More temporary spending freezes on the way

More Office of Management and Budget memos are on the way that will temporarily freeze information technology spending, according to a White House official.

OMB recently put holds on homeland security agency IT spending on infrastructure and financial and management systems. OMB and officials from the affected agencies are reviewing the spending with an eye toward eliminating redundant investments.

Speaking at an investors conference in New York July 31, OMB Chief Technology Officer Norman Lorentz said the next memos to be issued likely will involve e-government initiatives as well as homeland security.

The two memos issued so far affect the agencies to be consolidated in the proposed Homeland Security Department. A July 19 memo froze new spending over $500,000 on IT infrastructure. A July 30 memo froze new spending over $500,000 on financial and management systems.

"We have to spend our money smarter. We are at war," Lorentz said at the conference sponsored by RBC Capital Markets, New York.

OMB's July 30 memo also advised the homeland security agencies to ensure maximum use of several e-government initiatives overseen by OMB, including e-training, integrated acquisition, e-travel, recruitment one-stop and integrated human resources and payroll processing.

In a July 31 conference call from Washington with reporters, OMB official Mark Forman sought to reassure government and industry that the temporary holds do not halt all ongoing IT projects in the affected agencies.

For example, only the financial management system components of the Customs Service modernization project are on hold. That's about 17 percent of the total fiscal 2002 funds appropriated project, said Forman, OMB's associate director of information technology and e-government.

"Why buy some component to integrate with Treasury [Department] financial management system if that might never be used?" Forman asked. "I would hope most people would understand that it doesn't pay to hook up to a department system if [Customs] not going to be part of that system" due to its pending move to a new department.

OMB and the agencies to be affected by the yet-to-be-released memos are working together to determine when the new freezes on spending should occur, Lorentz said.

The memos are being issued under a provision of the Clinger-Cohen Act that allows OMB to shut down underperforming programs and redeploy the funds to programs that are properly managed, Lorentz said.

"This is not a trivial action," he said.

OMB has issued three memos ? the two on homeland security, and a third, which was issued earlier and established a federal enterprise architecture. Lorentz oversees the creation of the enterprise architecture.

The first draft of the architecture is being used to review the spending that has been put on hold so far, he said.

"The most important thing to understand is that we are going to do investments on clearly defined outcomes," he said. "The homeland security experience is going to be a real-time experience about horizontal transformation of the federal government."

Staff Writer Gail Repsher Emery contributed to this story.