OMB demands agencies trim IT for 2014

As expected, the Obama administration is demanding slimmer agency IT budgets for fiscal 2014, and asking for details on how officials intend to reinvest the savings they can eke out.

The Office of Management and Budget wants agencies to propose reductions in IT spending that equal 10 percent of their overall spending from fiscal 2013. It also wants proposals for OMB’s consideration on how to reinvest at least 5 percent and as much as 10 percent of these savings in priority IT investments, according to new Exhibit 53 guidance. 

Each agency reports its IT spending portfolio annually to OMB through an Exhibit 53, which provides budget estimates for all IT spending programs and identifies those that are major programs. Exhibit 300s are business case summaries required by OMB for all major IT programs.

In the new guidance, administration officials are hammering on the problem of poor spending habits.

“Too often spending on IT is still wasted on duplicative investments, missed opportunities to leverage economies of scale, rising operational costs that starve new development, and mismanaged projects that lead to cost overruns and schedule slippages,” the guidance states.

OMB offered some suggestions for where to look for cuts: commodity IT contracts, which often duplicate one another; underperforming projects; and investments that have a low priority or that are of lower value.

Similarly, for reinvestments, OMB suggests: improving to citizen services; adopting shared services; consolidating commodity IT, such as data centers; and improving the security of the agency’s information and IT assets.

If an agency does not propose to reinvest at least 5 percent, officials must provide a justification explaining as to why they are unable to propose these reinvestments, the guidance states.

Furthermore, in the administration’s effort to prove its spending is worthwhile, agency officials have a new form to fill out as they develop their fiscal 2014 budget submissions.This new exhibit, called Exhibit 53D, asks for similar information. It is where agencies will document the means they used to meet the 10-percent reduction in their IT budgets for the fiscal year and where they propose to reinvest some of these savings.

The new guidance on IT spending for next year builds on older OMB guidance released in May.

In that guidance, officials required agencies to use evidence in submitting their budget requests. “Evidence,” in this case, means using rigorous evaluations of programs’ performance as part of the budget-setting process. And evidence could bring an agency more money.

“Many potential strategies have little immediate cost, and the budget is more likely to fund requests that demonstrate a commitment to developing and using evidence. The budget also will allocate limited resources for initiatives to expand the use of evidence,” the memo reads.

Agency budget submissions also should include a separate section on agencies’ most innovative uses of evidence and evaluation, it adds.

The memo invites agencies to propose new evaluations, offering some specific suggestions:

• Low-cost evaluations using administrative data or new technology.
• Evaluations linked to waivers and performance partnerships.
• Expansion of evaluation efforts within existing programs.
• Systemic measurement of costs and cost per outcome.