Federal acquisition regulations have become a counter-force to innovation and evolution in technology.
Following the failed launch of HealthCare.gov, President Obama stated, "The way the federal government does procurement and does IT is just generally not very efficient. In fact, there's probably no bigger gap between the private sector and the public sector than IT."
The problems associated with HealthCare.gov made headlines and brought government IT to the forefront of politics. In spite of an agenda loaded with significant public policy and national security issues, Congress has spent substantial time debating legislation to reshape federal IT governance and procurement. Last week, the House passed the Federal Information Technology Acquisition Reform Act (FITARA) and lawmakers’ ongoing attempts to legislate the management of government IT are certain to continue in 2014. At CEB, we are watching these developments closely and believe changes to federal IT governance and procurement practices are inevitable, regardless of the changing outlook for a particular piece of legislation. We also believe that IT leaders need to assume responsibility for stewarding change for government IT, rather than waiting for change to be forced upon them.
The current legislation doesn’t fully address the funding model for federal technology, which is at the core of the challenge for IT departments. Unlike private corporations, federal IT budgets, decisions and authorities are so distributed that standards and shared services are often impossible to implement, even within a single agency. The oversight of an agency’s IT programs, applications and operations is generally fragmented, with budgeting authority and funding mechanisms often an obstacle to effective enterprise IT portfolio management. The annual appropriations cycle and the inability to take a multi-year approach to finance IT investments through depreciation and amortization make long-term planning a challenge. Investments that require near-term spending to achieve long-term savings can be incredibly difficult to justify and budget, including critical efforts to retire and replace legacy applications and infrastructures. It is for all of these reasons that we believe change is coming for government IT; the status quo cannot withstand increasing pressures and expectations from business partners, citizens and the media.
Extensive CEB research on the future of government IT predicts that significant shifts will occur in the next three to five years in the essential competencies of federal IT organizations, including how technology is acquired and how talent is sourced. Despite honest intentions to ensure integrity and fairness, federal acquisition regulations have become a counter-force to innovation and evolution in technology. For instance, regulations that may work well for commodity hardware purchases often break down when applied to procurement of services based on human capital. Today, there are more opportunities to leverage technology across government than ever before. Because of this, the need for change is most critical in the capacity of federal agencies to apply more effective portfolio management discipline to IT programs, applications and operations.
Federal IT leaders know the issues with governance and procurement of IT better than anyone. For that reason, they should not acquiesce to historical precedence, nor should they allow events to play out without their influence. While the outlook for the FITARA legislation is still uncertain, it is certain that changing stakeholder expectations will dramatically change the landscape for IT leaders. Federal IT leaders need to be as focused on shaping policy and reform as they are committed to their departmental missions. While changing mandates for IT governance and acquisition processes is an extraordinary challenge, the steady influence and significant expertise of experienced IT leaders are essential to ensure positive progress.
Kris van Riper is a managing director and Lon Zanetta is a senior executive advisor at CEB.