Kundra's savings plan takes shape

The Obama administration inherited $71 billion worth of annual information technology spending from the previous administration, and Vivek Kundra, the government’s new chief information officer, says he plans to maximize the value of that investment and hold agencies more accountable for how they spend the money.

“How do we rationalize those investments and ensure that those investments actually produce the dividends we’re looking for?” Kundra said in a recent speech. Those dividends include finishing projects on time and within budget, he added.

If the investments don’t produce results, he said, “then we’re willing to make the tough choices around either stopping those projects or moving capital to where it’s most effective.”

Kundra has spoken on the topic at Senate panels, industry group meetings and other venues.

It’s no secret that the government needs to improve management of its IT investments. Delays, duplicate systems and massive project cost overruns have fueled a steady chorus of calls to trim the federal IT fat.

To begin trimming, Kundra wants to improve the government’s ability to monitor IT investments and define requirements for IT systems. He recently told a Senate subcommittee that the government will be frequently checking agencies' investments.

“Doing it on an annual basis is not going to be good enough, because by the time you find out, the requirements have increased or the budget is out of control,” said Kundra, who is also the administrator of the Office of Management and Budget’s Office of E-Government and Information Technology.

He said agencies should do a better job of clearly defining what they want upfront so a contract’s costs could be set from the beginning.

“There are cases where you need cost-plus contracts, but if we know what the requirements are upfront, we should be able to award fixed-price contracts,” Kundra said. For some of the investments that go south, “one of the reasons is you end up with 400-plus change orders.”

In addition, Kundra said it’s important to hold government officials and industry responsible for poor performance. Contractors that charge the government without providing value won’t get further business, he said. The government will need to see the value that companies bring. “We can’t afford faceless accountability,” he said.

Industry isn’t afraid of oversight, said Phil Bond, president of trade association TechAmerica. He said his members, who include many leading federal IT contractors, welcome the scrutiny. However, he said his members emphasize the need for the government to be a good customer by telling them exactly what they want instead of issuing numerous contract modifications.

Kundra is not the first to take aim at the ever-expanding federal IT budgets. The Bush administration tried to improve management and transparency of IT systems. Karen Evans, Kundra’s predecessor, worked for years to put in place programs and watch lists to improve IT oversight.

David Powner, director of IT and management issues at the Government Accountability Office, said the big challenge for the new administration is getting hold of the $71 billion and putting in place the right governance to avoid the major problems the government has had with cost, schedule and delivery for IT projects

“We can go right down the list: Requirements definition is poor; we don’t manage risk well; we don’t oversee contractors well,” Powner said. However, he added, GAO knows where many of the trouble spots are, and can make the needed improvements as time rolls by.