Enough coddling—OMB demands results from IT

After three years of holding agencies’ hands, waiting for their infrastructures to settle into place and putting up with systems chiefs’ anxieties, Bush administration officials think it’s time that federal IT deliver on the promised results.

The Office of Management and Budget and the CIO Council have set specific goals for agencies to meet over the next six months that federal IT officials said will demand better performance. The council detailed the criteria, which agencies must meet by October, in its fiscal 2004 strategic plan.

Agencies that fail to live up to the goals will face consequences. “Agencies need to have a clear definition of where they want to be and when they should get there,” OMB deputy director for management Clay Johnson told lawmakers at a hearing this month on IT management.

“We can get to where we want to be. It is just a question of making sure there is plenty of rigor and discipline to make sure agencies understand what their goals are,” he told the House Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census. “We have to make sure those disciplines are in fact enforced, and proper attention is paid to the three or four most important parts of getting IT management to where we all want it to be.”

Johnson and Karen Evans, OMB’s administrator for e-government and IT, met earlier this month to figure out how to increase accountability among agencies. The obvious conclusion: withhold funding. The administration has put 621 IT projects with budgets totaling $22 billion on a watch list because they don’t meet at least one of three major requirements: adequate security, a qualified full-time project manager or defined performance measures.

“We laid a wonderful foundation at the start of this administration by using everything available to get a handle on IT investments,” Evans said. “We have to produce results and achieve outcomes.”

Threat of withholding

Although the threat of withholding funds is always there, it rarely happens. One of the most significant examples occurred in 2002 when OMB required the Defense and Veterans Affairs departments to collaborate on their health systems projects. The administration withheld more than $100 million from both departments until they revamped their Exhibit 300 business cases.

The administration’s decision to withhold funding more often follows a series of steps it has taken since January to improve IT management:
  • OMB detailed new plans for the SmartBuy enterprise software-licensing program.

  • It told agencies to fix IT security before spending 2004 funds on new systems or upgrade efforts.

  • The administration redirected duplicative funds for financial, human resources and back-end grants systems.

But as OMB increases pressure on agencies, some executive branch officials said CIOs have the most authority to make the necessary changes.

“Implementing all these things OMB is asking for through the budget process clearly resides in the departments and agencies, so we can’t get too hung up with OMB’s oversight,” said David Powner, the General Accounting Office’s director of IT management issues. “The CIOs must put in effective policy and governance.”

One senior agency official said it is important for CIOs not to rely on quick fixes to appease the administration.

“OMB will have to be flexible with their deadlines for agencies,” the official said. “They don’t know what the operational issues are because they are making decisions from the 50,000-foot level.”

Bill McVay, a former OMB policy analyst and business case expert, said the administration typically uses its power to withhold funds as a last resort.

“This is a sign OMB will use it more,” said McVay, who now is vice president for e-government at DigitalNet Inc. of Herndon, Va. “This is OMB’s way of showing that IT management and the budget process are inextricably linked.”

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