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FCW : September 15, 2014
September 15, 2014 FCW.COM 21 For acquisition professionals, buying cloud computing is a bit like stepping from a 21st-century city into the Wild West. Federal buyers must move from the known, predictable, more or less standard procurement world into one that is unknown, unfamiliar and as yet untamed. It’s no wonder that in ASI Govern- ment’s polls of acquisition profes- sionals at 110 federal organizations, 64 percent of respondents believe they lack the necessary technical expertise in cloud computing and thus are chal- lenged in structuring contracts for it. “There’s no exact fit for commercial cloud in the [Federal Acquisition Reg- ulation],” Mark Day, deputy assistant commissioner of the General Services Administration’s Office of Integrated Technology Services, told attendees at a March conference focused on cloud acquisition. Agencies that have acquired cloud services have done so in differ- ent ways, and only with time will it become clear which approaches work best, said Michael McFarland, director of GSA’s Office of Acquisition Opera- tions. “When the auditors weigh in, we’ll see what works,” he added. Buy ‘by the drink’ To help clear up some of the confu- sion, ASI Government has published two guides for buying cloud comput- ing. We sought to help clarify what “cloud computing” means and find examples of how best to buy it. “Cloud computing” refers to shared IT resources that agencies can use without investing in hardware and software. Instead, an external party manages the computing resources on its own IT infrastructure for a fee. Our first cloud advisory likened buying cloud IT to purchasing water. Homeowners and building manag- ers buy water service rather than the water itself, eliminating the need to purify, regulate and distribute the water on their own. Agencies buy cloud computing on the same “as-a- service” model to reduce their need to own and maintain IT equipment and applications. What’s more, buying cloud IT, like purchasing from a water utility, spreads costs and risks across many customers. Another similarity between water and cloud IT services is that both are purchased “by the drink” — that is, they are consumed in real time by con- sumers who pay only for what they use. Water and cloud computing are both available on demand at any time, and consumers serve themselves. Pro- viders supply varying amounts and measure consumption to set fees and allow consumers to monitor their use. The analogy illustrates an impor- tant truth about buying cloud IT ser- vices. Like water, cloud computing is a commercial service, so FAR Part 12 can guide buyers. That means cloud customers should consider the opera- tional, cost and compliance impact of deviating from customary commercial practices. Sidle in small and single-award As our second advisory suggests, acquisition professionals can start by creating a pilot program that uses a single-award contract with a single cloud services provider to support a well-defined requirement. Using a FAR Part 39 modular approach, they can limit scope and allow for shorter contracts, thereby reducing financial risk and providing a chance for the acquisition team to gain experience. Although fixed-price contracting has become the common way of pay- ing for goods and services in govern- ment, it is not a good fit for buying cloud services. A fixed-price contract is designed to contract for and fund a predetermined level of service, but cloud computing is variable by nature. BY KYMM McCABE, FRANK McNALLY AND ANNE LAURENT Federal buyers have a variety of ways to approach cloud services. Here are some strategies for cutting through the chaos to find the best solution for your agency. Taming the wild west of cloud acquisition AcquisitionMatters
September 30, 2014
August 30, 2014