White House to agencies: Cut wasteful IT spending, then reinvest in smarter tech


OMB wants to slice 10 percent off tech budgets in 2014 to pay for more profitable IT projects.

The Obama administration is requiring all agencies to propose budget cuts to reduce information technology spending by 10 percent, according to a guidance released by the Office of Management and Budget.

The cuts would come in fiscal 2014, and be calculated based on the average IT spending in fiscals 2010 through 2012. The White House wants the cuts to focus on imprudent IT expenditures.

“Too often spending on IT is still wasted on duplicative investments, missed opportunities to leverage economies of scale, rising operational costs that starve new development, and mismanaged projects that lead to cost overruns and schedule slippages,” the guidance states.

The guidance calls for a reinvestment of between 50 and 100 percent of the savings into “priority” IT programs.

“Agencies should only propose reinvestments which demonstrate a favorable return on investment (quantitative or qualitative) to the agency within 18 months from the enactment of FY 2014 appropriations,” the guidance explains.

OMB recommended optimizing data management, improving energy efficiencies of IT equipment and improvements to citizen services among its suggestions for where agencies should reinvest savings.

The Defense Department would be the hardest hit by the cuts, having to trim their IT spending or reinvest more than $3.5 billion, according to OMB. The office advised agencies such as Defense to make the cuts from duplicative, underperforming and low-priority investments.

The guidance comes after President Obama cut federal IT spending by 1 percent in fiscal 2013.

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