OMB puts Transportation's IT services program on a short leash

OMB puts Transportation's IT services program on a short leash

The Office of Management and Budget has given the Transportation Administrative Service Center a year to turnaround its governmentwide IT services program'despite a critical audit by the Transportation Department's inspector general.

The IG recently reported that the IT Omnibus Procurement program, which the center has run since 1995, was losing money. Through the program, agencies, including state and local governments, can buy IT services from 36 contractors.

The center's designation as the ITOP executive agent was set to expire today. Transportation officials asked OMB, which has authority over governmentwide IT contracts, to let the center continue running the program.

OMB has agreed, giving DOT an extension until June 3, 2003, to run the program and resolve the problems identified by the IG.

The audit found that ITOP is not financially self-sufficient. OMB requires the center to charge fees to cover its expenses. But the IG team found that the center's fees did not generate revenue to cover expenses. The center reported a loss of $2.1 million on ITOP for the five years that ended Sept. 30, 2001.

Additionally, the report said that ITOP has not streamlined the procurement of IT services.

The IG cited a failure in oversight by DOT management. 'We found no departmental oversight to ensure adequate competition before awarding work,' the audit said.

A senior Transportation official, who requested anonymity, said department brass is reviewing the center's management structure, after which it plans to seek OMB's approval to continue the program beyond June of next year.

In its report, the IG made three recommendations:
  • The DOT center should not seek further extensions of its ITOP authority from OMB until fees cover expenses.

  • The center should suspend ITOP expansion and stop subsidizing customers' use of the program.

  • Transportation's CIO and senior procurement executive should increase departmental oversight of ITOP.

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