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Ever to Conquer: The Relentless Pursuit of Public Sector Innovation

RedLeif's PubSec Newsletter

June 10, 2025

Welcome to this week's edition as we continue building a coalition of leaders from all across the public sector ecosystem. This week's briefing includes:

  • AI Integration Acceleration: Federal agencies deploy new AI chatbots while local governments pioneer AI-powered municipal code analysis and private sector tools fill gaps in weather services

  • Procurement Transformation: Pentagon heightens scrutiny on IT contracts while GSA expands reviews to include resellers, signaling major shifts in federal buying practices

  • Cybersecurity Under Pressure: Proposed CISA budget cuts expose opportunities for the ecosystem to much more effectively advocate for critical cybersecurity capabilities

  • Technology Modernization Push: From CRMs for government to permitting automation, agencies seek efficiency gains amid workforce reductions and budget constraints

  • DOGE Influence Expands: $45 million in new funding supports government efficiency initiatives while highlighting tensions between political appointees and career civil servants

  • Privacy and Surveillance Debates: Mobile driver's licenses face scrutiny over surveillance capabilities while AI-powered surveillance cameras spark local control discussions

  • Partnership Evolution: Companies pursue "all-in" government strategies while federal leaders call for more efficient public-private AI collaborations

Onward!

The Public Policy Frontier

(relevant to both FED 🏛️ & SLED 🛷 readers)

(📰 1) A potential budget proposal from a Trump administration is sparking alarm due to significant proposed cuts to the Cybersecurity and Infrastructure Security Agency (CISA) [5]. This proposal comes despite the escalating threat of cyberattacks targeting government entities and critical infrastructure across the United States.

The industry’s inability to consistently and effectively communicate the outcomes of critical cybersecurity investments along with CISA’s historic challenges to demonstrate clearly understood value has left the ecosystem in a very challenging position. As a result, industry experts are now arguing that such cuts appear short-sighted given the current threat landscape [5].

Two things are true: 1) the financial and operational costs associated with a major cyber breach would far exceed any perceived savings from reducing CISA's budget AND 2) appropriations do not equal outcomes. We have to collectively do better if we want to protect public sector data.

(📰 2) A bipartisan group of six senators has reintroduced the SAMOSA Act, a bill aimed at overhauling federal software buying [38]. The legislation seeks to strengthen agency oversight of software purchasing and reduce duplicative licenses.

For software vendors selling to the federal government, this bill could lead to changes in procurement processes and a greater emphasis on license management and optimization [38]. Understanding the requirements of the SAMOSA Act and demonstrating value beyond just the initial software purchase will be important.

(📰 3) The Treasury Department is seeking public input related to President Trump's executive order requiring a shift to electronic payments across the federal government by September 30th [29]. This mandate creates a clear deadline and opportunity for vendors in the payment processing and related technology sectors.

For vendors offering electronic payment solutions, this presents a significant market opportunity across federal agencies [29]. Engaging with the Treasury Department and individual agencies to understand their specific needs and timelines for this transition will be crucial.

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Data Privacy & Protection

(relevant to both FED 🏛️ & SLED 🛷 readers)

(📰 1) Privacy advocates are raising concerns about the surveillance capabilities inherent in mobile driver's license technology [2]. Dozens of privacy advocates and digital rights groups have signed onto a campaign to address these issues, warning about potential tracking and data collection capabilities.

For vendors offering digital identity solutions to SLED agencies, addressing these privacy concerns proactively is essential [2]. Solutions that prioritize user privacy, offer transparency in data usage, and incorporate robust security measures to prevent unauthorized tracking or data collection will be more appealing to agencies navigating public scrutiny and regulatory considerations.

(📰 2) The Trump administration has expanded its use of Palantir's technology to compile data on Americans, raising concerns about data privacy and the potential for merging data across agencies [3]. This move highlights a push towards greater data consolidation within the federal government.

This indicates a potential market for technologies that can integrate and analyze large datasets [3]. However, it also underscores the critical importance of addressing privacy concerns and ensuring compliance with data protection regulations. The Electronic Frontier Foundation highlights the dangers of consolidating government information, emphasizing that data was often siloed for important privacy reasons but seems to miss that effective data governance can easily eliminate the false choice between privacy and data-driven innovation [4].

Government IT Modernization

(relevant to both FED 🏛️ & SLED 🛷 readers)

(📰 1) The General Services Administration (GSA) is undertaking a review of its relationships with value-added resellers (VARs) [17]. The agency is questioning the value proposition offered by these resellers and is reportedly exploring the possibility of establishing more direct relationships with large IT firms.

This review could have a significant impact on the federal IT contracting landscape [17]. Many well-known IT giants currently sell to the government through these channel partners. While the review aims for transparency and efficiency in procurement, it raises questions about the future role of VARs and how this shift might affect smaller businesses that rely on these partnerships.

(📰 2) The Trump administration has unveiled a new permitting modernization plan, building upon previous efforts to streamline regulatory processes [28]. However, the plan faces potential challenges due to Trump-era workforce reductions, which could impact the capacity for effective implementation.

This signals opportunities in areas like digital workflow automation, document management, and potentially AI-powered tools for reviewing and processing applications [28]. Vendors who can offer solutions that enhance efficiency and reduce manual workload in permitting processes will be well-positioned.

