New year rings in with IT austerity

Federal information technology executives this month turned into penny-pinchers as Congress continued to put the squeeze on IT funds, even for high-profile agencies such as the new Homeland Security Department.

House appropriators agreed last week to transfer $125 million in start-up money for the department, with every penny coming from the agencies folded into it.

In a sign of austerity across government, House Appropriations Committee Chairman C.W. "Bill" Young (R-Fla.) put his stamp of approval on the spending plan, but he simultaneously asked the Office of Management and Budget to spell out how the money would be spent. The Senate still must approve the spending level.

"We need to give the new department the resources it needs to be effective, but Congress and my committee have a constitutional responsibility to make sure the taxpayers' dollars are well spent," Young said in a letter dated Jan. 7.

Steve Cooper, the new department's chief information officer (see box), will have nearly $13 million in start-up money for technology.

Nevertheless, it will be no easy task to combine 22 agencies into one streamlined department, said Lee Holcomb, the Office of Homeland Security's infostructure director. "Since the passage of the law [creating the new department], we have significantly augmented the integration team, but truth be told, that team is still mostly part-time and is not nearly as robust as we anticipated," Holcomb said.

In the meantime, the House Appropriations Committee wants more details about how the new department plans to develop its enterprise architecture and ensure that IT operates seamlessly among the agencies that make up the department.

As the Homeland Security Department crunches numbers, money problems plague many agencies, just weeks before the Bush administration officially releases its fiscal 2004 budget proposal. IT experts warn that this may be a tough year for vendors.

"As you push for more rational spending, you are going to have potentially more consolidation of contracts," said Ray Bjorklund, vice president of Federal Sources Inc.

Agencies expect an even bigger budget squeeze in coming years. The Department of Veterans Affairs is planning to slow the growth of the agency's $1.4 billion IT budget in fiscal 2004 as part of the executive branch's mandate to spend IT dollars more wisely. "We are planning on dramatically cutting the growth of increase for the IT budget in [fiscal] '04, '05 and '06," said VA CIO John Gauss. "There will still be growth, but I'm slowing the rate of growth."

Gauss said he expected to achieve major savings by using voice over IP for major facilities on the data network as well as regionalizing computer processing, such as office automation. He also plans to regionalize parts of the IT operations at the Veterans Benefits Administration and the Veterans Health Administration.

Although NASA spends $1.5 billion annually on computer systems, it has placed a moratorium on IT expenditures that are not considered mission-critical. The CIOs of the space agency's centers are evaluating any investments that don't impact the agency's ability to do its job, said Brian Dunbar, a NASA spokesman.

IT managers at the Department of Health and Human Services also are planning for smaller IT budgets. "We will definitely have to do more with less, but our IT modernization and consolidation projects make it possible for us to take savings in those areas and ensure the continued support of critical business applications," HHS CIO Melissa Chapman said.