OMB gives agency CIOs more IT budget authority

A new memo from OMB Director Jacob Lew puts agency technology managers in charge of commodity IT purchasing. The White House had hoped to get Congress to change...

Agency chief information officers are now officially in charge of their departments’ commodity technology purchases.

And while only the Veterans Department CIO has the full power of the IT purse, the Office of Management and Budget is taking an initial step to give the rest of the government’s technology managers power over some technology spending.

“The CIO shall pool their agency’s purchasing power across their entire organization to drive down costs and improve service for commodity IT,” wrote OMB Director Jacob Lew in a memo to agency CIOs. “In addition, enterprise architects will support the CIO in the alignment of IT resources to consolidate duplicative investments and applications. CIOs must show a preference for using shared services as a provider or consumer instead of standing up separate independent services.”

Lew said commodity IT includes:

  • Data centers
  • Networks
  • Desktop computers
  • Email and collaboration tools
  • Identity and access management
  • Finance, human resources and other administrative functions

Many of these services are duplicative and cost agencies millions of dollars, he said.

The memo is another piece to the administration’s 25-point IT reform plan issued in December. The plan called for OMB to work with Congress during the first six months to develop a funding model for commodity IT services. But as Congress has been focused on the debt ceiling and other spending debates, the administration made little progress in changing how agencies fund these services. Out-going federal CIO Vivek Kundra told the House Appropriations subcommittee in March that changing the funding approach by adding flexibility would help solve some of the long-standing problems with managing agency IT.

Lew’s memo helps agencies move into that direction without legislative changes. Over the next six months, OMB is expected to issue guidance for agencies on how to implement the flexible funding model.

Along with oversight over commodity IT spending, the memo details other changes to the CIO’s role based on the 25-point plan.

“In the next year, the administration will ask agencies to report through the President’s Management Council and the Chief Information Officer Council on implementation of this memo to ensure that CIOs are positioned to achieve success and are delivering on their responsibilities,” wrote new federal CIO Steven VanRoekel in a blog post. “As the IT Reform plan continues to be implemented we will see more results from this fundamental shift in IT policy, permanently removing the barriers that have prevented consistent execution across the federal government for so long.”

OMB told agencies that CIOs now are in charge of all investment review boards for IT programs, and will run TechStat sessions to bring program managers and senior executives together.

“Outcomes from these sessions must be formalized and followed-up through completion, with the goal of terminating or turning around one-third of all underperforming IT Investments by June 2012,” Lew wrote.

Along those same lines, Lew said CIOs also must continue to play a large role in IT program oversight and to continue to identify, recruit and hire top IT program management talent.

“CIOs will also train and provide annual performance reviews for those leading major IT programs,” Lew wrote. “CIOs will also conduct formal performance evaluations of component CIOs (e.g. bureaus, sub-agencies, etc.). CIOs will be held accountable for the performance of IT program managers based on their governance process and the IT Dashboard.”

Finally, Lew detailed CIO oversight of cybersecurity. He said CIOs must implement an agencywide information security program.

“Part of this program will include well-designed, well-managed continuous monitoring and standardized risk-assessment processes, to be supported by ‘CyberStat’ sessions run by the Department of Homeland Security to examine implementation,” Lew wrote.

OMB will hold CIOs accountable for each of these areas with an eye toward lowering operational costs, terminating or turning around troubled projects and delivering meaningful functionality at a faster rate.

“These additional authorities will enable CIOs to reduce the number of wasteful duplicative systems, simplify services for the American people and deliver more effective IT to support their agency’s mission,” Lew said.


OMB plans 25-point IT reform

OMB pressing agencies to get IT projects on track

OMB turns up oversight heat with Cyberstat

OMB lays out plan to improve IT management

Kundra pitches more budget authority for CIOs

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