OMB asks agencies to identify e-gov costs, savings

The Office of Management and Budget is asking agencies to begin documenting by Sept. 30 the savings associated with their participation in information technology-related projects such as the administration's e-government and lines of business initiatives.

In an Aug. 8 memorandum to agency chief information officers, Karen Evans, administrator of OMB's Office of E-Government and Information Technology, said the government is improving service to citizens and efficiency through the e-government projects. It is now necessary to identify the associated cost savings governmentwide, she wrote.

Congressional appropriators have cited agencies' inability to document savings as one of the reasons they have established funding roadblocks for e-government projects in agencies' annual spending bills.

Several fiscal 2007 appropriations bills contain language that sharply reduces e-government funding, eliminates it altogether or requires agencies to submit a reprogramming request with a cost-benefit analysis.

The OMB memo is not a direct response to appropriators' demands, but it does ask agencies to identify IT systems that are being modified or replaced because of an e-government or line of business initiative, and develop a baseline cost estimate for each investment by Sept. 30. Agencies then must begin measuring the actual cost of these investments on a regular basis, the memo states.

For instance, OMB is asking what travel or payroll systems are being replaced as agencies migrate to an eTravel service or an ePayroll system, and is seeking information on the associated costs and savings.

Additional cost savings information will be requested in November as part of OMB's annual e-government report to Congress, the memo states. The administration anticipates asking for updates on a semi-annual basis.

The memo tells agencies that to measure cost savings, they should refer to the methodologies provided in an attachment to OMB Circular A-76, the rule book covering efforts to allow contractors to bid on federal jobs considered commercial in nature. Strict adherence to those methods is not required, the memo states.

The cost of an agency IT system, both for the government and for a contractor, must be measured in personnel, supplies and other costs such as facilities, utilities, training and maintenance, the memo states.

For agencies that have yet to migrate to a governmentwide system, OMB is asking for baseline estimates of each system to be replaced so that cost savings can be measured as the agency shifts to shared IT services.

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