OMB demands agencies trim IT for 2014

As expected, the Obama administration is demanding slimmer agency IT budgets for fiscal 2014, and asking for details on how officials intend to reinvest the savings they can eke out.

The Office of Management and Budget wants agencies to propose reductions in IT spending that equal 10 percent of their overall spending from fiscal 2013. It also wants proposals for OMB’s consideration on how to reinvest at least 5 percent and as much as 10 percent of these savings in priority IT investments, according to new Exhibit 53 guidance

Each agency reports its IT spending portfolio annually to OMB through an Exhibit 53, which provides budget estimates for all IT spending programs and identifies those that are major programs. Exhibit 300s are business case summaries required by OMB for all major IT programs.

In the new guidance, administration officials are hammering on the problem of poor spending habits.

“Too often spending on IT is still wasted on duplicative investments, missed opportunities to leverage economies of scale, rising operational costs that starve new development, and mismanaged projects that lead to cost overruns and schedule slippages,” the guidance states.

OMB offered some suggestions for where to look for cuts: commodity IT contracts, which often duplicate one another; underperforming projects; and investments that have a low priority or that are of lower value.

Similarly, for reinvestments, OMB suggests: improving to citizen services; adopting shared services; consolidating commodity IT, such as data centers; and improving the security of the agency’s information and IT assets.

If an agency does not propose to reinvest at least 5 percent, officials must provide a justification explaining as to why they are unable to propose these reinvestments, the guidance states.

Furthermore, in the administration’s effort to prove its spending is worthwhile, agency officials have a new form to fill out as they develop their fiscal 2014 budget submissions.This new exhibit, called Exhibit 53D, asks for similar information. It is where agencies will document the means they used to meet the 10-percent reduction in their IT budgets for the fiscal year and where they propose to reinvest some of these savings.

The new guidance on IT spending for next year builds on older OMB guidance released in May.

In that guidance, officials required agencies to use evidence in submitting their budget requests. “Evidence,” in this case, means using rigorous evaluations of programs’ performance as part of the budget-setting process. And evidence could bring an agency more money.

“Many potential strategies have little immediate cost, and the budget is more likely to fund requests that demonstrate a commitment to developing and using evidence. The budget also will allocate limited resources for initiatives to expand the use of evidence,” the memo reads.

Agency budget submissions also should include a separate section on agencies’ most innovative uses of evidence and evaluation, it adds.

The memo invites agencies to propose new evaluations, offering some specific suggestions:

  • Low-cost evaluations using administrative data or new technology.
  • Evaluations linked to waivers and performance partnerships.
  • Expansion of evaluation efforts within existing programs.
  • Systemic measurement of costs and cost per outcome.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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Reader comments

Tue, Aug 21, 2012 Zoopy

I agree with @Steve. These shotgun approaches give credence to the accusations that the government prefers the appearance of efficiency and efficacy, rather than the actual versions of the same. If the OMB has a good reason for the ham-fistedness of their approach, they should publicly explain it.

Tue, Aug 21, 2012 Steve Flyover Country

There certainly may be some potential savings in consolidating IT services where practical, and there may be duplicative projects that could be merged. Unfortunately this notion of just ordering everybody to slash 11% irregardless of what their IT needs are is a very short sighted plan. Management seems to forget that good IT is a force multiplier that saves more in other areas than is spent in IT. We could cut IT 100%, as long as we are willing to start staffing up the typing pools and legions of clerks it would take to run the bureaucracy without IT. A blind shotgun approach to IT cost cutting may save 11% in the IT budget, but if it increases other costs by 3 times as much money then it is a pretty dumb idea.

Tue, Aug 21, 2012 Zoopy

The DoD is decent at tracking the purchase cost of IT, but it's lousy at tracking (1) the labor cost associated with their insanely red-tape-laden "cost-conscious" buying rules, and (2) the opportunity- and mission-costs which result from the massive delays imposed by their "smart" buying processes. I can't imagine how much labor money it costs the DoD in order to save $10k on a small purchase of desktop computers.

Tue, Aug 21, 2012 DC Fed Washington D.C.

Kinda knew this was coming (at least the 10% reduction part). But the re-investments part was sprung on us with little or no advance notice. So, let me see if I get this right; spend quite a bit of manpower reviewing all planned expenditures (some of which have been in the pipeline for a few years) with the major goal of identifying candidates for reduction resulting in 10% savings. Then identify new or revised ideas that were not in the previsously published plans and "re-invest" at least half of the "savings". And just to make sure you're paying attention, if you cant find 5% worth of worthy new "investments", write a term paper explaining why. Did it ever occur to anybody that we have been paying attention for the last few years and we already eliminated the obvious wastefull programs? Did it occur to anyone that we took our obligations seriously when we formulated the 53's for FY12 and FY13 and the "investments" we planned and published were considered essential and gave priority to cost efficiencies? So, now I have to explain to a consituent user of IT services that I will cut that service by up to 10% and will shortly thereafter explain to the same consituent how I have a great idea for new efficiencies that I have never tried before but I'm going to use at least half the money I took from his service to pay for it.How much more convoluted can this three ring circus get? Want to really save 10%? Retire the OMB and their silly guidance and "unchain" the feds.

Tue, Aug 21, 2012

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