OMB to demand more detailed business cases

Eight steps toward a better business case

  • Provide clearer measurable performance goals

  • Do better risk analysis of cost, schedule and performance

  • Improve lifecycle estimates

  • Use performance-based contracts to mitigate risk

  • Set realistic cost and schedule goals

  • Use earned-value measurement criteria in planning buys

  • Bolster IT security

  • Hire qualified project managers
  • Agencies can expect to do more work on their fiscal 2006 IT business cases than they've had to do in previous years.

    The Office of Management and Budget is considering requiring agencies to follow separate steps in filing business cases for ongoing projects and for initiatives' development, modernization and enhancement phases. OMB also plans to change some rules for contract management and software buying.

    David Muzio, an OMB procurement policy analyst, said the revised Circular A-11 guidance for business cases due out in late June or early July will clarify the administration's requirements. OMB plans to release the draft revision by the end of the month.

    'We are not changing the concepts of where we are going but trying to tweak the process to get better results,' he said. 'We are trying to make the procedures easier to use by clarifying some areas.'

    During the most recent budget process, agencies had problems identifying risks, performance goals and lifecycle costs of projects already under way, Muzio said at a recent IT planning conference sponsored by the Digital Government Institute in Washington.

    OMB also will change how it scores the business cases.

    Agencies did a better job on their business cases this year than in past years, especially in identifying how IT investments benefited program performance and helped the agencies meet their mission goals, Muzio said.

    But OMB also found eight problem areas in the business cases across all of government. These problems led the administration to put 621 projects, with budgets totaling $22 billion, on its watch list.

    Some agencies need project managers to write their business cases instead of someone in the budget or CIO office, Muzio said.

    'We can tell agencies who are on board with the capital planning and investment control process and those who think this still is a paper exercise,' he said. 'OMB can see when the contracting officer or project manager is not involved in the beginning of the process, and it affects the project's scores.'

    Administration officials also will try to push agencies and vendors to use earned-value management, which integrates the scope of a project with cost and schedule milestones. OMB wants to add a rule requiring earned-value management use to the Federal Acquisition Regulation.

    OMB this month will send the government's FAR councils a proposed rule requiring use of EVM in all new contracts.

    The proposal also would require vendors to use project management software certified under the American National Standards Institute and Electronic Industries Alliance's Standard 748-A, which sets EVM criteria for such software.

    Standard review

    'In the business cases agencies submit to us, OMB will look at whether the contractor is certified by ANSI,' Muzio said. 'We will look at all parts of the projects, including in the development and testing phases of a project. Many of the larger contractors already have been certified by the Defense Department, NASA or the Energy Department.'

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