Government should take advantage of outsourcing

Information technology is a late-20th century supernova overwhelming the old and then rendering obsolete its own advancements.

Technology opens new vistas creates opportunities and rewrites the rules about how to do business. A slide rule on my coffee table and an old portable typewriter bear mute witness to this. Now relics they once gave me an edge.

Unfortunately the federal government has been unable to take adequate advantage of opportunities offered by the supernova despite often dedicated and constructive efforts. This is a consensus view. It is publicly evident in major systems currently in the block at the Internal Revenue Service and the Federal Aviation Administration. But serious shortfalls are becoming visible throughout the government. For example the Year 2000 effort is identifying large numbers of relatively ancient IT systems still in use.

Why So Far Behind?

Why is the federal government so far behind? Principally I suggest because (1) the focus and attention of agency management is primarily on missions as they should be (2) agency personnel resist changes that affect jobs (3) agency resources for IT evaluations are limited in size and expertise and generally overburdened (4) too often studies and plans are biased time-consuming and superficial (5) procurement cycles can be unreasonably long and (6) the obstacles to outsourcing are absurdly high.

Barriers to Outsourcing

The focus here is on the last - that is the strong bias against outsourcing. It is central I believe to shortfalls of the past. The other factors listed contribute to that bias.

Fundamental differences exist among the stakeholders about how the federal government should solve its IT crisis. The administration is looking inward to bureaucratic solutions. It is (1) encouraging consolidations of certain IT support activities into single line agencies (2) talking about placing some activities in semiautonomous entities (as was done for the U.S. Postal Service) and (3) grafting a new superstructure of high-level boards etc. onto the same tired old dysfunctional processes. These include a CIO Council a Government Information Technology Services Board an Information Technology Resources Board and Presidential Technology Teams.

The administration is doing essentially nothing to allow much less encourage IT outsourcing projects as productive options. Instead the government seems intent on minimizing outsourcing - hoping it can be ignored. For example Office of Management and Budget Circular A-76 apparently will be the guide in considering IT outsourcing that affects only a few existing government jobs. Insurmountable hurdles will be the consequence.

First A-76 introduces smothering delays. In March the Defense Department reported that cost studies under A-76 consumed two to four years. And these are only part albeit a major part of potential A-76 delays. IT needs are too pressing and technologies are changing too rapidly to tolerate years of delays before going forward with projects.

Second A-76 was fashioned for a less dynamic and fluid era. (A-76's handbook was revised recently in ways not significant here.) Published 13 years ago long before the current IT crisis it was designed for leisurely comparisons of estimated costs of performing relatively stable and well-defined activities. IT systems however often are operationally revolutionary and can be obsolete in two years or less. A-76 is a complete misfit in that environment.

Finally there is the simple fact that A-76 studies are made by agency personnel. This introduces possibilities of bias toward preserving government jobs and of comparisons by persons who are not experts in special IT technologies that might best fit the need.

The administration's do-it-themselves philosophy is contrary to commercial practices where IT outsourcing is becoming commonplace and to the congressional intent enunciated in the Information Technology Management Reform Act (ITMRA) enacted Feb. 10. The act calls for "performance and results-based management" of IT systems. At the agency level this should include analyzing missions establishing goals and prescribing performance measures (40 USC 1423). Often the prudent and most time- and cost-effective way of doing these would be by contracting out to the commercial sector (with safeguards against later organizational conflicts of interest). However it appears that the commercial sector is not being invited to the table.

ITMRA further mandates that OMB direct agency heads before investing in new information systems to determine whether the function should be outsourced privatized or contracted out. (40 USC 1413) If the government is to leap forward in a reasonable time frame to modern IT systems those determinations must be made by experts acting expeditiously. This precludes use of the laborious time-consuming A-76 process. And once again contracting out of studies (with safeguards against later organizational conflicts of interest) often may be the prudent efficient and effective way of proceeding.

ITMRA is the law of the land. It calls for performance and results-based management and provides a sound much-needed matrix for enhancing government IT systems. This includes serious consideration of the possibility of outsourcing and contracting out - that is of using the private sector to solve particular situations.

Less Is More

William of Occam rebelling six centuries ago against the elaborate apparatus of Aristotelian metaphysics asserted "It is vain to do with more what can be done with less." His maxim later called "Occam's razor " has served Western civilization well. It remains relevant and useful although frequently phrased differently - for example "Entities should not be multiplied beyond necessity." Or "The simplest hypothesis should be used."

The administration should use Oc-cam's razor on the elaborate processes being imposed to solve the IT crisis and on the obstructions to serious use of the commercial sector for studies and solutions in the IT area.

Wallick is a partner in the law firm of Steptoe and Johnson a former member of the Section 800 procurement reform panel and a member of the Federal Information Technology Forum.


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