Contractors want to review troubled technology projects with OMB

Some vendor groups have asked the Obama administration to let contractors sit in on closed-door meetings that decide the fate of dozens of information technology projects that are worth a combined $30 billion.

The Office of Management and Budget on Aug. 23 put industry and federal project managers on notice that the administration will kill IT projects identified as high risk if chief information officers and OMB see no value in continuing them. As part of a shakeup in the management of IT projects, which are notoriously inadequate and off target by millions -- sometimes billions -- of dollars, OMB spent two weeks meeting with agency chief information officers to compile a list of 26 mission-critical systems that have hit road bumps. Some, including a project to automate retirement payments for federal employees, have been shelved temporarily.

Now they are under heightened review as OMB and agencies prepare the fiscal 2012 budget, with an eye toward scaling back or scrapping projects that do not make sense to maintain. The goal is to save projects by reprogramming them from top to bottom or, as a last resort, rebidding them. The budget will be released in February 2011.

Washington industry groups admit the IT acquisition system needs retooling and they are making recommendations to administration officials on how they can revamp federal procurement rules. For starters, when federal CIO Vivek Kundra holds meetings -- or TechStat sessions -- with agency CIOs to discuss how to fix a project, he also should have independent sessions with the projects' contractors, trade association TechAmerica said.

"If a project ended up on the risk list, then he should plan to have TechStat Sessions with not only the government team but the industry team too," said Trey Hodgkins, vice president for national security and procurement policy for TechAmerica.

The industry group had a chance to relay some of its suggestions to Kundra on Aug. 20, three days before he released the list of risky projects.

TechAmerica has taken a hard-line stance that OMB should not impose blanket suspensions of IT project categories. On June 28, the White House halted all financial management systems, even those that were performing well, to reduce each system's specifications as a way of accelerating rollouts.

If OMB brought vendors "in separately, it would be both helpful and beneficial in trying to identify problems and find solutions," Hodgkins said. The worst-case scenario, which could happen, is that government team members would peg responsibility for failures on the contractors, he said.

In addition, TechAmerica would like to see the actual data that helped inform OMB's decisions about which projects are high risk. The IT Dashboard, a website that the administration billed as a way to track the progress of major IT investments, does not indicate problems with some projects. For example, the installation of the FBI's next-generation ID system is not running up excessive costs or missing deadlines, according to the site.

Such discrepancies are another reason industry members should be involved in the TechStat sessions, Hodgkins said. Contractors could help OMB discover incomplete or old information that the White House might have relied on to declare a system unsound.

TechAmerica officials said Kundra took their recommendations under advisement.

OMB officials on Tuesday said the administration wants to incorporate proven practices from the private sector as it modernizes government. "We are of course open to innovative ideas from the private sector in this process as well," OMB spokeswoman Meg Reilly said.

The Professional Services Council, which also represents contractors, supports the White House's scrutiny and potential project interruptions, but objects to shutting out industry from the decision-making process.

"OMB clearly has an important role in ensuring that programs not only meet cost, schedule and performance expectations, but that they also continue to mirror agency mission requirements. As such, reviews such as this do make sense," said Stan Soloway, PSC president and chief executive officer. "At the same time, the process should be an open one."

He added that the corrective actions under consideration should be shared with all parties affected, including vendors, since good ideas can come from many quarters.

It also is important that the White House account for the unintended consequences of its review process, which could slow projects, Soloway said.

OMB must make sure it has fully addressed the predictable, as well as unforeseen, ramifications such as program delays, funding disruptions and other possible outcomes, which can affect the workforce, he added.

Reilly responded that OMB "will absolutely weigh the consequences of any changes to the timelines or budgets to ensure that these interventions are productive."