregory L. Schulte, the deputy secretary of defense for space policy, partly addressed those concerns when DoD released the strategy earlier this year.

“We have to think about how to encourage other countries to act responsibly in space and how the United States can provide leadership in that regard,” he told the American Forces Press Service. “And … we need to think differently about how to deter others from attacking our space assets.”

“Competitive”

Schulte also described another priority of the new strategy: better leveraging the increasing amount of foreign commercial capabilities in space.

So what does the new strategy mean for the government-contracting market? A key component of the administration’s National Space Strategy (which was released last summer and is separate from the national security policy, although it does overlap in places) is improving the development process for space systems — including acquisition — to make sure the U.S. remains competitive.

“Block buys and the deliberate management of the engineering work force are two avenues in particular we are actively exploring,” Lynn said. “Block buys have the potential to reduce costs and timelines by creating more predictable demand and allowing larger material buys with fewer spares. Establishing a predictable demand schedule has the added advantage of stabilizing the engineering work force associated with a project.”

Another proposed change to the space buying strategy involves using commercial products when available, rather than developing products “from scratch,” The Washington Post reported last month.

For example, McLean-based satellite firm Iridium has built a solid foundation on “hosted payloads,” essentially leasing space on its satellites for customers’ — including the U.S government — equipment.

Even as space has become a little more crowded these days, the Defense Department’s national security space strategy proves that the space market, which has been building a lot of buzz, is just at the launch pad.

Image: Aloysius Patrimonio

For years, the concept of cybersecurity centered on protecting computer networks from malicious outsiders bent on sneaking past or breaking through firewalls and gaining access to sensitive systems.

But recent events in government and the private sector have pointed to the specter of the insider threat, which can be as damaging as traditional threats and often remain secret.

A recent Deloitte- and CSO magazine-sponsored survey found that, increasingly, the insider threat is viewed as the most costly to an organization.

Government-contracting firms that develop tech solutions for the government have taken notice — not only because of the expanding market for insider threat solutions, but also out of self interest as well. These firms, themselves, are susceptible to malicious insiders.

Zal Azmi, senior vice president at government-contracting giant CACI, which recently held a cybersecurity forum specifically about the insider threat, told Defense News virtual browsers, which can prevent the copying of files, could be the key in fending off insider threats.

However, while the corporate world has much to lose from insider threats, government has also learned its lesson the hard way summed up in one word: WikiLeaks.

The dump of sensitive government information onto the so-called whistle-blower website and then onto the front pages of newspapers worldwide served as a powerful example of how protecting the government’s networks against the insider threat is complicated by efforts to promote information sharing.

Pfc. Bradley Manning, a U.S. Army soldier and intelligence analyst, is alleged to have downloaded classified information from SIPRNet — the Secret Internet Protocol Router Network, which is used by the Defense and State departments to share and transmit information, appearing to exploit the information-sharing apparatus put in place after 9/11.

SIPRNet was designed to provide soldiers in forward-operating bases with access to information that could impact their security. But, the ease with which Manning is accused of accessing information and downloading it onto a homemade Lady Gaga disc, of all things, has caused DoD to question how information sharing may make the insider’s nefarious work easier.

The Defense Advanced Research Projects Agency has been working on a project called CINDER — short for Cyber Insider — a threat-detection program that would establish patterns of suspicious behavior, a large-scale systemwide surveillance of Pentagon networks.

“The goal of CINDER will be to greatly increase the accuracy, rate and speed with which insider threats are detected and impede the ability of adversaries to operate undetected within government and military interest networks,” according to a request for solicitations from contractors in the fall when the agency first began rolling out the program.

But even with the sophisticated technology at DARPA’s fingerprints, detecting the insider threat is difficult.

“What sets the insider threat apart from other adversaries is the use of normal tactics to accomplish abnormal and malicious missions,” DARPA officials said at the outset of the CINDER program.

So, if technology is not fail safe, what else are federal policymakers doing to prevent leaks?

Following the most recent disclosures, which featured frank and, at times, embarrassing correspondence from U.S. diplomatic headquarters around the world, the Office of Management and Budget jumped into the action.

