Partners Prepping For Federal Security Deals

Distributors are helping their resellers tolerate the wait for tempting IT business opportunities as the merger of 22 federal entities gets under way.

"It's one thing to have [spending] authorized," said Bob Laclede, vice president and general manager of Ingram Micro's government and education division. "It's another thing to have a purchase order."

On Jan. 23,almost one-third of the way into the current fiscal year,Congress approved $390 billion in federal spending by agencies that are not part of the Department of Defense, whose budget was approved last fall.

The General Accounting Office estimates that about $1.7 billion will be allocated for the DHS' IT projects for fiscal-year 2003.

The task of unifying the myriad applications, networks and IT personnel of the departments and agencies comprising the DHS will dwarf the complexity of a merger like that of Hewlett-Packard and Compaq Computer, said Brad Mack, vice president of sales at McLean, Va.-based iGov.com, which supplies IT services to the federal government exclusively.

A few key pieces of the puzzle are now in place as the federal budget has been approved, Steven Cooper has been named the DHS CIO, and the District of Columbia has been chosen as the location for the new department's headquarters. Ingram Micro's Laclede said he expects IT projects to emerge over the next 12 to 18 months.

"You figure by late 2003 and early 2004 [the work will start] to hit," said Laclede, adding that he's accustomed to the government's wheels grinding slowly. "If they started a major IT DHS request-for-proposal this year, it wouldn't get awarded until next year."

But Tech Data is advising its reseller partners to bone up now.

"You're going to have the larger prime contractors pursuing some of the larger IDIQ [Indefinite Delivery, Indefinite Quantity] contracts that are borne out of [the DHS]," said Erich Ohngemach, director of government field sales at Tech Data. "The small and disadvantaged businesses will be looking for partnering opportunities with the prime contractors.

"What I'm doing with my midtier [resellers] is telling them to prepare themselves for the technologies that will be associated with the contract requirements," he said.

Ohngemach cited secu-rity, networking infrastructure, wireless communications and enterprise storage as areas that should be of interest to resellers that would like to serve the DHS.

"There are a lot of legacy systems that these 22 agencies will be dragging along with them into the mix, and [integrating] those will be the responsibility of the prime contractors," Ohngemach said.

IGov's Mack echoed that sentiment: "When you're combining as many different agencies, payroll systems and [human resources] systems as the DHS is, you first have to figure out which one [to standardize on]," he said.

At D&H Distributing, a new government credit program may aid resellers that are trying to compete for the DHS business.

Anne Brennan, director of government at D&H, said about 100 resellers already have signed on for the credit program, which carries neither interest fees nor financing fees.

"We know the government is going to pay. But they pay slowly, and for these small and midsize guys, it can tie up their line [of credit to wait for the federal dollars to flow in]," Brennan said.

"A couple of our resellers have done more business [in the five months since the program launched] than they did the previous year," Brennan said. "One of them did $200,000 in sales in five months, as opposed to the $40,000 he did in the prior 12 months."

D&H is also helping educate its resellers about selling to the DHS, providing them with downloadable white papers and a government resource kit, she said.

"[Under federal law,] a certain number of federal contracts are set aside for [minority-owned and women-owned] companies," Brennan said.

Since price will be only one of many factors dictating who wins business, those smaller solution providers will be able to compete and win over accounts, especially with the increased spending coming from the DHS, she said.