Do agencies still have year-end spending sprees?

OMB management efforts seek to encourage mindful spending

The end-of-year spending spree, a time-honored tradition in the federal government, appears to show no sign of abating.

Although in theory agencies take a more strategic approach to information technology spending than they did, say, a decade ago, most still end the fiscal with a flurry spending in effort to use the last of their appropriated funds. As always, they fear having their budgets reduced in the next fiscal year if they do not use all the money available in the current one. In other words, use or lose it.

In a recent FCW Insider post asking whether "use it or lose it" is still the operative philosophy, editor-at-large John Monroe reminisced: "When I was a cub reporter at Federal Computer Week in the early 1990s, the 'use-it-or-lose-it' mentality provided a good opportunity to track technology trends. A team of reporters would check in with execs in government and industry to see what products topped that year’s shopping list.

"In theory, that wouldn’t work now. Ideally, agencies are planning out their purchases carefully, based on some sort of IT master plan and acquisition strategy. But I can’t help but wonder if that’s the case."

Readers responded, saying, basically, yes it is.

"Based on all the contract requests that I see needing to be filled by October 1, I think the end-of-year feeding frenzy is alive and well," wrote consultant Jaime Gracia.

"Definitely alive and well in our contracting shop," an anonymous reader wrote. "There are no rewards for spending money wisely. If you don't use it, not only do you lose it for the current FY, your future budget is dinged as well."


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However, we tried to do it old-school -- assigning reporters to talk to agencies about their year-end acquisitions and priorities for the coming fiscal year -- and only a few responded.

Susannah Schiller, chief information officer at the National Institute of Standards and Technology, said she has been working closely with the NIST acquisitions team to complete planned IT acquisitions.

“Of the highest priority are IT acquisitions funded from the American Recovery and Reinvestment Act to improve NIST measurements and research,” Schiller said.

NIST received a total of $610 million in funding through the Act, and is spending it on several projects including $20 million in funds transferred from the Health and Human Services Department for standards-related research supporting the security and interoperability of electronic medical records, and $10 million from the Energy Department to help develop a comprehensive framework for a nationwide smart grid for the U.S. electric power system.

Prioritization of acquisitions for fiscal 2011 will depend on the still-to-be-determined appropriations to NIST, Schiller said.

“We expect to replace and upgrade our IT Service Management software, strengthen our continuous monitoring and intrusion prevention capabilities, acquire Trusted Internet Connection networking services and invest in an identity management system that is HSPD-12 compliant,” she said.

The Defense Information Systems Agency will be spending the last of its yearly funding according to its budgetary process. DISA spokesperson Tracy Sharpe said that among the agency’s fiscal priorities for fiscal 2010 were support for overseas contingency operations, cyber security and DISA’s congressionally mandated move to Fort Meade, Md.

Some of DISA’s fiscal priorities for fiscal 2011 include plans to deploy the host-based security system across DOD and isolate military networks from the public Internet. The HBSS monitors, detects and counters known cyber threats to defense networks. DISA also plans to complete work on what it refers to as a “demilitarized zone,” or DMZ, for its unclassified networks. The DMZ would eliminate the need for most defense agencies to connect to the commercial Internet, reducing the change of cyberattack.

Some agencies are prepping for expected budget cuts. The Obama administration is seeking to save $250 billion during the next decade through a three-year freeze on non-security discretionary spending, and has asked non-security agencies to provide plans for reducing their budgets by 5 percent.

In a speech to the Center for American Progress on June 8, Budget Director Peter Orszag said the 5 percent reductions would give agencies to ability to maintain the freeze while "meeting inevitable new needs and priorities."

The Homeland Security Department has not updated its official strategic plan since 2008. With the White House requesting cuts in spending, there are likely to be cuts in non-mission-critical programs in 2012. The National Flood Insurance Program initiative, Homeland Security Information Network and the Automated Commercial Environment are all on a list of 26 high-priority projects that OMB has targeted for potential cuts.

The Justice Department has cancelled its Litigation Case Management System as a result of an Office of Management and Budget efficiency review, and has reconfigured the FBI Sentinel case management system development program to bring it in-house. Both programs would expect to have shrinking budgets in 2012 as a consequence.

Another commenter on the FCW Insider blog summed it up this way: "Year-end 'dump money' is legendary in DOD and I've seen it every year since I started in 1980... Hey, whoever started the 'use it or lose it this year AND next' is the cause of these shopping sprees, not those who take advantage."

About the Authors

Technology journalist Michael Hardy is a former FCW editor.

William Jackson is a Maryland-based freelance writer.

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.


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