A New Way of Buying Cloud Services for Federal Agencies


It should be no secret that federal agencies still face challenges when it comes to purchasing technology during the federal buying season, and the process of buying cloud services is just one of them. How can you help your federal customers through the process? One simple way is to be informed of the conversations and changes taking place on the federal buying side.

Earlier this year, the federal government formed an interagency working group to develop best practices aimed at helping agencies and departments move with greater speed and confidence to adopt cloud computing services. Called the Federal Cloud Center of Excellence (CCOE), headed by Dr. David Bray, CIO of the United States Federal Communications Commission (FCC), the working group recently announced they would be releasing a draft best practices guide for buying cloud services this week.

When referring to the cloud buying process, Dr. Bray says, “It’s about doing acquisitions faster…How can we identify the opportunities for bulk buys, much like we do for hardware?” In 2015, Dr. Bray and his team completed an extensive overhaul of the FCC’s then 207 legacy systems and migration to the cloud, and he’s since been a vocal advocate for a cloud-first approach across public service agencies. With the move, the FCC is now spending 35% less on legacy IT, and Bray wants to help other agencies do the same. One way to do so would be to change the funding mechanism for IT.

The best practices guide states there are three options for purchasing cloud services: Through the GSA schedule using a firm fixed price contract; through “drawdown” accounts where agencies obligate a certain amount of money per year and either the agency or the vendor monitors usage; and through a third approach: A subscription model where the agency pays a monthly bill based on a standard set of services.

“The federal government’s existing methods of buying cloud services (e.g., optional CLINs, drawdown accounts and subscription models) do not effectively address the problem of demand elasticity and portability. They are ultimately minor variants in contracting structure, business financial process emphasis, or product re-characterizations that help only incrementally by shifting trade-offs without providing complete solutions. None of these methods provide for a complete realization of benefits of cloud computing by providing effective means for the government to both consume and pay only for the resources it needs and uses,” the draft guidance states. “A potential solution to this might explicitly allow for cloud computing resource units to be treated, including associated oversight risk, like labor hour rates (fixed unit price) in T&M contracts.”

Bray said the center of excellence may end up recommending that GSA or another agency create a government-wide cloud contract. If nothing else, the draft guide should get the community talking and debating how to change the current process.

As you continue having buying conversations with your customers, let them know you’re aware that changes may be taking place and you are there to help them throughout the buying process – no matter what changes are to come.

Interested in learning more about how to build a successful cloud reseller team? Find out how to do so here.


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