White House is set to unveil guidance on IT purchases

The White House is poised to announce changes to the way agencies buy about $80 billion in information technology annually.

The guidance, which the Office of Management and Budget will release on Nov. 19, represents the culmination of four months of meetings with agency IT chiefs and a close examination of troubled technology investments, OMB officials said.

Leaders of the industry group the Professional Services Council, who met with OMB officials last week, said the new strategy likely will be similar to legislation proposed by Sens. Thomas Carper, D-Del., and Susan Collins, R-Maine, that passed the Senate in May. The bill (S. 920) would require project managers to alert chief information officers quickly of investments that have veered off course on cost, schedule or performance. Under the proposal, CIOs who see deviances of at least 20 percent must report them to their agency heads, relevant congressional committees and OMB. More extreme cases -- projects that are off target by at least 40 percent -- would spark remedial action, such as cancellation.

Much of this information would be tracked on a public website similar to the Obama administration's IT Dashboard. The House has yet to vote on the bill.

On Oct. 25, Acting OMB Director Jeffrey Zients said he would present his strategy during an event hosted by the Northern Virginia Technology Council on Nov. 19. "I'll offer recommendations on reforming federal IT, ranging from project management to procurement to budgeting and personnel reforms -- and I hope to discuss with the private sector there and in other venues how best we can transform federal IT," he wrote on the OMB blog.

Alan Chvotkin, PSC's executive vice president, said the OMB guidance "won't be as detailed [as the Carper-Collins legislation] with all the hoops to go through," but the structure will involve similar transparency and reporting requirements. "They already are well down the road to transparency with dashboards and such," and the new policy would "set parameters for trigger points," he added. Chvotkin anticipates each program category will have different thresholds for reporting problems, as opposed to the blanket boundaries Carper's legislation prescribes.

Carper, chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, said the OMB recommendations likely will build on the Obama administration's earlier strides in increasing transparency into the government's IT investments. "Providing Congress and the public with critical information on the costs of information technology projects, whether they are progressing on time and working effectively will help ensure that taxpayer money is being spent wisely," he said. Carper added he will continue to work on making such initiatives permanent by pressing for action on his bipartisan bill.

On June 28, OMB embarked on a three-tiered process to cut waste in federal IT spending. On that day, officials said they had halted upgrades on financial management systems -- worth a combined $20 billion -- to review and then either downsize the projects or kill them. Typically, the technologies agencies develop for managing finances are too complex to build in a timely or cost-efficient manner, critics say.

The White House has not disclosed which of the approximately 30 financial systems that were put on hold are still pending. In an update in September, OMB officials said they had shelved computer projects at the Small Business Administration and Veterans Affairs Department, which would save the government about $536 million. Officials on Tuesday said Zients likely will offer more information about progress on Nov. 19.

In August, OMB, in cooperation with agencies, put program managers and contractors on notice that nearly 30 mission-critical projects, all of which had encountered problems, were at risk of losing funding unless construction plans were revamped. OMB officials and agency managers have since reviewed each program to determine its fate in the fiscal 2012 budget, which the president will issue in February.

Zients' recommendations are the third part of the White House effort to trim fat in IT budgets and boost productivity.

According to the IT Dashboard, agencies during the past year have downgraded or eliminated many major projects for a variety of reasons, such as a system was erroneously categorized as major or it has since been consolidated into another investment. A few were terminated, including a $1.7 million Energy Department contractor business and administrative system. The Labor Department stopped funding a $189,000 document and records management system because it needed the money for higher priority IT projects, according to agency officials.

It's unclear when the list of downgraded and terminated investments was last updated or when the funding decisions were made, so it is difficult to discern whether these actions are the result of this summer's acquisition crackdown.

"This is really a good example of what aggressive management and attention by the agencies and OMB can be," Chvotkin said. "It's not to say no [to projects]. It's to hold the agencies accountable for the strategy that they are looking for." The one question Chvotkin raised is whether department officials have had enough say in OMB decision-making to prevent cuts from interfering with agencies' missions.

TechAmerica, another trade group, recently detailed its own recommendations for revamping IT purchases and deployments that it wants OMB to consider, the association's officials said on Tuesday. The 33-step action plan lists goals such as cultivating a workforce of professional program managers, developing systems on a piecemeal basis and improving coordination between project managers and users, as well as private sector partners.