Bush proposes belt tightening

For the second year running, the Bush administration is asking for only a minimal increase in

information technology spending. That slight increase, combined with the demand for resources in

defense and homeland security, will turn into a loss or, at best, no gain for many

programs.

The $59.8 billion IT request for fiscal 2005 represents a 1 percent increase over last year's request, which was only a 2 percent jump from the year before. Gone are the heydays of fiscal 2002, when Bush sought a double-digit increase. The election year budget request reflects the administration's priorities of tightening the reins on spending while focusing on the fight against terrorism.

Although many analysts expected a higher number for IT spending, Office of Management and Budget officials seem to be driving home the message that agencies must justify spending and pursue areas of collaboration.

"This suggests OMB has tightened the reins on IT spending and has a much better idea of what agencies are spending and when they will be spending," said Payton Smith, manager of federal market analysis for research firm Input.

Smith said the actual spending has exceeded the request by about 13 percent in the past eight years — a trend that seemed to change in fiscal 2004 when the estimated spending was actually less than the request. This means that for the second year, OMB officials are tightening controls, he said.

However, Input and Federal Sources Inc. officials expected Bush to ask for $2 billion or $3 billion more for IT, and Ray Bjorklund, Federal Sources vice president of market intelligence and chief knowledge officer, called the plan disappointing.

"We heard it was going to be less, but we didn't expect it to be this much less," Bjorklund said.

The message from OMB seems to be one of strong project management demonstrated by agencies' business cases and capital planning processes, Bjorklund said. Some programs have been consolidated, while those that were unable to show results have been cut or scaled back, he said.

"There is some rationalization, some consolidation on programs," Bjorklund said. "That has been the message coming out of OMB for a couple years."

Jim Kane, president and CEO of the Software Productivity Consortium, said

the budget also signals the administration's need to see some results

from previous spending. "I think it says, 'Hey, we have put a lot of money into IT, and we should start to see a return on investment,'" he said. "We shouldn't have to keep spending so much on IT."

Similarly, Carl DeMaio, president of the Performance Institute, a Washington, D.C., think tank, said the administration should be credited for the focus on accountability. He said it was a fair budget, and the administration shouldn't throw more money at projects that are not well planned and results driven.

"I don't think it's a problem," he said of the nearly flat spending request. "We don't seem to be getting a whole

lot for that money. Until we have better performance cases, people should be very wary of increasing the technology budget."