OMB wants agencies to emphasize IT efficiencies in 2012 budgets

Peter R. Orszag, director of the Office of Management and Budget, issued a memo on Tuesday telling agencies to include in their fiscal 2012 information technology budgets efforts to emulate the private sector's level of efficiency such as consolidating IT infrastructure. Record-breaking deficits are prompting the drastic measures, according to the guidance.

"I believe that the biggest driver of this productivity divide [between the public and private sectors] is the information technology gap," Orszag said in a speech delivered at the Center for American Progress, a think tank with close ties to the Obama administration. "Closing the IT gap is perhaps the single most important step we can take in creating a more efficient and responsive government."

The instructions direct agencies to include adequate funding for consolidating data centers as outlined in plans they established this year.

IBM has reduced the number of data centers it uses from 235 to 12, according to Orszag. Hewlett-Packard has consolidated 14 data centers into one, reducing energy use by 40 percent. Meanwhile, since 1998, the number of data centers in the federal government has increased from 432 to more than 1,100.

Agencies also should "evaluate the potential to adopt cloud computing," a practice of shifting data centers to a shared, Web-based environment that a third-party contractor operates. They should choose cloud computing instead if their analysis finds that cloud computing costs less and is as secure as traditional IT networks.

In addition, the memo said agencies should identify high-risk IT projects. OMB will be evaluating the projects more rigorously than in past years, and additional guidance will be released in the next few weeks.

As far as information security, agencies should budget enough money to cover expenses for continuous, real-time monitoring of cyber threats. This approach to information security was detailed in a memo handed down to agencies in April.

During the speech, Orszag also noted the federal government has begun using IT to flag and reduce the annual $100 billion in improper payments that go to the wrong people, are for the wrong amount or sent out at the wrong time. The technology includes computer edit checks and online score cards -- or dashboards -- that display key indicators and statistics about improper payments.

As part of an initiative to save $40 billion in contracting in fiscal 2011, OMB launched the Federal Awardee Performance and Integrity Information System, which enters data from federal contractors on items such as performance -- whether they were suspended or banned -- and combines them into a single database that all government contracting officers can access before buying services.

"This will dramatically reduce the chance that an underperforming contractor with one agency will keep winning business from another," Orszag said.

He referenced the president's open government initiative as an example of how agencies are trying to modernize while keeping down costs. The initiative focuses on disclosing more government information online, as well as encouraging greater collaboration between the public and private sectors.

"Another way to deliver better services is to empower people directly with the information they need to serve themselves," Orszag said. "As part of our open government initiative, we have unlocked the valuable federal data that the government has -- and put it out on Data.gov -- so that it can be leveraged for wider and greater use."