House bill funds OPM's IT modernization

A House appropriations bill is offering $37 million to fund a troubled Office of Personnel Management IT modernization project that has been in the crosshairs of the agency's inspector general.

A corresponding appropriations bill in the Senate would provide $21 million in fiscal 2017 for IT "infrastructure modernization" at OPM, a likely reference to the IT project known as the Shell.

Lawmakers recognize the importance of the IT infrastructure overhaul, but also the pitfalls the project has run into in the past. The funding proposals therefore came with warnings.

"Significant concerns remain relating to OPM's capital planning practices, the agency's procurement and management of contracts, and continued uncertainty surrounding the total cost of the modernization project," states the bill report accompanying the Senate's Financial Services and General Government Appropriations Act for fiscal 2017.

The Shell project involves building infrastructure to house applications migrated from OPM's mainframe computers. The overhaul took on added urgency after a breach of OPM systems, disclosed in June 2015, which compromised at least 22 million federal records.

The IG has long criticized OPM officials for failing to map out the cost and scope of the project, and a clear, public estimate of the cost has been elusive.

OPM has put the cost of some of the work at $93 million. That estimate, however, does not include the priciest phase of the project: the migration of systems to the Shell environment, according to former OPM IG Patrick McFarland.

The Shell's problems got worse in May when prime contractor Imperatis abruptly quit the project, citing financial distress. OPM spokesman Sam Schumach has said the company's departure would have little impact on the project.

The House bill would make $37 million available for the Shell through fiscal 2018, but not until the OPM director submits a plan for how the money will be spent. That plan should identify the full scope of the Shell project, meet Office of Management and Budget capital planning requirements, and come with the input of the IG, the bill states.

OPM officials have in the past counted on significant injections of funding from Congress for the Shell project that have been anything but guaranteed. One internal document obtained by FCW banked on $123.5 million in new appropriations from fiscals 2017 to 2019.

The $37 million is what OPM requested for fiscal 2017. Another request for that amount was denied in last year's Cybersecurity Information Sharing Act, leaving agency officials to go back to the drawing board for funding solutions.

Schumach has said the latest request differed from prior requests in its tighter focus on modernization.

In an email to staff after President Obama signed CISA into law, then-OPM CIO Donna Seymour told colleagues that "we [OCIO] need to be very clear about the impacts of not receiving the $37M" they had hoped for and expected.