Whereas DARPA’s solutions focused on the technology, OMB’s proposed solutions set its sights on evaluating employee behavior, to head off any potential Bradley Mannings before they even begin downloading.

NBC Investigative reporter Michael Isikoff reported in January the Office of Management and Budget had instituted a series of insider threat programs “to ferret out disgruntled employees who might be inclined to leak classified documents.”

OMB Director Jacob “Jack” Lew distributed an 11-page memo to all federal agencies, which among other directives, instructed agencies to use psychologists to evaluate employee behavior, with a close eye on “despondence” and “grumpiness.”

But, if technology is notoriously unpredictable at picking up the signals of the malicious insider, it’s likely psychological profiling may be equally unreliable.

J.R. Reagan, a principal with Deloitte, told The New New Internet last fall the insider threat is one “which we wrestle with a lot.”

All of the proposed solutions boil down to one simple question: “How do you make change the culture at an organization that makes their employees feel they are part of the solution,” he said, “and not … an unwitting part of the problem?”

The Obama administration is also waging a robust legal offensive to counteract the insider threat, in the form of leakers of classified information.

Politico recently reported, in the span of a little more than two years, the Obama administration has filed criminal charges in five different cases surrounding the leaking of classified national security information.

Contrast that with the government’s previous record of dealing with leakers: only three such cases over a span of about 40 years.

It’s clear, in a post-WikiLeaks world, the federal government is taking the insider threat seriously — whether it’s technological fixes, psychological profiling or a get-tough prosecutorial approach.

The insider threat’s multifarious nature requires a number of approaches to combat it.

But what’s less clear is whether the current approaches — or any — will be enough.

DoD Undersecretary of Defense for Acquisition, Technology and Logistics Ashton Carter

Forget about “doing more with less.”

The Defense Department prefers to think of it as “doing more without more.”

But, there’s more to the policy than just changing the way defense planners — including procurement chief Ashton Carter — think.

In a world where managing the department’s bottom line is a DoD priority, the department can’t achieve its goal simply by thinking of the glass as half full without also substantive policy prescriptions.

Undersecretary of Defense for Acquisition, Technology and Logistics Ashton Carter, in numerous public speeches recently, has said doing more without more hinges on the Pentagon exercising “better buying power.”

“It takes the form of guidance from me to our acquisition work force — 147,000 acquisition professionals — on how they can get, as I put it, more without more, because we’re not going to have more,” he said in a Center for a New American Security speech last week.

The 23-point Better Buying Power initiative was first launched in September by Carter and Defense Secretary Robert M. Gates.

The plan notably incorporated suggestions from the department’s acquisition workforce along with industry partners. The strategies include controlling costs, providing incentives for innovation and productivity, and improving competition.

Beyond the hard numbers and bottom lines of the buying provision, Carter has also begun to open up about what the department sees on the acquisition horizon.

One thing is clear. Contracting isn’t going anywhere.

“A strong, technologically vibrant and financially successful defense industry is … in the national interest,” he has said.

Carter’s reassurances to industry have made it clear this is no “Last Supper speech” moment. In the early ‘90s, then-Defense Secretary Les Aspin delivered a grim message to government contractors who ushered in an M&A boom, but left a meager number of major plays in the GovCon game.

But, while Carter said the defense industry remains vital to the interest of the nation (after all, DoD is not in the business of building airline tankers or any of the other state-of-the-art equipment deployed in battle, the undersecretary noted), he also emphasized that interest is tailored to the long-term, not the short.

“Normal market forces” will continue to guide the defense industrial base and DoD expects such forces to lead to an “uptick in the volume of M&A,” he said.

DoD “welcomes” what Carter called “needed adjustments that lead to overall efficiency.” In other words, because of the current budget squeeze, DoD expects defense contractors to merge and acquire as needed.

But, in exchange, contractors must provide transparency.

“The interests of the taxpayer and the warfighter will be forefront in our minds as we review proposals that may result in the creation of weaker stand-alone firms less likely to thrive without the necessary capital structure that their larger parent company is able to provide,” Carter explained.

The name of the game, though, is “creative competition.”

