Innovation fund in limbo

A unique pot of money that was established in 1995 to nurture technical innovation governmentwide and was widely championed by Vice President Al Gore has been cut off from its source of income, leaving the fund's future in question.

The General Services Administration, which supported the Information Technology Innovation Fund (ITIF), has decided not to funnel money into the fund this year to save money and because it felt the structure of the fund made it inherently unfair to some government agencies, said Frank Lalley, assistant commissioner for service delivery at GSA's Federal Technology Service.

The issue of ITIF, he said, "became more prominent" with the expiration of FTS 2000 and the inauguration of its successor, FTS 2001. Under FTS 2000, government agencies were required to go through GSA to buy long-distance telephone services. GSA charged agencies about 8 percent of the agencies' total long-distance bill to cover the bill processing. GSA funneled part of that money, about 1 percent of the government's total long-distance bill, into the innovation fund.

Under FTS 2001, agencies are not required to contract with GSA for long-distance services. To attract agencies to use FTS 2001, GSA had to lower long-distance rates as much as possible, which led in part to its decision to cut off payment to the fund, which had amounted to about $6 million annually.

Any agency could draw from the fund, even those that decided not to go through GSA for long-distance services.

"We don't think it's fair for our customers to bear the burden where all of government is benefited," Lalley said. "We all regard the innovation fund as an essential project. The only thing in question is the funding source."

Supporters will try to get more funding for ITIF during the 2001 budget process, said Gayle Gordon, assistant director for information resources management at the Interior Department's Bureau of Land Management and chairwoman of the ITIF.

About $3 million remains in the fund. Gordon said the ITIF's board may use the money to pay for new projects. The board also plans to use the fund to push along projects that already have received funding.

"We will be monitoring the projects under way right now and focusing on tech transfer for what we've gotten so far [to] get the benefits into the hands of as wide a constituency as possible," Gordon said.

Jim Flyzik, the Treasury Department's chief information officer, helped start the fund in 1995. Flyzik said he and other ITIF advocates will push hard to find a way to keep the fund, or something like it, alive.

"There has to be a way to fund governmentwide programs," he said. "Some of the highest payoffs in terms of return on investment are when we coordinate them on a governmentwide basis. If we can make a strong case that it's in the best interest of the government, then I think we'll have to make a presentation to OMB and Congress, the appropriations folks. If we can sell the program on its merits, then I think we can get it done."

Flyzik said he and others are trying to persuade Congress to insert language into the 2000 budget that would give money to the CIO Council. Some of that money could be used for governmentwide projects, he said.

To date, the ITIF has doled out about $21 million to 42 proposals. Flyzik, for example, was one of the driving forces behind the Center of Excellence in Information Technology, which won an innovation grant in 1998. The center will be a place "to showcase best practices that are going on throughout government - things that are going on that can be imported to other agencies," Flyzik said.

CEIT, which can be accessed at, eventually may have a physical center "where we will be able to show applications across government so that agencies will be able to go down and see what is going on in other agencies," Flyzik said. "We think it's a way to improve dramatically the way government uses IT."

Roger Baker, the Commerce Department's chief information officer, agreed that the fund is needed. The innovation fund has helped Commerce with several projects, including the "electronic fish-catch logbook." The pilot project, run through the Northwest Fisheries Science Center in Seattle, puts personal computers on ships and ties information about fish catches together in a database.

"There needs to be a fund that has dollars for things that are innovative and useful. There have to be other ways to fund it," Baker said.


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