Agency funding rules could challenge Obama's IT reform plan

When Federal CIO Vivek Kundra unveiled the White House IT management reform plan earlier this month, he said one of its toughest elements would be aligning the budget process with the technology cycle. Flexible IT budget models are needed, although some sources believe the plan could work even without them.

According to the reform plan, the Office of Management and Budget will work with Congress and federal agency leaders to develop IT budget models that align with modular development in the next six months.

Related coverage:

Government's new IT career path is critical, sources say

CIO's changing role to bring new power

Those flexible IT budget models would allow agencies to move funds around as needed to respond to unfolding requirements and changes in circumstances. Traditional budgeting requires agencies to make final decisions on IT solutions years in advance and offers few options for changing them later.

Tom Davis, former Republican congressman from Virginia, said he thinks the models are an important aspect of IT reform but might be challenging to implement because they would interfere with Congress’ authority.

“Congress likes their prerogatives in terms of where the money comes from and how it is spent,” he said. “Congress doesn’t easily give up its power.”

Davis, who used to serve as chairman of the House Oversight and Government Reform Committee and is now director of federal government affairs at Deloitte and Touche, added that he sees the new budget models as a “real transfer of authority from Congress to the executive branch.”

Other sources said the budget process is a touchy subject for lawmakers and noted that Congress rarely approves appropriations legislation in a timely fashion. Those issues could create roadblocks for IT budget reform, despite the Obama administration’s ambitious goals.

Nonetheless, Davis said he doesn’t think the 25-point reform effort will fall apart if funding isn’t aligned with the technology cycle.

However, Trey Hodgkins, vice president of national security and federal procurement policy at TechAmerica, said the budget models are a critical part of IT reform.

“It’s one of the legs of the stool here,” he said. “Buying and budgeting the way we do today is ineffective and costs more money.”

Hodgkins stressed that there are examples of federal agencies using flexible IT budget methods for lawmakers to consider. The Defense Department uses flexible budget accounts, and the reform plan the Veterans Affairs Department has suggested is another potential model.

Because of greater budget flexibility, VA's CIO is able to freeze IT projects that are off-track and either restructure them or cancel them, the plan states. VA also established an accountability system to identify projects that are missing milestones.

Still, Hodgkins said, all the other pieces of the plan are important and will lead to improvements in the government’s management of IT reform.

Specifically, the reform plan’s steps related to the budget process include analyzing working capital funds and transfer authorities to identify current IT budget flexibilities, identifying programs for which to test flexible budget models, developing supporting materials and guidance for flexible IT budget models, and working with Congress to expand flexible IT budget models more broadly.

The Office of Management and Budget will also work with Congress and federal agencies to consolidate commodity IT spending under agency CIOs to speed the adoption of strategic sourcing solutions. By consolidating commodity services — such as e-mail, data centers, content management systems and Web infrastructure — the government will be able to “more effectively negotiate for volume discounts and improved service levels,” the plan states.

Although it remains to be seen if Congress will agree to changes in the budget process, some lawmakers have expressed their support for the plan overall.