So, don’t expect the Pentagon to smile kindly on mergers among the big five contracting companies: Lockheed Martin, General Dynamics, Raytheon, Northrop Grumman and Boeing.

Unlike in the early 1990s, Carter’s public pronouncements, which are designed to assuage the fears of government contractors, are actually doing so.

In fact, The New York Times reported that following Carter’s recent speeches, defense industry stocks have risen and have continued to do so.

So, what what bodes for the future of DoD’s stance toward the industry?

Making sure the defense industry is keyed in to the department’s new way of thinking is an essential, if underrated, part of DoD’s better buying strategies. And, even as the department has adopted the mantra of  doing more without more, Carter appears to have taken the approach of keeping the lines of communication open to heart.

So, what does

Director of National Intelligence James Clapper

The budget for the nation’s myriad of intelligence activities is bucking the historical trend in three important ways.

First, unlike overall defense spending, which is expected to flat-line or decline in the coming years, the intelligence budget, which has doubled in the past 10 years, is growing and will likely continue to do so.

The uprisings around the world — Tunisia, Egypt and now Libya — highlight the need for improved intelligence as opposed to the heavy footprint of kinetic investment.

Second, for the the first time ever, we know more about the intelligence budget than we ever did before. That’s because the Director of National Intelligence, an old hand at the intelligence till, who served in a number of intel agencies and in the private sector, James Clapper, has released the top-line numbers for the intelligence budget in an unprecedented move

Finally, Clapper’s release of the intel budget is tied to his efforts  to execute more authority over the IC’s budget, which has long been scattered throughout the Defense Department’s budget to preserve a semblance of secrecy.

The intel budget’s growth is clear — when funding for the CIA and other national intelligence programs are added to military intel programs, the bottom line inches closer to $80 billion, which is more than double what it was before 9/11.

And the current budget request for fiscal-year 2012 represents a modest, but significant, increase of 4 percent.

The issues — the (likely continued) growth of the intelligence budget and its first public disclosure — are inextricably intertwined.

For example, we realize the growth of the intelligence budget, in part, because of Clapper’s release of the document during the budget process, an unheard-of move: It’s the first time the top-line numbers for the National Intelligence Program have ever been revealed.

“The disclosure of the budget request constitutes a new milestone in the ‘normalization’ of intelligence budgeting,” said Steven Aftergood of the Federation of American Scientists. “It sets the stage for a direct appropriation of intelligence funds to replace the deliberately misleading practice of concealing intelligence funds within the defense budget.”

Funding for intelligence programs used to be scattered throughout the overall defense budget to maintain secrecy.

Clapper provided hints of his current budget moves last year when he retroactively released the 2010 intel budget numbers. That move was also hailed by anti-secrecy advocates, and Clapper said at the time he wanted to make the release of the intel budget a “standard practice.”

The intelligence budget’s disclosure is also tied to Clapper’s wanting to take a larger role over intelligence-activities funding.

At a conference last year, Clapper said he and Defense Secretary Robert M. Gates had reached a “conceptual agreement” to allow Clapper greater authority over the DNI’s budget.

Clapper, who notably said, that as the leader of the Intelligence Community, he wouldn’t be a “hood ornament,” or figurehead is making good on that promise.

But, Clapper and Gates aren’t the only players in the intelligence game.

With the influx of Republicans on the Hill, the makeup of the House Select Committee on Intelligence has also changed and could play a role in trimming the intel budget.

“The panel is now operating in a climate of fiscal austerity,” The Washington Post reported recently. “Even the Pentagon budget, sacrosanct for the past several years, is expected to shrink.”

But, not necessarily the intel budget, which, when combined with funding for military intelligence, stands at a current annual level of $80 billion, The Post reported.

The Republican chair and the ranking Democratic member of the committee have both said “everything is on the table” in terms of cuts, including to intel.

However, Chairman Mike Rogers (R-Mich.) also said he wasn’t going to “cut anything that impacts the mission.”

Others are far less certain the intel budget, newly released from its days buried away in the defense budget, is due for any trimming.

Especially not when issues like the Egyptian protests point to the increasing need — now more than ever — for high-level and high-value intelligence as a vital tool of both statecraft and defense.

