Explosive changes loom as Independence Day nears

For many federal agencies, Independence Day this year comes on Aug. 8 - the day the Information Technology Management Reform Act (ITMRA) goes into effect, bringing with it significant reforms in government procurement and management. In this new world, the government has been stripped of its centralized, top-down management of IT programs, and individual agencies will have more autonomy to make IT decisions.

ITMRA does away with the General Services Administration's role as a watchdog for government IT projects, a job it has performed for more than 30 years. In its place, agencies will have a free hand to carry out their programs as long as they can demonstrate favorable results for Congress and the administration.

Those familiar with ITMRA cannot agree on whether the law will make government purchases and management of IT work better or worse, but everyone agrees about one thing: The change is significant.

John Koskinen, deputy director of management at the Office of Management and Budget, said, "Clearly this is one of the most significant management changes because IT goes to the heart of what agencies are doing."

"ITMRA is even bigger than the passage of the Brooks Act 30 years ago because IT is now such a big portion of the federal government's budget," said Bill Shook, a lawyer with Preston, Gates, Ellis & Rouvelas Meeds, which represents IT corporations, including Microsoft Corp.

By repealing the Brooks Act, ITMRA abolishes GSA's power to issue delegations of procurement authority and limits protest reviews to the General Accounting Office. The law also establishes a top-management-level IT czar in each agency, called the chief information officer, and shifts oversight of IT projects to OMB. Before Aug. 8, the administration is expected to issue its executive order laying out interagency coordination in program oversight, according to OMB.

Even before ITMRA takes effect, however, agencies are anticipating the changes. Some agencies are delaying awards to avoid the possibilities of lengthy protests. The National Institutes of Health, for example, has delayed at least two contract awards until after Aug. 8. Others are waiting to announce new acquisitions until they no longer need a delegation of procurement authority, GSA's blessing to pursue a project of a certain dollar value.

GAO, which will be the only protest forum under the new rules, already has a head start in responding to ITMRA. The new law requires the government to handle contract protests in 100 days, down from 125. "We are ready to do that," said Ronald Berger, associate general counsel at GAO. "We didn't wait for Aug. 8 to come along to implement that; we did it in February."

In part, GAO has trimmed response time by identifying cases that can be handled with accelerated procedures, such as the early submission of vendor documents, Berger said. GAO also attempts to work with protesters early on to remove counts that likely will not stand and encourages vendors to settle protests without going through the whole process, Berger said.

One-Stop Shopping

The forthcoming procurement changes are designed to make agencies more responsible for their IT projects.

"This will push the government into acting more like the private sector," said Steve LeCompte, vice president of IDC Government Market Services. "There are a lot of parallels with downsizing of industry and removal of layers of management."

Manny De Vera, director of NIH's Computer Acquisition Center and an early adopter of ITMRA guidelines, believes that government will begin to work more closely with industry to develop better IT solutions.

"ITMRA places the onus on agencies to make the business case for IT proj-ects," he said, "so the contracting officer is going to become more of a service-oriented person, working more closely with program managers and industry to make those things happen."

ITMRA is the final piece in Congress' long procurement reform effort, including the Government Results and Performance Act, the Federal Acquisition Reform Act, the Federal Acquisition Streamlining Act and others.

"The goal here is to pull all the separate initiatives together to give agencies a single planning tool through capital asset management, budgeting and performance measurements so we have one-stop shopping," Koskinen said.

That makes ITMRA the last piece of the procurement reform puzzle. "The accountability squarely lies with the agency now," said David McClure, assistant director for strategic information management at GAO.

Perhaps the biggest difference now will be that if a program fails, "instead of the DPAs being taken away, budget cuts will happen," McClure added.

That impact, however, will not be fully realized for a while yet, particularly in oversight, which will be shifted from GSA to OMB, said Steven Kelman, administrator of the Office of Federal Procurement Policy. GSA oversight "was heavily based on process," he said, while OMB oversight will be based on the budget cycle, which is far more results-oriented.

Unintended Consequences

But others question whether ITMRA will bring about unintended consequences.

One procurement expert said decentralizing procurement runs the risk of creating fiefdoms in every agency. And without a centralized, informed oversight staff, ITMRA "will turn into a windfall for the IT industry because they will be able to take advantage of agencies, which means higher prices and wasted equipment."

In addition, oversight will be weakened because many observers question whether OMB's Office of Information and Regulatory Affairs has the manpower to oversee $27 billion worth of IT spending every year.

ITMRA could create "a horrific mess," a procurement expert said. "You can argue that OMB and OFPP could do a better job than GSA, but I don't see them creating a bureaucracy that can properly handle it."

But OMB officials said OIRA will receive help from about 200 staff members in its budget office and interagency groups formed to follow IT governmentwide.

Also, Koskinen said reduced oversight is exactly the point of ITMRA, which squarely puts accountability of IT programs with agencies.

"We don't see OMB's role as accumulating a lot of technological expertise," he said. "We view agencies as having the ability to...answer straight-forward questions.... The change now is that we will directly give - and we have guides for analysts to what things they should look for - clear articulation of measurable outcomes. We'll hold them accountable every year to meet those."

Proponents see ITMRA as not the final solution to IT procurement reform but as more of "an experiment."

That means Congress and OMB must be patient as agencies explore the new limits of the law, one agency contracting executive said. "There are going to be agencies that are doing things that people don't understand," the executive added.

At the same time, OMB and other agencies stressed that the administration and Congress have the option of ending the experiment, should agencies exercise their freedom poorly. "If agencies misuse that discretion, Congress could take it away from them," said Bruce McConnell, head of OMB's IT policy branch. "We will all be watching to see if this works or not."