E-gov spending expected to rise, despite congressional dissatisfaction

Agency spending on e-government projects is expected to grow 6.9 percent annually to $5.8 billion by fiscal 2009, according to a report from an information technology consulting firm.

Spending on e-government projects reached $4.2 billion in fiscal 2004, but congressional dissatisfaction with the projects' development kept appropriations for the e-government fund to a minimum, the report stated.

"They haven't proven what they need to prove to Congress: That e-gov is a sound investment," said Chris Campbell, author of the report and a senior analyst at Reston, Va.-based INPUT. "That has been reflected in the budget. Each year they ask for more money, but Congress has been complacent."

The report's claim that spending on e-government initiatives will rise is based on the premise that more funds will go towards e-government once agencies start demonstrating they are saving money by consolidating redundant back-office systems, such as payroll and procurement operations.

Cost savings from eliminating unneeded systems will be invested in "new mission-oriented" projects, the report predicts.

The report defines e-government spending as money going toward any information system that performs a mission-oriented function in one of four customer segments defined by the Office of Management and Budget.

Defense Department agencies are expected to spend $152 million in fiscal 2009 on e-gov efforts, up from $115 million in fiscal 2004. Civilian agencies are supposed to spend $114 in fiscal 2009, up from $86 million in fiscal 2004.

The report predicts that the greatest growth in e-government will occur in the government-to-business segment, where funding is expected to rise from $15 million to nearly $52 million in fiscal 2005. Of the other three customer segments, funding on the internal efficiency and effectiveness segment is expected to remain the largest at $95 million, but about 55 percent of those funds will go toward existing programs. Funding for government-to-citizen and government-to-government projects is expected to decline from last year.

OMB's e-authentication program has been a barrier to the implementation of the e-government strategy, according to the report. Since the beginning of fiscal 2004, OMB has increased oversight of e-government projects and has held back funding from agencies that do not meet information technology standards.

The increased OMB supervision included a new set of goals that agencies have to consider in e-government projects. According to the report, OMB has "peppered agencies with numerous memorandums reminding them of specific program targets and the mandates holding them to these requirements."

The report stated that with the passage of the 2004 National Intelligence Reform Act last month, a greater emphasis will be placed on implementing e-government within the intelligence community, focusing on government-to-government and internal efficiency and effectiveness initiatives.

INPUT estimates that the intelligence agencies spent about $13 million for e-government in fiscal 2004, and expects that number to rise to $17 million in 2009.