Photo: Andrey Kiselev

When President Barack Obama signed the American Recovery and Reinvestment Act into law shortly into his presidency two years ago, the administration and the media touted the “shovel-ready” projects the stimulus act would help to create?

But, what about the lab-coat-ready projects?

Along with the expansion of unemployment benefits and increased spending on healthcare and infrastructure the ARRA also included billions of dollars for research and development — from large grants to the National Science Foundation and NASA to millions in funding for research into energy efficiency.

And, even as stimulus funding began rolling in and infusing the market, industries and research institutions with cash, the White House promised unprecedented transparency in terms of tracking the Recovery Act’s dollars.

But, research and development poses its own reporting challenges. With shovel-ready projects, such as infrastructure improvement, it’s relatively easy to know if recovery cash is being used wisely: Are the roads being built and are workers holding the shovels?

The challenge became how to effectively measure the impact of the federal government’s investments in science and technology.

The White House Office of Science and Technology Policy found the answer in the stars. Well, not so much the stars as in STAR METRICS.

The somewhat ungainly “Science and Technology in America’s Reinvestment – Measuring the Effect of Research on Innovation, Competitiveness and Science” — summed up in the much pithier STAR METRICS — is a federally funded partnership between the government and university researchers.

Anchored from the White House’s science and technology shop, the project, which is also led by the National Institutes of Health and the National Science Foundation, aims to make sure the federal government and the taxpayers are getting a return on investment on science and technology investment.

In other words, is all this work being done in fluorescent-lit university laboratories going to lead to actual job creation in the “real world”?

“It is essential to document with solid evidence the returns our nation is obtaining from its investment in research and development,” said OSTP Head John Holdren. “STAR METRICS is an important element of doing just that.”

But, beyond that, it’s also an important step in measuring the progress of investments in science and technology to ensure that advancements in the science labs of the ivory tower are being put to use.

Both of these goals couldn’t be more important as the STAR METRICS programs ramps up into its second phase. The first phase, initiated when the bill was first signed, meant developing uniform and standardized measures of the impact of ARRA science funding on job creation.

The second phase promises to be more in depth, measuring new patents, firm startups, new publications of scientific work, and improvements in health and environment from research and employment.

For the government researchers leading the initiative, it’s about turning the scientific method around on themselves.

“STAR METRICS will yield a rigorous, transparent review of how our science investments are performing,” said NIH Director Dr.  Francis S. Collins. “In the short term, we’ll know the impact on jobs. In the long term, we’ll be able to measure patents, publications, citations and business start-ups.”

The Federal Demonstration Partnership, a collaboration between federal agencies and research institutions says the program could revolutionize “the way we think about science investments and science impacts,” and also makes the federal government operate in a more open and transparent manner,  two goals of the administration’s open government aims.

So, why should you care?

It’s clear, the program is now more important than ever. Even before the budget wrangling over how much research and development to add to the federal rolls began, the White House was thinking R&D.

During an economic speech in September, the president proposed $100 billion to expand and make permanent the research tax credit for corporate research shops.

In his State of the Union address a few weeks ago, Obama renewed the call for infrastructure and research spending to “win the future,” as the United States faces what he called a “Sputnik moment.”

Increased funding for corporate and university research and development along with a system, such as  STAR METRICS that ensures such investments are making an impact and are worth it are clearly just one step in making the next big breakthrough. But, scientists, researchers and business development experts alike know the value of taking that first step.

DISA CTO Dave Mihelcic and DISA CIO Henry Sienkiewicz, Photo: disa.mil

Despite all the talk of cloud computing in the federal sector and, more important, action on cloud computing, security questions have threatened to overwhelm the government’s “cloud-first” policy with question marks.

While cloud has promised to “free” data, making it easier to use, share and collaborate, how feasible is cloud computing for federal agencies with particularly sensitive data, most especially the Defense Department — already an apparent victim of unauthorized access and disclosure of information in the WikiLeaks debacle?

DoD’s cloud conundrum  may have a savior, though.

