Federal tech spending gets more scrutiny

The comprehensive spending bill for the federal government in fiscal 2008 indicates that Congress is exercising more oversight and demanding more transparency of information technology contracts, an industry group leader said Friday.

"It's too early to tell how good [the package] is for IT procurement," said Alan Chvotkin of the Professional Services Council, a trade association representing contractors, but "more and more of the legislation, including this omnibus, has the theme of oversight."

One provision would terminate a fund that let the Homeland Security Department share contracts for goods and services with other agencies. Such interagency cooperation, known as a franchise fund, cuts the time that agencies spend awarding and administering contracts, but Chvotkin said the concern is that the business-like operations give agencies too much freedom to buy services off each other without much accountability.

The bill also would impose new reporting requirements on so-called centers of excellence, which are operations within one agency that handle back-office functions -- like financial management and human resources -- for several agencies. The consolidation of IT systems has been encouraged by the White House Office of Management and Budget to save money.

The legislation would require agencies to submit the funding amounts contributed to each center initiative, "the relevance" of the initiatives and descriptions -- including cost-effectiveness, estimated date of full operational capability, risks and status.

"Congress is always worried" about the consolidation of agency contracting "because it moves the budget money out of Congress' hands and out of their control," said Chvotkin, a former congressional staffer who is currently the council's senior vice president and counsel. Now lawmakers will be able to see, for instance, how much money the Housing and Urban Development Department is sending to the Agriculture Department to manage HUD's payroll.

The research firm FedSources estimates overall weak growth in federal IT spending from 2007 to 2008, with an increase of only 3.1 percent.

The top three IT investment areas will be infrastructure maintenance, information management -- largely "information sharing" -- and defense systems.

"Public-sector IT spending, especially at the federal level, will come under increasing scrutiny by Congress and the inspectors general," said Ray Bjorklund, FedSources senior vice president and chief knowledge officer.

He said Congress is raising more questions about the execution of large programs, such as the Army's Future Combat Systems and Internal Revenue Service modernization.

"Accordingly, Congress is asking for details of the program plans and a more rigorous OMB review of program budgets before they will appropriate amounts closer to the full budget requests for such programs," Bjorklund said.

These restrictions will "create more uncertainty and apprehension" within government about spending money on IT contracts, he added. Plus, the Defense Department's IT budget, which represents about half of the federal IT budget, is at risk because the Iraq war's huge operational costs sometimes requires that tech money be spent elsewhere.

But Paul Proctor, a vice president with Gartner Research's security and risk group, said "federal agencies continue to spend cyber-security dollars on improving security programs and remediation of control gaps" as part of the Federal Information Security Management Act, which established standards for cyber security at government agencies.

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