Why All the Fuss About Capital Assets?


Spurred by the National Performance Review, the Office of Management and Budget began taking a closer look at capital assets in 1994, with a bulletin (94-08) designed to help agencies improve the way they buy big items. The budget office recognized that pressure to downsize and restructure was tempting agencies to put off buying and neglect maintenance of fixed assets even though some assets, such as information technology (IT), could help agencies do more with fewer resources. OMB asked agencies to prepare and justify five-year spending plans for asset purchases and to explain the methods they use to fund big-ticket buys.

In a subsequent governmentwide review, OMB found "research equipment was acquired with inadequate funding for its operation. New medical facilities were built without funds for maintenance and operation. New information technology sometimes was acquired without planning for associated changes in agency operation," according to the Analytical Perspectives section of the Clinton administration's 1998 budget request.

In 1995, OMB issued a bulletin (95-03) requiring agencies to report on the progress of asset acquisitions larger than $20 million. The budget office wanted the acquisition progress data to comply with the 1994 Federal Acquisition Streamlining Act requirement that it report on how well agencies were meeting their own acquisition cost, schedule and performance goals.

Last June, OMB replaced its previous bulletins with a rewrite of Part 3 of Circular A-11 directing agencies how to make their annual budget submissions. Part 3 adds to the five-year planning and up-front budgeting mandates a requirement for richly detailed fixed asset reviews designed to streamline reporting required by FASA, the 1993 Government Performance and Results Act, and the 1996 Clinger-Cohen Act, which reformed IT management. Part 3 charges agency heads with:

  • Setting cost, schedule and performance goals for major acquisitions,
  • Monitoring programs to ensure they achieve 90 percent of cost and schedule goals and 100 percent of performance goals, and
  • Taking corrective action, including termination, when programs fail to meet those goals.

Clinton's 1998 budget request, which seeks $60 billion in capital asset outlays, includes a section, "Principles of Budgeting for Capital Asset Acquisitions," stressing the need to improve planning, cost-benefit analysis, financing and risk management for capital assets. The "Capital Programming Guide," produced by inter-agency working groups of more than 80 employees from 14 agencies and due this month, will offer practical advice on enacting the principles.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.