Are we missing the forest with IT modernization?

Alan Balutis, a senior director and distinguished fellow for Cisco Systems U.S. Public Sector, makes the case for why agencies should take some year-end spendin...

The federal IT community is astir with the news that the Technology Modernization Fund (TMF) might not get new money in fiscal 2019. In early June, House appropriators approved a spending bill that would provide $150 million in 2019. But funding is not included in the Senate version of the spending bill. Should we be worried?  No, not about this.  We are being distracted from a more important issue.  Let me explain.

On the matter of the disconnect between the House and the Senate on 2019 funding: We have seen this movie before. Sens. Jerry Moran (R-Kan.) and Tom Udall (D-N.M.) were instrumental in getting these matters fixed in conference before, and I have every faith they will do so again.

The federal government spends $100-plus billion each year on information technology and the Modernizing Government Technology (MGT) Act fund doesn’t even constitute rounding error in the government’s IT funding. The MGT Act also authorized departments to set up new working capital funds (WCFs) to save money to put toward IT modernization efforts. That would allow them to carry-over monies – with the expectation of better, smarter IT investments – instead of the use-it-or-lose-it, 4th quarter spending sprees that we witness today. That is really where agencies and CIO’s should be focusing their attention. That is they could transform the usual end-of-year (EoY) spending spree into a long-term IT modernization opportunity. Let me tell you how and why.

When the sixth version of the Federal IT Acquisition Reform Act (FITARA) scorecard was released in late May, only three agencies indicated they plan to set up new WCFs to save money to put toward IT modernization efforts–the Small Business Administration, the Department of Homeland Security and the Department of Labor. Of the other 21 agencies, 12 told the committee they weren’t planning to set up a new WCF – although nine of them said they planned to use existing WCFs for IT modernization savings.  But using pre-existing WCFs creates the prospect of those IT monies being used for other non-IT related purposes. Not a good option!

A June 20 report from Bloomberg Government reinforces what most of us already know: Federal spending booms at the end of the fiscal year. In 2017, the Department of Defense spent one-third of its annual obligations in the fourth quarter. Civilian agencies spent 35 percent in that same period. With the 2018 budget approved late this year and with major increases approved across government as part of the budget deal, 2018 appears primed for an even larger EoY spending spree. Bloomberg suggested that $30+ billion remained to spend on IT before September 30 – just over 60 days from now.

So why not take just a few days’ worth of that end-of-year sum, or maybe even just a little over a week’s worth, and stockpile $1 billion-to-$2 billion for IT modernization. Anyone who has worked in or around government knows that the EoY spending binge normally involves reaching down to unearth projects and initiatives that have either previously been rejected or that have lacked a sound business case. The President’s Management Agenda provides a roadmap and an investment guide for where we want to be as a 21st century citizen-centric government. These funds could help our government modernize its aging IT infrastructure, enhance security, accelerate the transition to the cloud, improve data and the tools to analyze it, and so on. And do so sooner.  If OMB wants to make a business case to the Hill on the benefits of the MGT Act, here is a terrific opportunity to do so.  Truly, a billion here, a billion there . . . IT modernization could really add up.

Alan P. Balutis is a senior director and distinguished fellow for Cisco Systems U.S. Public Sector . Balutis served 30 years in government, including as the first  CIO of the Commerce Department.

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