Kundra: 'IT cartel' holds back government efficiency

 Editor's note: This story was modified after its initial publication, to insert additional material.

Former Federal CIO Vivek Kundra is back in the news a week after his departure with his bold assertion that an “IT cartel” of major federal contractors allegedly is hampering efficiencies in government.

Kundra made his parting shot in an article in the New York Times on Aug. 30, attracting interest on Twitter but also surprising and disappointing many members of the federal technology community.

“It was inappropriate,” Stan Soloway, president of the Professional Services Council, told Federal Computer Week. “I’m sure some people were offended.”

That was putting it mildly. Several federal IT executives were outraged by Kundra’s comments, but declined to speak publicly for fear of negative repercussions.

“Everyone is calling about it today,” said a senior IT contracting insider. “People are feeling really surprised and upset by it. ‘Cartel” is such a sensitive word, with anti-trust implications.”

Kundra made the claims in an editorial he wrote about his drive to promote cloud computing in government, which he views as an efficiency measure.

"As the global economy struggles through a slow and painful recovery, governments around the world are wasting billions of dollars on unnecessary information technology," Kundra wrote in the editorial. "This problem has worsened in recent years because of what I call the'"I.T. cartel.' This powerful group of private contractors encourages reliance on inefficient software and hardware that is expensive to acquire and to maintain."

Later in the article, he refers to the alleged cartel again, implying that federal contractors are holding back federal investment in cloud computing.

“As foreign governments prioritize investment in the cloud, the United States cannot hesitate because of hypothetical security threats that serve the entrenched interests of the I.T. cartel,” Kundra wrote.

Kundra also named names in the editorial. The article mentions Northrop-Grumman as a company that was the contractor for a wasteful IT project. Northrop-Grumman officials declined to comment.

In a related speech in San Francisco on Aug. 31, Kundra named Northrop again, along with Lockheed Martin, Boeing, and Raytheon as companies that present stumbling blocks to federal adoption of cloud, according to an article in a newspaper called The Australian.

“’Cartel’ is a good headline word, but it is inappropriate and a misuse of the term,” Soloway said. “Using that word detracts from the substance of what he was saying about cloud.”

Soloway also took issue with Kundra’s comments implying that IT contractors were putting obstacles in the way of government innovation.

“The companies he referred to are all have their own cloud solutions. They recognize cloud technology is the wave of the future,” Soloway said.

Since the government sets the terms and conditions of acquisition and procurement, it is not fair to blame delays in adoption of cloud completely on companies, Soloway said.

“To blame the companies is a bit unfair,” he added.

Soloway was not the only critic.

"While we agree with [Kundra] on many issues, especially on the significant benefits for governments moving to the cloud, calling federal IT contractors a "cartel" is not one of them," said Phil Bond, president of TechAmerica, a trade organization for IT companies. "Federal IT contractors are a very important part of government operations and they should be viewed as partners, not enemies,"

But Kundra did have support for his article and the ideas he was promoting. The editorial was retweeted multiple times on Twitter.

Habib Nasibdar, chair of the Cloud Computing Task Group for the American Council of Technology-Industry Advisory Council, said the task force and federal contractors in general have been very supportive of Kundra’s goals to improve efficiency and adopt cloud computing.

“We are going to continue to promote those policies,” Nasibdar said, adding that the Kundra’s ‘cartel’ comments are not a central part of the discussion of cloud.

“At the end of the day, we all will need to come together and show efficiencies. I don’t think the ‘cartel’ comment has anything to do with the underlying message,” Nasibdar said.

Kundra, who recently left the White House to accept a post at Harvard University, was not immediately available for comment.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Cyber. Covered.

Government Cyber Insider tracks the technologies, policies, threats and emerging solutions that shape the cybersecurity landscape.


Reader comments

Thu, Jan 12, 2012 John Weiler United States

I believe the observations of Mr. Kundra on why there is so little competition and why 95% of the major IT Acquisitions go to a handful of major defense contractors. The problem is not the suppliers, but the buyer and their acquisition advisers. When it takes 84 months to complete a major acquisition, and only a few can bid, it is not the suppliers fault. One should look at who is benefiting most from these over engineered processes. Federal Times study looked at revenue of federal system engineering firms and puts Mitre at the top. So, if you want to fix Federal IT, stop blaming the guys who have to make up the cost of bidding, and don't ask the one who benefits most to fix IT.

Fri, Sep 9, 2011

LOL, either Mr. Kundra was too busy to attend the cyber security threat briefings or he chose not to believe what he was shown during them. This is a serious personal flaw. A political bias shouldn't prevent someone from learning new information but obviously it did if he views the threat as hypothetical. A good counterpoint to his OP ed is GCN's "A digital 9/11 might be underway already". Most of the cloud vendors have a either a lack of understanding of the threat or understate the true cost of implementing the necessary security. If public cloud was so cost-effective and secure then Sony and Amazon wouldn't have been successfully attacked. As a fed and as a US citizen I would only trust a private cloud with federal oversite managed by career feds not political appointees to handle any sensitive data.

Wed, Sep 7, 2011 ITGuru VA

Vivek is 100% right. There may be some genuine IT companies doing good work for the Govt, most of the rest are "Cartel". I had been inside and found so much waste at every level of IT contracts and Government. It is a systemic problem of the Government.

Tue, Sep 6, 2011 Mordy

I'm not sure that hosting government services over gmail or dropbox is a great idea, especially as it discourages the distinction between public affairs and private, corporate ones. Kundra says that employees use gmail for personal uses anyway, so there's already a "shadow IT" running unregulated. Won't giving all government employees official gmail accounts though just further conflate their private + public domains? I wrote more about this here: http://www.quantumtechnology.net/index.php/General/vivekkundra-itcartel.html

Tue, Sep 6, 2011 Mark

Sorry but Vivek has been big on the cloud aspect since the beginning and I was always wondering if he was setting himself up for a consulting job afterwards around cloud technology. This said, it would be beneficial to the government if there was some emphasis on moving away from contracting. I personally work in a shop where 85% of the labor is outsourced to more expensive labor. This makes no sense and with that we need more Federal FTEs to fill the roles. In addition, outsourcing our hosting services only adds to the idea of "cartel" or external control. What I mean by this is if the government has no capability of turning to Federal managed machines what happens when the contract is up for renewal .... that inevitable rate increase. In the end, Vivek's focus while in office on outsourcing has made the Federal government less effective but more efficient, which in the end degrades the capabilities of the government to react in times of need, or technology changes.

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