The Office of Personnel Management is beginning to deploy its new IT infrastructure system — the very project that the agency’s inspector general once described as “at high risk of project failure” — this year.

But the agency said it needs about $37 million to migrate some of its systems and begin planning to move other systems to the new IT environment, called “Shell,” in fiscal 2017.

“We’re thinking about going through the applications one by one and saying, ‘What does it take, what’s the most effective path from a security perspective to move this system, what’s the most effective and efficient way to do that from a financial perspective as well?'” Cobert said during a March 14 hearing before the House Appropriations Subcommittee on Financial Services and General Government.

In 2017, OPM will spend roughly $10 million to migrate some of the agency’s more modern systems, like USAJobs and USAStaffing, to the new Shell environment, Cobert said.

“There’s also funding, a few million dollars, that’s to do the planning on the more complex legacy systems, the older, more complex ones that are hard to move,” she said. “We want to do that planning in ’17, so that when we make the investments to modernize those systems we have a clear plan in place. We know what it will take.”

But the committee was slightly skeptical of the $37 million price tag OPM named for the Shell infrastructure project, mentioning the concerns former Inspector General Patrick McFarland publicly raised last summer.

At the time, McFarland said the agency didn’t have a major IT business case for Shell and suggested OPM develop one to ensure it has the budget and project management tools it needs to finish the project.

“Since last year in the middle of all the problems, the number was thrown out, maybe we need about $37 million to do all that, and coincidentally this year, $37 million is requested,” Subcommittee Chairman Ander Crenshaw (R-Fla.) said. “Then your inspector general raises the question, where does the number come from? We don’t want to just spend more money, like sometimes happens in government.”

The Senate Appropriations rejected an amendment during fiscal 2016 budget negotiations that would have given OPM $37 million to fast-track the Shell project.

Cobert said the $37 million price tag is the result of months of discussions within the agency, where she and her staff revised pieces of the Shell plan.

“We’ve worked this through, we completed the OMB-300 in the fall and reviewed that with the inspector general and frankly, expect to continue the ongoing dialogue we have with the inspector general and his full staff about how we’re using this money,” she said. “But we have a more refined plan.”

Part of the $37 million includes a $6 million fund for OPM systems to coordinate with Social Security Administration systems. Cobert said the goal is to reduce the number of improper payments for disability claims.

OPM also insists these resources are particularly important, considering the two major cyber breaches the agency suffered last summer. OPM’s archaic IT infrastructure, which didn’t support modern encryption technologies, opened the door for both hacks.

“We are operating in an environment that has a level of threat around cybersecurity that is just fundamentally different than what it was in the past, and we need to accept that that is the environment and we need to find a way to adapt,” Cobert said.

In the interim, Cobert said OPM put tighter cybersecurity tools on its legacy IT systems as it waits to fully launch the Shell environment. But she stressed: the agency needs to “fundamentally build in security by design” rather than put patches on old, outdated systems.

Cobert also said she actively is looking for a permanent replacement for Donna Seymour, who resigned as the agency’s chief information officer in February, to become the leading voice on OPM’s Shell project.

Dave Vargas, a member of the Office of the Chief Information Officer who was involved with the planning for Shell, is OPM’s acting CIO, Cobert said. She also brought on four experienced members of the Senior Executive Service and four senior leaders (SLs) to advise the CIO office.

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