OMB puts $2B in IT spending on the chopping block

Underperforming IT programs get the axe in 2012, Kundra says

Eight federal agencies and departments would see more than 10 percent cut from their IT budgets under a management reform program for fiscal 2012, a senior White House official said today. Other federal organizations would have smaller reductions.

“We are cutting what we cannot afford and deploying game-changing technologies,” Vivek Kundra, federal CIO, said in a press call with reporters.

The largest proposed IT funding reduction, by percentage, would affect the Office of Personnel Management, down 33 percent, primarily through reductions to a financial system expenditure that would save $23 million, Kundra said.

NASA would lose $512 million, or 24 percent, on infrastructure; the Education Department would be cut by $174 million, or 21 percent; and the Commerce Department would be down $466 million, or 16 percent.

Other organizations that would experience a drop in IT budgets of more than 10 percent are the U.S. Agency for International Development, down 18 percent; National Archives and Records Administration, down 17 percent; Small Business Administration, down 15 percent; and Housing and Urban Development, down 11 percent. Details were not immediately available on which IT programs would be cut at each agency.


Related stories:

Obama looks to boost IT spending in 2012

GOP ups the ante: $100 billion in spending cuts this fiscal year


Overall, the White House is requesting a $1.5 billion increase for federal IT, to $79.5 billion, compared with fiscal 2010's enacted level.

However, while 10 federal agencies would see IT budget hikes totaling $3.5 billion, 17 agencies would see cutbacks totaling $2 billion, under the plan Kundra presented.  Eight of the 17 agencies would be trimmed more than 10 percent. The net result is a $1.5 billion increase.

Kundra outlined a series of IT management reform measures, including terminating a third of underperforming IT projects and subjecting troubled programs to a 25-point reform plan and the ongoing TechStat review process. Furthermore, he said 800 federal data centers would be eliminated by 2015 and $20 billion worth of IT spending would be shifted to cloud computing.

In addition, the administration will continue to spend on cybersecurity, especially in continuous monitoring tools and “Red Team” approaches, and will foster an “apps economy” for open-source technologies as well as challenges and prizes to spur innovation, Kundra said. The cybersecurity spending would include $2 billion at Defense, $459 million at the Homeland Security Department and $97 million at Commerce, he said.

Kundra pointed to several federal agencies with high infrastructure costs, including the Army Corps of Engineers, 80 percent; the Veterans Affairs Department and HUD, 62 percent each; and Social Security Administration, 59 percent. They are spending well above the ideal level of around 20 percent on infrastructure, Kundra said, and cloud computing and data center consolidation will help fix that problem.

In the coming years, Kundra said, the administration hopes to leverage three major technology trends:

  • A move away from personal computers. “The PC is not the central technology any more for access to or delivery of government services,” Kundra said.
  • A growing gap between public and private sector technology capabilities, with government agencies showing less capability. A possible solution in the coming years is to provide federal employees with a subsidy to buy their own laptop computers and smart phones, he said.
  • An “Apps economy” replacing the purchase of large systems. The government will use challenges and prizes to stimulate innovation to develop IT solutions, Kundra said.


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