OMB flexes budget muscles

Retains tight grip on IT spending despite agency gripes

The White House has no plans to relax its control over the budget process that many in government view as a power grab by the Office of Management and Budget.

A recent survey of more than 300 agency information technology executives conducted by the Government Electronic and Information Technology Association found that "agencies are shocked at the OMB control being exerted on IT programs."

OMB is inserting itself much more deeply into the budget-planning process than in previous administrations, requiring more documentation even on smaller projects, according to many survey respondents.

Some agency officials also said OMB is second-guessing their decisions about priorities and putting cost savings ahead of achieving their missions.

"That's flat-out wrong," said Mark Forman, who oversees OMB's reviews of agency IT spending, regarding the latter claims.

The Bush administration's primary aim in driving these changes is to make the government citizen-centric, said Forman, associate director for information technology and e-government at OMB. To accomplish that, agencies are finally being forced to deal with their own chronic management problems, and that requires his agency to exert discipline.

The authority for OMB to assert control over IT spending comes from the 1996 Clinger-Cohen Act, which requires agencies to submit performance plans that link strategic goals to specific actions. Forman's office has threatened to withhold funding on IT projects that aren't supported by an acceptable "business case," justifying the planned expenditure in the agencies' budgets.

"Clinger-Cohen intended OMB to play a greater role. Those changes take time, so I think it was already evolving that way in the last couple years of the Clinton administration," said Olga Grkavac, vice president of the Information Technology Association of America. "It's one thing to be granted authority, it's another to exercise it. I think [Mark Forman] served notice that that's what he intended to do."

James Kane, president of Federal Sources Inc., a McLean, Va., research firm, said OMB has been moving in that direction for a while, but the Bush administration has accelerated the trend.

"In the Clinton administration, the leadership for change came from that CIO level. [Now] the leadership for change is coming much more from OMB," Kane said. "If I had to say where the change [is rooted], it's much more the style of the administration. ... This administration came in with a management agenda, and, by God, they've stuck with it."

Not all federal executives are dismayed by OMB's attempts to gain control over management and budget issues.

"The new OMB is reaching out more and sitting down at the table instead of throwing demands over the transom. Ultimately, this is good," one executive told interviewers with the Arlington, Va.-based GEIA, which represents electronics and IT companies serving the government.

The struggle to establish control already has had an impact on the government information technology industry, such as OMB's move in July to freeze new IT spending on projects over $500,000 by the agencies slated to move into the new Homeland Security Department. Under the freeze, agencies are required to present the business case for each project, demonstrating its necessity, utility and cross-functionality to avoid unnecessary duplication in the new department.

OMB's action did not halt any ongoing work, but it put on hold about $1.1 billion in planned IT spending in fiscal 2002 and 2003, pending a high-level review.

The attempt to rein in agencies' independence is not new, according to Warren Suss, president of Suss Consulting Inc., a Jenkintown, Pa., market research firm.

"We've seen other initiatives over the years to link IT to agency performance," Suss said. "The difference seems to be that OMB has the will to make it work."

OMB is targeting very specific back-office functions, such as payroll, human resources and travel, and trying to consolidate systems and end duplication, Suss said. "This is a very similar kind of strategy to that being used by large corporations," he said.

Scott Hastings, who was just named chief information officer for the Immigration and Naturalization Service, said he can understand why some agencies might resist OMB exerting more authority, but his own views have been altered by the creation of the Department of Homeland Security, where the INS will be relocated.

"What I might have viewed as an impediment at one point, I view [now] as an absolute requirement," Hastings said. OMB is simply asking that agencies implement the requirements of Clinger-Cohen and follow the president's directives on implementing e-government, he said. "I don't know how anyone can argue against" cutting back on duplicative programs, he said.

Forman downplayed complaints of OMB heavy-handedness.

"I maintain that resistance is a lot less than certainly I thought it would be," Forman said. "At the end of the day, this is about how government employees do their work. They want a modern environment."

Perhaps the most visible of OMB's actions is the president's management agenda, five specific areas where OMB is applying the authority of Clinger-Cohen to bring change. The five areas are human capital management, competitive sourcing, financial management, e-government and the integration of budgeting and performance measurements.

OMB periodically releases a "management scorecard," a traffic signal light-like report that tracks the progress of 26 federal departments and agencies in reaching the goals of the agenda.

The latest report, released Nov. 15 at, continued to show most agencies "in the red," with only eight making progress in one or more categories. But OMB also released a progress scorecard, using the same red-yellow-green motif, which was dominated by green.

Forman, who's responsible for agencies' progress on the e-government portion of the management agenda, said there is no conflict between the two charts.

"These are chronic management issues that we're dealing with," Forman said. "We're enforcing that discipline. They've got to focus on their most critical management problems [and] leverage technology" to solve them.

Many critics dismiss the scorecard as a political stunt. "I know when it's going to get to green: February 2004," said one industry observer. "When is the New Hampshire primary?"

An executive with a major systems integrator expressed the same sentiment: "I think what OMB will do is claim success. They will have to, come election time."

Steve Kelman, administrator of OMB's Office of Federal Procurement Policy during the Clinton administration and now a professor at the Kennedy School of Government at Harvard University, said politics could be playing a role in OMB's actions, but overall he sees the agency's efforts as appropriate.

"Some of these things take time, [but] from an appearance perspective, when in essence they started by putting everything in red, [they imply] that all the work done before them means nothing," Kelman said. "The more you start at red and move toward green, the more you create the perception that this is a political scoring system."

Still, Forman is using the budget process to bring about management changes and shape agencies' actions, and he's doing it very skillfully, Kelman said.

FSI's Kane said the creation of the Department of Homeland Security will become the model for OMB's new approach to management and IT. Civilian agencies that do not follow suit will continue to get squeezed by OMB.

Defense agencies are also heading toward the same goal, but they seem to be driven more by the Pentagon's transformation agenda than by White House budget staff, he said.

As for the impact on the government IT industry, most executives say they approve of OMB's actions, even if it slows down some business opportunities.

One high-ranking corporate official said: "They're doing the right thing. In the short term, the IT industry may be hurt some, [but] they clearly believe they're spending too much on IT, and [speaking] as a taxpayer, they're right."

Staff Writer Patience Wait can be reached at

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.


contracts DB