OMB's rule: Pay as you go

With the pass-the-hat funding method leaving many agency e-government projects bare-headed, Bush administration officials are looking to formalize interagency fee-for-service arrangements to fund mature e-government initiatives.

The finalized interagency fee structure plans for four e-government initiatives —

e-Training, Geospatial One-Stop, e-Grants and Recruitment One-Stop — are due later this month, said Karen Evans, the Office of Management and Budget's administrator for e-government and information technology.

"The concept of fee-for-service is a way the government runs day in and day out," said an OMB official who requested anonymity. Having agencies pony up directly for the cost savings from the e-government initiatives will institutionalize them into day-to-day government operations, the official added. The goal is for OMB to play "a much decreased role in the process. It's agencies providing services" to one another, the official said.

GovBenefits and Recreation One-Stop also will start charging agency users and citizens in the near future, the official said. Both initiatives are part of the government-to-citizen portfolio of e-government projects, but Recreation One-Stop will charge only citizens.

Officials at the Labor Department — GovBenefits' lead agency — will charge agencies that make use of the site. Recreation One-Stop officials' plans to revamp the portal into a single online interagency federal recreation information and reservation Web site are on hold following a mid-September contract award dispute that Government Accountability Office officials are trying to resolve.

Fee assessment methods will differ from initiative to initiative, with possibilities ranging from subscription fees to transaction charges, the official said. "It's not monolithic. ... The concept of fee for service can be modeled," the official said.

The switch is not without dissenters.

Charging for services could end up creating a perverse incentive for agencies, causing them to curtail e-government usage if OMB officials establish a pay-to-download system, another federal official said.

"One could imagine a scenario whereby you are essentially taxing agencies on the number of times they downloaded material from the Web site," the official said. "If it isn't broke, don't fix it. We've got a workable arrangement right now, and it does involve financial contributions from our cooperating agencies."

But segueing into fee for service is a natural result of e-government officials ending their baby-steps phase, other sources said. In recent months, the word "mature" has been used more often to describe the initiatives. Most recently, Evans said 10 of the 24 projects fully operational and she hired a private-sector marketing firm to develop a promotion strategy for them.

"Pass the hat was really a business model for developing the application model," said Mark Forman, former administrator for e-government and IT at OMB. Assuring agency funding means drawing a clear line between usage and cost savings, he added. "Fee-for-service allows you to align expense with demand in a deployed initiative," he said. As a result, agencies no longer need to contribute to e-government according to OMB directives but based on their actual service needs.

The new funding direction is largely unrelated to recent e-government spending restrictions in some congressional appropriations bills, Forman said. The House Interior Department's appropriations bill, for example, included language blocking funds for four of the 24 e-government iniatives: Safecom, Disaster Management, e-Training and e-Rulemaking.

OMB officials were "thinking about how to implement this before those riders were introduced," said Dan Chenok, former OMB branch chief for information policy and technology.

A fee-for-service plan would use existing spending authorities "and identify a structure where agencies are getting value for that service and reimburse the service provider," he added.

A fee-for-service approach is "the next step in taking these initiatives and preparing them as a long-term solution," the OMB official said.


Helping each other

Under a fee-for-service structure, agencies would pay whenever they used a particular e-government site. Such a system would help agencies share the expense of maintaining centralized e-government Web portals. Four initiatives will begin charging fees for services soon:

E-Training, a one-stop portal for federal workforce training products and services.

Geospatial One-Stop, which provides federal and state agencies with map-related data.

E-Grants, a portal for finding, applying for and managing federal grants.

Recruitment One-Stop, a portal that allows people to apply for government jobs online and get feedback on job status and eligibility.

About the Author

David Perera is a special contributor to Defense Systems.


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