The IT squeeze

The House and Senate worked last week to move along overdue fiscal year 2000 appropriations before taking a month-long break, but tight budget caps could threaten civilian agencies' information technology projects.

Trying to abide by a 1997 agreement with President Clinton to cap federal spending and thereby build a budget surplus, the House and the Senate have passed bills that reduce or eliminate spending for IT projects and for agencies that rely heavily on IT.

"If the budget caps are not opened up, the impact [on IT] will be severe," said Olga Grkavac, executive vice president of the Information Technology Association of America's Enterprise Solutions Division. "There may be some very popular program[s] that can't be funded and that can't not affect the IT industry...These program cuts for some agencies would be bordering on Draconian."

In most cases, Congress pointed to tight budgets for cutting IT spending and tended to target projects that were in the early stages of development.

NASA received massive cuts because of its numerous new programs. "Projects which are specifically noted for cancellation are for the most part very early in their development, so sunk costs are minimal and long-term savings are significant," according to the House report that accompanied the NASA funding bill.

The same reasoning was used to cut the $14.6 million in the Energy Department's budget for the Next Generation Internet project that would increase dramatically the speed and bandwidth of the current Internet. "The committee has had to cut existing programs and make hard choices and was unable to justify starting these new spending programs," the report stated.

For the Agriculture Department, neither the House nor the Senate gave the department $74 million for the Support Services Bureau, which would support the Common Computing Environment project to install a common set of desktop computers and applications at USDA service centers nationwide. The Senate cited "funding constraints" for cutting the budget.

Another IT project casualty was the Federal Intrusion Detection Network, which the Clinton administration wants to build to monitor intrusions into government systems. The House cut all funding—$2 million that the Justice Department asked for to begin planning the network—because of unresolved questions about various agencies' responsibilities for the network, as well as on deployment plans.

The Treasury Department also suffered cuts. House and Senate officials said budget constraints did not leave enough money to fund a security assessment for the department's Financial Management Service. The assessment aims to pinpoint areas where FMS, which writes most of the government's checks, needs to improve its physical and computer security. An FMS official said if no money is available, the project would continue, but more slowly.

Lawmakers also cited a tight budget for denying funds for the Customs Services' $1 billion Automated Commercial Environment program, which would replace Customs' aging import processing systems used to assess tariffs and target cargo for inspection at the border. The House explained that it had cut funding for ACE because the Clinton administration had not proposed adequate funding for it.

Legislators said they did not have the money to fund the early stages of an FMS project to modernize its Central Accounting System and trimmed the agency's $53.6 million request for departmentwide systems and capital investments by a third. In this category, the House earmarked $6 million out of $16 million requested for modernization of Treasury's human resources systems, but the Senate did not allot a specific amount for any project.

President Clinton's Information Technology for the 21st Century Initiative also took a hit last week. The President's Information Technology Advisory Committee concluded the initiative was needed because the government is not investing enough in IT research. The House earmarked only $35 million of the $146 million that the White House requested, less than one-quarter of what Clinton asked for.

Congress cut IT budgets in part as a way to promote its agenda to push agencies to defend how technology will improve agency performance, said Bob Dornan, senior vice president at IT procurement consulting firm Federal Sources Inc., McLean, Va.

For example, the House appropriations bill for the Justice Department would order the Immigration and Naturalization Service to suspend deployment of its Ident system, which border patrol agents use to verify immigrants' identities. INS wanted to spend $20 million on Ident in fiscal 2000, but the House bill would force INS officials to halt the program until they had submitted a plan for integrating Ident with the FBI's fingerprint systems. The House appropriations committee said it was concerned that the system could not adequately identify wanted criminals who may be apprehended by INS border patrol agents and inspectors at the border.

Some IT programs have dodged Congress' knife. The Defense Department—with aging technology and missions in the Middle East and Eastern Europe—will get more IT money than it asked for in the House bill: $16.5 billion vs. a requested $16.2 billion.

In addition, the House has proposed funding the multibillion-dollar 2000 census with emergency money. The Census Bureau earlier this summer asked Congress for an increase of millions of dollars to beef up IT programs, such as $268 million to improve the data collection infrastructure.

The emergency funding means Congress realizes it can't squeeze IT budgets too tightly, Grkavac said. "Either they'll break [the budget caps] directly, or individually through this emergency funding," she added.

Bills remaining to be debated include those for funding the departments of Education, Health and Human Services, Labor, Veterans Affairs and Housing and Urban Development, as well as NASA.

-- Elana Varon, Colleen O'Hara and Doug Brown contributed to this article.