How IT legislation can supercharge shared services

A bill authorizing funds to replace legacy IT is vital to sustaining and accelerating shared-services momentum among agencies as the next administration takes office, according to top government managers.

The Modernizing Government Technology Act of 2016, passed by voice vote in the House on Sept. 23, combines a cloud funding measure that originated in the Senate and was pushed in the House by Rep. Will Hurd (R-Texas) with an Obama administration-backed bill that calls for a $3.1 billion governmentwide revolving fund to retire and replace legacy systems.

"It gave us a workable framework to modernize IT systems and implement resource-efficient shared services among agencies," said David Mader, controller at the Office of Management and Budget, during a panel discussion at the Association of Government Accountants' Shared Services Summit on Oct. 4. "The legislation will be foundational" for agencies' consideration and implementation of shared services.

The MGT Act does not appropriate new money but authorizes working capital funds at the 24 agencies governed by the Chief Financial Officers Act to drive IT modernization and bank the savings achieved from retiring expensive legacy IT and shifting to managed services. It also authorizes a governmentwide revolving fund to be run by the General Services Administration.

Margie Graves, deputy CIO at OMB, said those funding mechanisms are crucial to pushing more efficient and effective IT and services across federal agencies.

The adoption of shared services is growing quickly, said Beth Angerman, executive director of GSA's Unified Shared Services Management group. The organization is only a year old, but she said 35 agencies are now moving toward shared-services programs.

"We've been successful beyond our dreams," Mader said. "We've got more demand than supply" for shared services.

That demand is spilling over from federal providers, such as the Treasury Department, to commercial providers, he added. And he said the next administration should take an early look at how to expand supply for federal agencies.

In August, GSA and OMB released guidance that agencies can use to develop shared services called the Modernization and Migration Management (M3) Framework. It will provide even more impetus for agencies' adoption of shared services.

Lesley Field, acting administrator of OMB's Office of Federal Procurement Policy, said GSA's category management effort will also help sustain growth because it provides common solutions, data and other information. GSA will issue a document through the Federal Register this week "that solidifies category management as the way we buy," she added. 

Field stepped into the acting position on Oct. 3 after Anne Rung left for the private sector. Field told FCW that she intends to maintain the sharp focus on category management that Rung began.

Mader, Graves and Field said business-oriented, data-backed efforts such as category management and M3 will ensure that the shared-services effort will continue no matter who is elected president this fall.

However, some of the fuel for that momentum will be provided by the Digital Accountability and Transparency Act of 2014, they added. It seeks to make the $3.7 trillion dollars in annual federal spending more transparent by standardizing how financial information is reported and shared on USAspending.gov. Graves said the law will push agencies to identify areas for cost savings and where those areas might overlap with a provider's shared service.

The fate of the MGT Act is unclear, and it remains to be seen whether the Senate will introduce its own version. Adding to the uncertainty is the cramped legislative calendar of the lame-duck session before a new administration takes office.

"Time is the biggest thing," Mader said, adding that he hopes the legislation will make it through and be in place for the next administration to use.

Graves said U.S. CIO Tony Scott is preparing for the measure to become law and is drafting a memo that instructs agencies to look forward in their IT modernization plans to technology trends, the state of their IT systems’ life cycles and "where they are with modernization." The memo is meant to get agencies prepared to use the modernization funds as soon as possible.

Mader, Field and Graves were optimistic that senators would give the bill the same favorable bipartisan support that their colleagues in the House did.

"Sometimes it is easy to be cynical" about political obstacles, Mader said. However, the House picked up the bill and passed it unanimously. "I feel good that there is recognition in Congress that we need this kind of thing. I'm excited to get the bill signed before [the next administration takes office]. That would be a major, major win for everyone."