Pentagon braces for IT spending cuts

For the first time in years, officials foresee significant budget cuts in 2005

As lawmakers prepare to vote on the fiscal 2005 Defense budget this week, Defense Department information technology officials could be bracing for the first cuts in Pentagon IT spending in recent memory.

Lawmakers are prepared to cut about $500 million from the Pentagon's $27.4 billion IT budget to express their dissatisfaction with DOD officials' progress on the multibillion-dollar Business Management Modernization Program (BMMP), according to military officials and recent congressional documents.

Earlier this month, Government Accountability Office officials released another report criticizing the department for wasting money and poorly managing business systems.

In the fiscal 2005 Defense Appropriations bill approved last month, House Appropriations Committee members used strong language to express their displeasure with what they said was a poor showing on BMMP, DOD's agencywide program for modernizing business systems and streamlining business processes.

Language in the House bill says that "BMMP was initiated in July 2001 with a goal of developing a departmentwide business enterprise architecture as a part of the secretary of Defense's transformation goals."

It also says that "since implementation, Congress has appropriated over $300 million for BMMP, yet the Government Accountability Office reports no significant changes in the Department of Defense's business architecture or its investment in existing and new systems."

DOD officials have asked lawmakers to reconsider the proposed cuts in IT spending. An official in DOD's Office of the Chief Information Officer said, however, that lawmakers have indicated they do not plan to consider the department's appeal because it came too late in the process.

In their appeal, DOD officials asked House Appropriations Committee members to reconsider their proposed $270 million cuts in the military's IT research, development, training and evaluation budget and proposed $226.4 million cuts in other IT initiatives. Officials said the cuts are detrimental to the department's goals of network-centric warfighting and the DOD secretary's transformation goals.

Among dozens of proposed reductions, the House appropriations bill would cut $43.9 million from BMMP and $70 million from Horizontal Fusion, a global strategy for warfighters and analysts to quickly access and share information.

DOD officials also appealed to lawmakers to avoid research cuts that they said will slow progress on new systems such as the Defense Integrated Military Human Resources System, which would provide information and intelligence capabilities.

Although the House Appropriations Committee bill cuts the DOD IT budget by $496.4 million and the Senate bill proposes $113.5 million in cuts, the reductions are less than those proposed earlier by DOD authorizing committees.

In the fiscal 2005 Defense Authorization bills approved in May, House Armed Services Committee members voted to reduce the DOD IT budget by $726 million. Senate Armed Services Committee members voted to cut $200 million.

Military and industry officials reacted to the 2005 appropriations bills with warnings that cutting IT research funds will cause DOD to spend more in the future. Cuts to enterprise IT programs and initiatives only slow their development, said Dave Wennergren, the Navy's CIO, speaking earlier this month at a meeting of the Industry Advisory Council. "The bills need to cut the funding of legacy systems," he said.

House appropriators cut $35 million from the Navy's Converged Enterprise Resource Planning System and $29 million from the Navy's IT research programs.

Industry leaders also called the proposed cuts shortsighted. Ray Bjorklund, a senior vice president at Federal Sources Inc., a market research firm, said Congress should consider the consequences of cutting IT research funding. "If you cut investments designed to save money down the road, an agency will incur more costs, such as continuing to operate less efficient legacy systems."

Citing the current circumstances in Iraq and the ongoing war on terrorism, Bjorklund said he did not know why Congress would send a message to DOD on its business modernization program through the 2005 budget. "I am a little bit surprised that Congress is treating DOD this roughly," he said.

In sum, the military services' IT budgets fared better than DOD's CIO budget. House appropriators cut the Air Force IT budget by $110 million. The Navy lost $46 million, and the Army $27.5 million.

Speaking at the recent IAC meeting, Lt. Gen. Steve Boutelle, the Army's CIO, said he felt comfortable with Congress' budget figures. Wennergren said they could have been worse. And Air Force CIO John Gilligan said the numbers were much better than last year's, when DOD's IT programs faced losses of nearly $2 billion.

Lawmakers largely rescinded those proposed reductions by the time they approved the final bill.

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