President Bush’s 2005 proposal would amount to 1 percent bump

The startlingly small 1 percent increase for IT funding outlined in President Bush’s fiscal 2005 budget proposal illustrates that agencies are heeding the administration’s call to closely mesh systems and mission requirements.The $59.7 billion IT budget, which Bush sent to Congress last week as a part of his $2.4 trillion spending plan, reflects improved IT management by agencies and an understanding of what the administration expects, said Mark Forman, the government’s former IT chief.“Very clearly, OMB had the data to make decent management decisions,” said Forman, who in August left his post as administrator for e-government and IT at the Office of Management and Budget. “I think a lot of the cuts happened before the budget got to OMB. This was a much more disciplined and results-focused budget cycle than we have ever seen.”The administration’s IT request of $59.7 billion was $600 million more than the president requested for this year. It is the smallest increase since 1994, when IT spending dropped by $1 billion, said Payton Smith, manager of federal market analysis for Input of Reston, Va.The increase is less than the 1.3 percent the administration expects inflation to rise by next year. It is in line with the 0.75 percent increase in discretionary spending for all civilian agencies except the Homeland Security Department. OMB director Joshua Bolten said only Defense Department and DHS spending are expected to grow by more than 0.75 percent.The White House’s decision to rein in IT spending surprised many government analysts and industry watchers.Smith noted that annually since 1988 the IT budget has increased 7 percent on average.Ultimately, Input expects spending next year on IT will be larger than the request. “When you look back at the trends over the last eight years, actual spending exceeds the request by a considerable amount,” Smith said.Even so, 16 of 30 agencies would receive at least a little more IT funding next year than they are slated to spend this year. The Air Force, for instance, would get $755 million more, and the Health and Human Services Department an additional $216 million.Agencies also are trimming the number of IT projects in many cases. At the Agriculture Department, which is slated to receive $162 million less next year, for instance, “the appearance of a smaller number of IT projects is directly related to our enterprise efforts,” CIO Scott Charbo said. “We’re going to reduce the number of projects so that we can manage better. We’re essentially doing more with less.”Ray Bjorklund, senior vice president of Federal Sources Inc. of McLean, Va., said the tight IT budgets could reflect federal efforts to consolidate more projects.Input’s Smith attributed the slight growth to changes in the federal IT environment. “We are moving out of what has been a crisis era of IT spending with the year 2000 rollover and then Sept. 11,” he said. “At the same time, the Federal Enterprise Architecture is taking hold and impacting how agencies spend money on IT.”Charbo also pointed to the federal architecture. “I see that across other agencies in talking with other CIOs,” he said. “That’s what OMB has been pushing us toward. We’re aligning with the architecture.”Forman noted too that a lot of the rise in spending over the last few years can be attributed to Defense and Homeland Security investments and e-government efforts to change the way agencies do business.“The government is leveling off on modernization funding, and the demand is for more Homeland Security funding,” he said.“This also is probably the first year where there is decent integration between IT spending on the results of OMB’s Performance Assessment Results Tool analyses,” which look at how well performance ranks against investments, said Forman, now executive vice president at Cassatt Corp. of Menlo Park, Calif.OMB scored 20 percent of the programs for the second straight year on how they demonstrated results. From that analysis, budget officials recommended curtailing or ending more than 120 programs worth about $1 billion, Bolten said. No specific IT programs were a part of the examination, but technology played a role in many of them.Forman said agencies can take credit for controlling spending, and he specifically identified improvement in the Exhibit 300 business cases agencies submit to justify spending plans.“If you look at the number of business cases approved in the first round of OMB’s budget evaluation as compared to two years ago, it wouldn’t be close,” he said. “Now this is common practice because agencies understand the importance of them.”Agencies still have problems with their IT business cases. The budget report said that OMB had included 621 business cases, worth $22 billion in systems investments, on the administration’s management watch list. The chief problems? Lack of strong performance measures, inadequate IT security and failure to apply portfolio management criteria.Even so, “the changes OMB put in place seem to be taking hold,” Smith said. “It is not just the fact that agencies are more careful in how they spend their money, but OMB is tracking what is being spent and has a much better handle on it.”OMB was expected to hold a briefing on the IT budget at press time; visit for the latest breaking budget news.