The Pentagon’s IT arm, the Defense Information Systems Agency, has been working on plans to host and manage a private cloud, with the essential help of private contractors, that would keep DoD’s information in an in-house cloud environment behind the government firewall, according to a Defense Systems report.

In other words, while private companies, such as the bevy of IT firms that are recognized as top cloud creators and who do business with the government, will develop the solutions, DISA will host and manage them.

The arrangement could prove that cloud-first in a security-first agency can coexist peacefully.

“In order to secure not only our classified data but also our official-business sensitive but not classified data, we are implementing a private cloud to support these requirements,” DISA Chief Information Officer Dave Mihelcic told Defense Systems.

DISA’s cloud is “under positive DoD control,” he said, being hosted in the agency’s secure Defense Enterprise Computing Center and managed by DISA personnel. Because of these strengthened security controls, many observers think DISA’s cloud template could be put in place across DoD’s networks.

In fact, Mihelcic has said as much, himself. In an interview last month, Mihelcic said DISA was “uniquely positioned” to be DoD’s cloud provider of first resort both for unclassified and classified data.

It turns out, DISA has been making a lot of headway recently in cloud matters.

“When we talk about the rapidly changing pace of technology, we’re moving away from fixed infrastructure and looking very clearly at how we support mobility and the whole complexity of operations,” said DISA Chief Technology Officer Henry Sienkiewicz.

DISA already has one high-profile “win” in its cloud column. Last month, the Army announced it was nearing the end of the testing phase of its cloud-based and DISA-hosted enterprise email and would soon begin rolling it out for use.

DISA has been singled out as a cloud leader within the federal government because of the agency’s existing strengths in IT architecture, but experts recognize there are still hurdles to cross.

For one, if agencies take on cloud solutions, it may tax already overstretched organizations beyond their capacities and take them too far from their original, core missions.

“I don’t think the immediate intent was for agencies to unilaterally build out additional capabilities,” Bob Otto, executive vice president of advisory services at Agilex, told Government Computer News. “My concern is that this additional focus may detract from their core mission.”

But, despite those concerns, defense analysts see success in DISA’s partnering with industry on a private cloud, because of far larger concerns over data security and the agency’s attempts to

This is one cloud with a silver lockbox.

Photo: Matt H. Wade/Wikipedia

When President Barack Obama stood at the lectern in the House chamber last week to deliver his State of the Union address, he struck many familiar campaign-trail themes.

But one passage in his speech that quickly piqued the interest of those in and outside government was his call for a major federal reorganization.

Obama touted efforts, such as using technology and cutting waste to make the government not only leaner, but also work more efficiently.

“But we need to think bigger,” he said. “In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote — and we will push to get it passed.”

If the business of government is business, perhaps it’s time for the government to be run a little more like a business.

Obama set his sights on what he characterized as a too-complicated network of government agencies with often duplicative tasks. For example, the regulation of salmon.

“The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them in when they’re in saltwater,” he explained. “And I hear it gets even more complicated once they’re smoked.”

After days of speculation about whom the Obama administration would task with taking the lead on the reorganization efforts, the White House officially announced Jeffrey Zients, deputy director of the Office of Management and Budget and the nation’s first chief performance officer, would spearhead the reorg efforts.

In a White House blog post, Communications Director Dan Pfeiffer, praised Zients for his leadership of the Accountable Government Initiative, a federal effort to make government more efficient and responsive. “On his watch, we have cut government waste,” through reducing improper payments, closing unused federal buildings and overhauling IT acquisition and management, Pfeiffer wrote.

While Zients has broken the mold as the first federal official tasked with performance, he is no stranger to overseeing better management techniques. Before his role in government, Zients served as CEO of the Advisory Board Company and chairman of the Corporate Executive Board, two executive consulting firms aimed at leveraging best practices in performance and management.

Assistant to the president and staff secretary Lisa Brown, who previously worked on the Obama transition team, will work under Zients on the reorg efforts, according to the blog post.

Observers and Obama, himself, have described the reorganization as the largest in half a century.

“The fact is that we live and do business in the information age,” Obama said during his State of the Union, “but the last major reorganization of the government happened in the middle of the last century.”

