2005 IT budget picture still fuzzy

Many agencies remain unsure of how much money they will have to spend

Two months into the government's 2005 fiscal year, lawmakers passed a massive $388.4 billion omnibus spending bill that covers scores of agencies.

But even with the president likely to sign the bill this week, some agency information technology officials say they still don't know actual budget numbers for fiscal 2005.

All spending figures in the omnibus bill are subject to a further 0.83 percent cut, according to terms of the agreement that House and Senate lawmakers reached.

Meanwhile, civilian IT officials are not breezy about their budget prospects. "My dog sense tells me ...'05 is going to be a tight year for things like IT expenditures, unless they are in the priority areas of homeland security and defense," said William Leidinger, assistant secretary for management and chief information officer at the Education Department.

Another step in the budget process has put Leidinger and others in limbo. IT officials must wait for Office of Management and Budget officials to decide how to allocate the omnibus appropriations. OMB officials control how the money is spent — or not spent, said Ray Bjorklund, senior vice president and chief knowledge officer at Federal Sources.

In the past, he said, OMB officials typically rubber-stamped congressional appropriations. This year, however, they have warned that they will exercise their authority to apportion and, if necessary, restrict IT spending, he said.

Even as agency CIOs await specifics from OMB, the omnibus conference report offers clues about spending options.

The State Department's IT budget fared well in this belt-tightening season, CIO Bruce Morrison said. The omnibus bill includes about $800 million for the department's IT shop. That's only about 3 percent less than the previous fiscal year's $824 million budget.

"We're going to be hard-pressed to keep everything going, but it could have been worse," Morrison said. "Given the fiscal challenge facing the government, our feeling was that we got an adequate budget." He said major State initiatives would be funded, but "obviously we're going to have to cut some programs."

The Agriculture Department's CIO office would receive about $16.6 million. About $56.4 million has been allocated for the USDA's distance-learning, telemedicine and broadband programs. Another $33.2 million has been earmarked for the Animal and Plant Health Inspection Service's National Animal Identification System for quickly tracing disease outbreaks.

For larger projects, the USDA would receive $125.6 million for acquiring geospatial data and geographic information system technologies.

In the Commerce Department's fiscal 2005 budget allocation, the National Oceanic and Atmospheric Administration would get $3.94 billion. That amount includes $791 million for the National Weather Service to improve forecasting and $178.3 million for operational and research and development programs at the National Environmental Satellite, Data and Information Service.

For the 2010 decennial census, the Census Bureau would receive $393.5 million, $82.3 million of which is allocated for the Master Address File/Topologically Integrated Geographic Encoding and Referencing system.

The Office of Technology Policy would receive $6.5 million, and the National Telecommunications and Information Administration would get $39.2 million. The National Institute of Standards and Technology has been allocated nearly $709 million, including $384 million for its core scientific and technical programs.

Nearly $51 million has been allocated to the Department of Housing and Urban Development for IT needs across HUD agencies. Of that, the Federal Housing Administration has $15 million for IT systems for the mutual mortgage insurance program and $9.6 million for general IT systems.

The Interior Department would get $500,000 for certification and accreditation of IT systems, $300,000 for accessible data transfer and $50,000 for the department's enterprise services network. It would also get $54,000 for e-government initiatives.

For the Treasury Department, lawmakers upped the Bush administration's ante on efforts to stop terrorist financing and money laundering by adding $8 million to the president's already pumped-up $64.5 million funding request for the Financial Crimes Enforcement Network.

Legislators settled on $72.5 million for the network, including $7.5 million for the agency's new data warehouse, called BSA Direct. The Web-based, $18.5 million project is slated to become fully operational by October 2005.

The Labor Department would get $30 million for acquiring IT, architecture, infrastructure, equipment, software and related tools that will be allocated by the department's CIO.

NASA's CIO requested $38 million this year, which is more than the $22 million allocated last year. "We know roughly that we almost got the full appropriation" for the total amount, said Brian Dunbar, a NASA spokesman.

Transportation Department officials are still reviewing their numbers but said the CIO's office would get about $11.3 million, compared with last year's $9.9 million. The administration had requested $16.7 million. Lawmakers appropriated $232 million for intelligent transportation systems. n

Judi Hasson, Florence Olsen, David Perera, Dibya Sarkar and Aliya Sternstein contributed to this story.

***

Competitive sourcing survives

The Bush administration's competitive sourcing initiative remains largely intact in the fiscal 2005 omnibus spending bill. The package of nine spending bills does not include a provision that would have prevented agencies from using a revised version of Circular A-76, which governs competitive sourcing.

Lawmakers did, however, include language restricting some agencies' competitive sourcing efforts. They renewed an annual ban on using Agriculture Department funds to support competitive sourcing studies related to rural development or farm loan programs. And a section of the Interior Department portion of the bill limits the money that Interior, the Energy Department and the Forest Service can spend on competitive sourcing studies in fiscal 2005. Interior has a cap of $3.25 million, Energy a ceiling of $500,000 and the Forest Service a limit of $2 million.

Competitive sourcing is one of five initiatives on the President's Management Agenda. It encourages agencies to cut costs by forcing federal employees who are not involved in core government functions to compete against private-sector bidders to perform the work.

Final passage of the omnibus bill concludes a legislative session with mixed results for competitive sourcing opponents. Lobbyists for federal workers' unions saw their most prized amendments in this and other bills weakened or stripped out, but they gained attention for their positions.

"We've done a really good job of highlighting this issue," said Beth Moten, legislative and political director of the American Federation of Government Employees (AFGE).

Of nine anti-competitive sourcing amendments proposed by lawmakers since January, most enjoyed widespread support, Moten said. Measures that failed did so because "the Bush administration is very successful in threatening to veto the entire bill or to strip members' projects," she added.

"The smaller the appropriations bill in question, the more likely we are to prevail," said John Threlkeld, AFGE's Capitol Hill lobbyist.

A tighter Republican hold on both chambers of Congress in the coming legislative session might not bode well for competitive sourcing foes, said Olga Grkavac, executive vice president of the Enterprise Solutions Division of the Information Technology Association of America. Republican representatives "might tend to be more supportive of the administration's position," she said.

But union officials say the main stumbling block to passage of their measures isn't party membership but pressure from White House officials. The main lesson learned from this year's session is "whatever we can do to expose what's going on in Congress has got to be done," Moten said. She added that next year will bring renewed competitive sourcing efforts.

It's a battle both sides are gearing up for.

— David Perera

IRS modernization goes on the Congress diet

Congressional appropriators served up relatively slim pickings for the Internal Revenue Service's modernization effort, despite agency officials' already trimmed budget request for fiscal 2005.

Congress approved $205 million for the business systems modernization project, $80 million less than IRS officials had requested. As a result, modernization officials must make significant adjustments to their 2005 plans, said W. Todd Grams, the IRS' chief information officer. "The budget is what it is," he said.

The final tally for IRS modernization is more than Senate appropriators originally wanted to give the troubled project, however. In September, they voted to appropriate only $125 million for the effort to replace the Kennedy-era tax processing systems.

Modernization funding was cut partially to free funds for more tax law enforcement, a Senate staffer said at the time. Senate appropriators approved $4.5 billion for enforcement — $348 million more than they appropriated in fiscal 2004 and $241 million more than House appropriators voted for in July.

The final amount approved for enforcement in the omnibus spending bill was $4.3 billion.

— David Perera

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