Why reaction to 'IT cartel' comment misses the point

Alan Balutis is senior director and distinguished fellow at Cisco Systems' Internet Business Solutions Group.

It’s been a little over a month since the lively round of “Farewell, Vivek” events, and how quickly we have soured on the beloved former federal CIO.

Kundra had the temerity to state in a New York Times editorial that governments around the world are wasting billions of dollars on unnecessary IT and to claim that the problem had worsened in recent years because of what he called the “IT cartel.”

The cartel is a powerful group of private contractors that encourage “reliance on inefficient software and hardware that is expensive to acquire and to maintain,” Kundra wrote.

The response drew immediate fire. Federal Computer Week’s article garnered responses on both sides of the argument. Phil Bond, president of TechAmerica, said Kundra “couldn’t be more wrong in describing federal IT contractors as a ‘cartel.’”

Stan Soloway, president of the Professional Services Council, said Kundra’s comments were inappropriate, adding, “I’m sure some people were offended.”

Consultant Mark Amtower dubbed Kundra’s language inflammatory. Several commenters started their rebuttals with definitions of “cartel,” such as, “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.”

So how can we assess Kundra’s claim? First, I think what exists is not by any means a cartel. It’s an oligopoly perhaps (look that one up in your Funk and Wagnalls!). Second, I was surprised that not a single commenter seemed upset by or challenged the first sentence in Kundra’s editorial, about billions being wasted on IT. Are we so jaundiced in our thinking that we don’t even question that statement?

Frankly, I was more upset by that assumption than by his misuse of the word “cartel.” I would say he was guilty of hyperbole (meaning “an obvious and intentional exaggeration”). But that is common in our community. We hold “executive” events for 1,000 people. We dub someone a czar who only has a bully pulpit. We pass out awards to marginal figures. So give Kundra some slack. He’s only guilty of what so many of us are — phrase mongering.

We should focus instead on the work of the so-called supercommittee (officially, the Joint Select Committee on Deficit Reduction, so perhaps there’s a bit of hyperbole in that, too), which is tasked under the Budget Control Act of 2011 with identifying as much as $1.5 trillion in additional deficit reductions over the next decade. If lawmakers can’t agree on a package of cuts by late December, then automatic cuts, known as sequesters, will kick in beginning in 2013 and going through 2021. At the Defense Department, those cuts and the reductions under way already would amount to as much as $850 billion, a “doomsday mechanism that would imperil national security,” according to Secretary of Defense Leon Panetta.

So the pressure will be on the supercommittee, whose members have reputations as deal-makers. The question now is whether that group can draw on its combined 180-plus years of congressional experience to forge an agreement.

I was pleasantly surprised by most of the panel picks; there are a lot of IQ points on the committee. You have some tech-savvy members in Sens. John Kerry (D-Mass.) and Patty Murray (D-Wash.). I’d say there is at least a 50-50 chance that they can craft a bipartisan pact close to the “grand bargain” that President Barack Obama has sought. It will make for an interesting few months.

About the Author

Alan P. Balutis is senior director and distinguished fellow at Cisco Systems.

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Reader comments

Sat, Nov 19, 2011 San Diego, California

Both sides are correct. Mr. Kundra's comments are as it truly is. "Cartel" may be a bit strong because both Government and the usual suspects, the top ten IT Contractors, integrators who sell and service most of these projects, are not innovators. Fact is innovation for these contractors usually means less FTE's (full time equivalents) therefore less revenue. These large Contractors usually acquire smaller companies who innovate after their products are proven in the Commercial Space. Additionally, many Government buyers and end users don't always know what they're buying and end up with lesser products because they're reccommended by the "cartel." It's always easier and in cases very lucrative to use, maintain and charge for old IT infrastructure rather than change and change is what Mr.Kundra was trying to bring to the table without the authority to affect that change. He had all the responsibility without any of the authority to really make it happen. That's why he left.

Thu, Oct 20, 2011 DC

Despite all the protests to the contrary, anyone in the Federal IT community knows his remarks are true. Sure there are lots of companies getting government contracts, but everyone also knows that the largest and sweetest contracts go to a very small number of companies where virtually every senior Federal IT person makes a stop on their way out the revolving door. And yes, billions with a B are wasted on redundant and badly managed IT projects every year.

Wed, Oct 12, 2011 Mark Nelson Wash DC

A very onerous acquisition process drives government to issue stiflingly large multi-year IT support contracts that are inherently inefficient. There are a few large firms that take good advantage of this. There are no "bad-guys" here, just bad policy leading to ineffective execution.

Tue, Oct 11, 2011

I can understand why someone in Mr. Kundra's position might want to blame industry for not saying "no" to agencies. Unfortunately, it's not the place of industry to tell any customer that what they want is stupid or wasteful. Sadly, that is the failing of Mr. Kundra in his term as Government CIO - he was never able to put any controls on any of the individual agency CIOs. That's where the problem is - CIOs and program offices throughout the Government thinkiung IT is the solution to any and all problems.

Fri, Oct 7, 2011

Seriously? You wasted your 15 mins on a commentary pivoting responsibility to the "Super-Committee" in the same fashion Kundra pivoted blame for his lack of accomplishments on the "cartel". Column space could have been saved on commentary that illicit ideas and eventual solutions instead of again passing the buck.

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