Contrast this with the many large-scale changes businesses and private industry have implemented over the years, he said.

“There has not been a business or large organization that has not rethought, retooled, and revamped how they did their job . . .Yet too often, it seems that the federal government is stuck in the age of black-and-white television while we are competing in the age of the iPad.”

In the blog post announcing Zients as the reorganization’s leaders, Pfeiffer said the first priority is reforming trade and exports “to give American companies a leg up in the global economy.”

Meanwhile, John Kamensky, a senior fellow with the IBM Center for the Business of Government, advised the administration not to go it alone on reorganization efforts.

“Congress needs to play an active role and reorganize itself, if any executive branch reorganization is to be successful,” he wrote in a blog post.

Relatively recent executive-level agency additions, such as the Environmental Protection Agency and the Department of Homeland Security, led to funding and oversight “fragmentation,” Kamensky said, because a multitude of congressional subcommittees continued to hold authority over the agency missions. In the long run, that can lead to “dysfunctional behavior,” he wrote.

It’s likely Zients, who has a wealth of experience in the private sector, will seek to take a page from those industry best practices to significantly reorganize the government.

Image: defense.gov

The big news last week for the government-contracting community was the update Defense Secretary Robert Gates provided on the Pentagon efficiencies.

But, along with his familiar refrain, voicing support for the $100 billion in cost savings, he also announced an additional $78 billion in budget cuts, including the cancellation of some weapons systems.

“Not every defense program is necessary,” the secretary said, “not every defense dollar is sacred and more of nearly everything is simply not sustainable.”

While the increased reduction was played up in the media, others see it having a more mixed, or modest effect.

The Proposal

Adding up to $78 billion:

• $54 billion — from reducing overhead costs, including a government civilian salary freeze

• $14 billion from lower-interest rates

• $6 billion in troop cuts for the Army and Marine Corps

• $4 billion from purchase and price changes for F-35 combat aircraft

Other announcements:

§         Staff support contractors will be cut 10 percent per year for three years, saving $3 billion

§         Cancellation of the Marines’ Expeditionary Fighting Vehicle

§         Two-year probation for the Marines’ Joint Strike Fighter to address production issues.

§         The Army will cancel procurement of the SLAMRAAM surface-to air-missile and the non-line-of-sight launch system

§         Modest increases in TriCare fees beginning in the 2012 fiscal year

What it means

When Gates announced the first round of Pentagon efficiencies last August, industry was all ears. “While previous plans to bring significant alterations to the defense-contracting budget were struck down by the private sector’s immune system of industry lobbyists and legislative challenges and clouded by logistical issues,” GovConExec magazine wrote shortly after the efficiencies were announced, “there is a prevailing sense across the business that Gates’ demands for cutbacks are not a drill.”

However, even with the new round of budget cutting and belt-tightening, defense watchers are counseling against hyperbole.

Loren Thompson of the Lexington Institute said the big story about this latest round of budget cuts is not what happened, but what didn’t happen.

“So if you were looking for an apt metaphor to describe what happened to makers of military hardware on Thursday,” he writes, “you might say they ‘dodged the bullet.’”

That’s because, while the projected DoD budget as advocated by the White House and adopted by Gates and the Pentagon’s leaders is about $13 billion less than what was projected in the previous year’s five-year spending plan, it still represents real growth, according to a Federal Times report.

Industry effect and response

While industry is remaining somewhat tight-lipped about the latest round of cuts, the Lexington Institute’s Thompson said defense companies will likely “fare well.”

While Gates did announce the cancellation of the EFV, that also means there will be plenty of other firms to  get a chance to compete for the replacement, which Gates also announced.

BAE Systems will be able to compete for such a replacement, and Thompson also writes the company also got a “shot in the arm” because of the announced modernization of the Amphibious Assault vehicle.

General Dynamics will also likely bounce back from the EFV cancellation, Thompson writes, because of increased spending on its tanks and communications gear.

For the complete prognosis from Loren Thompson of the Lexington Institute, click here.

For the best judge of how industry reacted, the marketplace may be the best place to look. When speculation began swirling earlier this week, The Washington Post reported investors in defense companies were “spooked.”

