Buy Lines: Congress should rescind arbitrary spending cuts to defense IT

Stan Soloway

For the first time, the House Armed Services Committee has given a single subcommittee jurisdiction over Defense Department information technology policies and spending. This subcommittee, chaired by Rep. Jim Saxton, R-N.J., deserves credit for its focus on the department's IT strategies and management.

As was demonstrated again in Iraq, IT is the key enabler of modern weaponry and business practices, and it is only appropriate that Congress be interested in the subject.

Yet, frustrated by perceived Pentagon foot-dragging in developing and disclosing an IT architecture and procurement plan, the new subcommittee recommended -- and the House accepted -- a $1.7 billion cut in the defense IT spending for fiscal 2004.

There is always tension when Congress, in exercising its oversight responsibilities, feels the need to "put down a marker." Coupled with mandated reductions in the acquisition work force, the impact of this marker could be very significant.

When budgets are cut or schedules slip, the business cases and acquisition strategies underpinning a program are affected dramatically. Program delays also stretch the timeline within which the program's broader benefits accrue to the agency.

This requires longer-than-expected funding for inefficient -- and typically more costly -- legacy systems, thus adding to the cost of a delay.

IT programs often require vendors to accept significant risk, including upfront capital investments or performance-based payments, some of which are tied to achieving enterprisewide benefits.

Some of the Armed Services Committee's criticisms are warranted, and backed up by various analyses. Fortunately, the Defense Department and the Office of Management and Budget are taking big steps to address them. For example, OMB now prohibits any agency's IT investments until it has validated a business case. These reviews address many of the issues raised by the committee.

The Defense Department is also making progress. A recent General Accounting Office report measured six IT programs against 70 commercial best practices. On average, the programs were implementing 88 percent of those commercial practices. There is little doubt that five years ago, the percentage would have been substantially lower.

And while the GAO study did not look at the overarching strategic and architectural issues of concern to the House committee, it is a strong indicator of the Defense Department's improving management of IT.

The Defense Department has also canceled significant programs for some of the very reasons the House Armed Services Committee raised. For example, the department last year canceled the Defense Procurement Payment System that was slated to replace the aging Mechanization of Contract Administration Services contract administration system. The department did this when it recognized that DPPS would not be compatible with the department-wide financial systems modernization program. In the old days, the Defense Department might have gone forward anyway, assuming whatever interface issues emerged could be dealt with later.

In addition, the military departments are taking action to institute better management of IT requirements, as evidenced by, among other things, the Air Force's new IT "buying council" and the Army's new Enterprise Business Integration Center.

While much more improvement is needed, the Defense Department and OMB are on the right track, and moving closer to imposing the kind of discipline the committee seeks. An across-the-board cut of such significance sends a strong message.

But the programmatic impacts will be even more pronounced, and will be exacerbated by the arbitrary and dangerous acquisition work-force cuts. With the message delivered, it is now up to the House and Senate conferees on the bill to demonstrate some flexibility while still demanding the appropriate management discipline at the Defense Department.

Stan Soloway is president of the Professional Services Council. He previously served as deputy undersecretary of defense. His e-mail is soloway

About the Author

Stan Soloway is a former deputy undersecretary of Defense and former president and chief executive officer of the Professional Services Council. He is now the CEO of Celero Strategies.

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