Overhauling Federal Information Technology Spending

OMB's Five-Prong Strategy Could Rescue IT Procurement

This article first appeared in Government Executive.

The White House will unveil on Friday a five-part overhaul of the way the federal government buys and manages $80 billion in information technology each year.

The initiatives Jeffrey Zients, chief performance officer of the Office of Management and Budget, will announce include collapsing redundant layers of investment review boards, creating an "elevated" project management career track, and asking Congress for help funding smaller projects more quickly rather than committing to oversized big-ticket developments that are prone to failure.

If Zients gets support from Congress and from employees at the agency level, the new approach has the potential to dramatically improve IT purchasing and management, while offering better oversight and transparency into government IT projects.

"People have talked for years about how we have not been able to move toward modular IT," said Vivek Kundra, the federal chief information officer, in an interview last week. "We know what needs to be done, but there are some structural barriers that have to be addressed. We’re trying to move away from huge massive contracts to a model where you will really see true value that will also favor smaller boutique specialized firms."

The announcement is the latest in a wave of sweeping changes that the Obama administration has brought to the IT procurement process. In June, OMB unveiled the IT Dashboard, a website that allows the public to view details of every major federal IT project. The agency also launched a series of high-level TechStat accountability sessions in which OMB senior staff visit agencies to determine whether to turnaround, halt, or terminate their problematic projects.

According to OMB officials, some 30 TechStat sessions have been completed, resulting in the elimination of three major IT projects and acceleration of 19, and leading to savings of about $2 billion.

Zients will announce the initiative at a meeting hosted by the Northern Virginia Technology Council. Among the elements are:

  • Improving budget flexibility by convincing Congress to speed up project approvals in exchange for greater transparency for lawmakers
  • Elevating program and project management by creating a career track for skilled program managers
  • Simplifying internal governance and speeding up project cycles by collapsing redundant and powerless investment review boards and replacing them with agency equivalents of the TechStat process
  • Launching a Mythbuster campaign to dispel conventional wisdom in the IT industry that the Federal Acquisition Regulation prohibits certain innovative and cost-saving approaches
  • Creating governmentwide platforms that use cloud technologies to improve collaboration and reduce redundant data centers

"What we’re not doing a good job at is leveraging our economies of scale," Kundra said. "More importantly, we’re not rationalizing these investments across the board."

For example, by working at a governmentwide level to negotiate with software vendors, OMB has already been able to reduce the cost of licenses, he said. In one case, the cost of anti-virus programs for the Defense Information Systems Agency dropped from $40 to $3 per user. The White House also wants to reduce the 2,100 federal data centers by 30 percent.

Zients is expected to highlight the disconnect between congressional budget cycles and IT development cycles. Because agencies often don’t get multiyear funding, IT managers worry about getting only "one bite of the apple," according to Kundra. As a result they tend to over-engineer projects and go for the "$5 billion solution rather than smaller $500 million projects" they actually have the capacity to manage, he said.

On the workforce front, the new career track would provide specialized training, credentialing, and high-level support employees need to become skilled program managers. At the end of each project module, these managers would be required to share best practices with other agencies.

"We don’t have a cadre of specialized IT acquisition folks who can negotiate across the table from someone who is getting paid $500 an hour," said Kundra. "It is vital that we are able to attract and retain the best talent across the federal government."

Pratap Chatterjee is a visiting fellow at the Center for American Progress and author of Halliburton’s Army (Nation Books, 2009) and Iraq, Inc. (Seven Stories Press, 2004).

This article first appeared in Government Executive.