“Stock in government-services companies was hit especially hard,” The Post reported.

But, by the end of the week, stocks for defense firms had rallied, likely because Gates’ proposals “were not as severe as some had expected,” Reuters reported.

Reuters also reported that defense CEOs “generally welcomed the Pentagon’s budget forecast,” because they are already working on lowering costs and improving performance.

BAE, Inc.  CEO Linda Hudson told Reuters the company had undergone a restructuring last year to lower costs and speed up by process of bringing products and services to the market.

Photo: Jack Moore

So, it’s another year. You’re back in the office and, soon, a new Congress will get back to work too, taking up all the issues it left on the table before it broke for the holiday recess.

And, while there are still a lot of issues to cover, Congress actually did its homework early for once.

The lame-duck session of Congress, the period following the November elections but before new legislators have been seated, is often, as the name implies, sort of lame.

Not much can get done because of partisan wrangling and bickering. Some think it only fair that on the big issues, Congress wait for the recently elected group of lawmakers to take its seats before it considers major legislation.

But, this year was simply not the case. Say what you will about 2010, but it did not go quietly into the night.

The twists and turns of continuing resolutions and omnibus spending bills provided one of the lame-duck session’s main stories.

A $1 trillion omnibus spending bill, which attempted to set across-the-board budgets for the federal government went down in flames relatively late in the process because critics contended it was full of wasteful “pork” spending.

But, government funding came back from the dead in the form of a continuing resolution, providing funds through March 4, 2011. The CR is actually $1.16 billion more than fiscal-year 2010 levels, which allowed some projects to escape being disrupted.

However, the CR was not a panacea, and many observers speculate the budget uncertainties will continue well into next year.

Continuing resolutions often cause headaches for government contractors and anyone else doing business with the feds. In an ExecutiveGov interview in the fall, Shiv Krishnan, chairman and CEO of Indus Corp., said the lack of an official budget and the disjointed funding process can “put a lot of restrictions on and damper the industry.”

Another notable turn of events was the compromise on the Bush-era tax cuts set to expire at the end of 2010. In a bid for compromise between Democrats and Republicans, Congress voted to extend the current tax rate as well as unemployment benefits, which were also set to expire.

This very (un)lame-duck session of Congress carries implications across the government, including the Defense Department.

Congress ended “don’t ask, don’t tell,” the 17-year-old ban on gay troops in the U.S. military, following an extensive DoD review and some political theater.

The START nuclear arms agreement with Russia was also approved, bypassing the political fireworks some had predicted.

Defense Secretary Robert M. Gates said there were “legitimate concerns” from some lawmakers about the treaty’s effect on U.S. missile defense “but frankly, I think they’ve been addressed,” he added.

For congressional and defense observers, the passage of a stripped-down defense appropriations bill, “uncharacteristically unladen with controversial, often non-defense related provisions,” as ExecutiveGov reported at the time, was one holiday surprise.

The stripping out of controversial passages was designed to speed passage.

Other provisions of note:

• Teleworking in federal agencies was finalized with the president’s signature on the Telework Enhancement Act.

• The two-year federal pay freeze for federal civilian employees, proposed by the president last month, was finalized.

However, while Congress was certainly a busy bees’ nest the past month, there are, obviously, some provisions that ended up on the cutting room floor.

One of them was a comprehensive cybersecurity bill, which had made waves especially in a breakout year for cybersecurity in terms of WikiLeaks, Stuxnet and Operation Aurora.

In a November interview with GovInfoSecurity, Tom Davis said he didn’t think Congress would pass a cybersecurity bill because of some “radioactive provisions” in the proposed bills that wouldn’t garner enough bipartisan support for passage.

Cybersecurity guru and former White House adviser Melissa Hathaway had implored Congress to take up a cyber bill in the lame duck, however those efforts fell short, as the final version of the defense appropriations bill passed by Congress omitted a measure establishing a National Office of Cyberspace in the White House, Nextgov reported.

For good or for ill, Congress got a lot done in the last few months of 2010, and it all meant 2011 started with a bit more of a bang than usual.