(📰 3) There is an increasing emphasis on improving customer experience in government, highlighting the need for vendors to offer solutions that enhance citizen interaction and service delivery [44]. This trend is relevant for agencies seeking to modernize their public services.

For vendors of customer relationship management (CRM) systems, digital service platforms, and related technologies, this presents opportunities to position their solutions as tools for improving citizen engagement and satisfaction [44]. Demonstrating measurable improvements in service delivery will be essential.

These updates are beneficial for agencies involved in digital service design and development [18]. The automatic availability of standard fonts can help ensure consistency and compliance with design guidelines, which is particularly important for government websites and applications. Improved tools for creating and managing brand templates can streamline workflows and ensure brand consistency.

(📰 4) The focus on advanced database platforms for government agencies, such as DataBricks, Strategy, Snowflake, and MongoDB Atlas for Government powered by AWS, highlights opportunities for vendors offering data management and analysis solutions [22]. The need to manage and analyze increasing volumes of data, particularly in the age of AI, is a key driver.

Emphasizing capabilities like scalability, agility, and the ability to handle large datasets will be crucial [22]. Achieving FedRAMP approval, as highlighted by MongoDB Atlas, is a significant advantage in the federal market for cloud-based database solutions.

This Week in DOGE (Department of Government Efficiency)

(relevant to FED 🏛️ readers)

(📰 1) The White House budget request for fiscal year 2026 includes an additional $45 million in funding for the Department of Government Efficiency (DOGE) [23]. This funding is intended to support an estimated 150 full-time employees, with 80% of their salaries reimbursed by other agencies.

This sustained investment in DOGE suggests ongoing opportunities for solutions that enhance government efficiency, streamline processes, and potentially lead to workforce optimization [23]. Vendors offering technologies and services that can demonstrate clear cost savings and improved operational efficiency are likely to find receptive audiences within agencies influenced by DOGE's mandate.

Procurement and Partnerships

(relevant to both FED 🏛️ & SLED 🛷 readers)

(📰 1) The Pentagon's heightened scrutiny on IT and management consulting contracts, as directed by Defense Secretary Pete Hegseth, directly impacts procurement processes within the Department of Defense [34]. This focus on "system IT integration, implementation, or advisory services" will likely lead to changes in how these contracts are solicited, evaluated, and managed.

Vendors of IT and consulting services to the DoD should anticipate more stringent requirements, potentially smaller contract awards, and a greater emphasis on performance metrics and cost justification [34]. This increased scrutiny means greater transparency in contract proposals and a stronger emphasis on demonstrating tangible value and efficiency.

(📰 2) Google is signaling that it is "all in" on government business, with its cloud offering for government customers achieving important security milestones for classified environments [39]. This indicates a strong push by major tech companies into the federal market and highlights the importance of obtaining necessary security certifications.

This conversation is highly relevant for government agencies evaluating AI-powered solutions. It serves as a reminder to look beyond the marketing hype and assess the actual value proposition and problem-solving capabilities of AI tools [11]. Companies can waste significant resources on AI if it's not implemented strategically to address specific needs.

(📰 3) Insights from a former FBI hostage negotiator offer valuable strategies for anticipating and addressing the "deal killer" – the individual on the opposing team who might try to derail an agreement [43]. Strategies include taking the team's temperature, challenging assumptions, and helping them prepare for difficult questions.

These negotiation tactics are highly relevant for professionals involved in procurement, contract negotiations, and inter-agency agreements [43]. Identifying potential "deal killers" and proactively addressing their concerns can significantly improve the chances of successful outcomes in complex public sector negotiations.

AI and Government Innovation

(relevant to both FED 🏛️ & SLED 🛷 readers)

(📰 1) Anthropic has introduced new Claude Gov models with a focus on national security, making them available for classified environments in government [14]. This indicates a targeted strategy for the national security sector and the importance of developing specialized AI solutions for sensitive government use cases.

This highlights the potential for developing and marketing specialized models tailored to the unique requirements of different government sectors, particularly in defense and intelligence [14]. The ability to operate in classified environments represents a significant technical and security achievement.

(📰 2) Salesforce's AI agents have received FedRAMP High authorization, demonstrating the importance of security certifications for AI solutions targeting the federal government [15]. This authorization signifies that the platform meets stringent federal security requirements.

For vendors of AI and cloud-based solutions, achieving FedRAMP authorization, particularly at the High level, is still a critical step for accessing the federal market [15]. So long as FedRAMP certification is still viewed as the assurance that AI tools can be safely deployed in sensitive government environments, partners looking to expand in the federal market will have to endure the long and expensive process. A process the Trump Administration will likely examine with an intention of expanding market access and decreasing unnecessary costs.

(📰 3) The rushed implementation of an agency-wide AI tool at the FDA, dubbed "Elsa," is reportedly facing challenges [16]. This underscores the importance of careful planning, phased deployment, and adequate testing for AI implementations in government.

This highlights the need for vendors to emphasize a structured and methodical approach to implementation [16]. Providing comprehensive support, training, and clear roadmaps for deployment is crucial for building confidence with government agencies considering AI adoption.

References & Sources