Bush's IT spending grows, but leaves some agencies behind

Labor CIO Patrick Pizzella says his department's facing an IT budget cut for the second time in two years.

Agencies are starting to see the fruits of their IT labor in improved efficiency and results, OMB's Karen Evans says.

On the surface, the fiscal 2006 IT budget request of $65.1 billion appears to reflect the Bush administration's willingness to spend on technology, with a 7.1 percent jump overall from 2005 and double-digit percentage in- creases going to the Homeland Security and Veterans Affairs departments.

But below the surface of such a significant rise over this year's technology spending is the more sobering fact that most agencies will be expected to do more with less.

And six agencies that received budget cuts are left to shore up their back-office systems and mission needs through hiring delays, taking from operating programs or doing without.

The real deal

But of the 21 agencies that received increases over 2005 levels, four'the departments of Education, State and Treasury, and the Army Corps of Engineers'are at or below their 2004 IT budgets.

'Well over $300 million of our increase is for one program, the Veterans Health Information Systems and Technology Architecture,' said Veterans Affairs CIO Robert McFarland, whose department would receive a $485 million increase next year. 'The in- crease is reflective of the administration's attitude toward IT as a toolset everyone needs to use, but they need to use it wisely to make government more effective.'

Though VA's increase meets a need for an expensive IT project planned for next year, much of the department's increased funding comes at the expense of other programs or personnel.

That's true throughout government. For instance, the Small Business Administration's IT budget would increase by $5 million, or 13 percent. But Peter Shaw, SBA's budget officer, said the agency would get less funding for personnel to make up for the IT bump.

Another big winner, Homeland Security, is making up for two years of restricted funding, industry analysts said. DHS would receive a $1.2 billion increase to $5.9 billion next year.

'Officials recognized that some of the programs at Homeland Security, such as the U.S. Visitor Immigrant and Status Indicator Technology System, were underfunded, considering the scope of the effort,' said James Flyzik, a former DHS official who now is a partner with the consulting firm of Guerra, Kiviat, Flyzik and Associates of Oak Hill, Va. 'Many of these programs were underfunded at the concept stage. But as you put more meat on the bones of the business cases, you can articulate the funding levels better.'

Even the Defense Department, with an IT budget that makes up nearly half of the entire federal technology expenditure, is slated to receive only a 4.9 percent increase to $30.1 billion.
Defense CIO Linton Wells II said he planned for a tight budget environment.

'Some have characterized it as the tunnel at the end of the light,' he said. '[But] I'm encouraged by the 2006 budget process. In the battle over digits versus widgets, widgets always win. This year, digits are winning.'

The Labor Department, one of the six IT budget losers, is facing a $12 million decrease. Officials said the department would have to tighten its belt.
'The last several years the budget has been flat, and a 3 percent reduction is somewhat flat,' Labor CIO Patrick Pizzella said. 'We will have to manage as we always do and maximize the money we have to make sure our spending makes sense.'

This is the second year in a row Pizzella has faced an IT budget reduction.

'This administration expects results for the money it spends,' he said. 'We have been able to achieve a lot of our goals, and the President's Management Agenda's goals, even though our budget has been reduced.'

Labor's success in meeting the administration's IT mandates during tight budget times is becoming the norm for most agencies. OMB approved more business cases for the 2006 budget process than ever before.

For 17 out of 25 agencies, OMB approved all the business cases, the budget documents noted. And only 342 IT business cases out of 1,087 made the Management Watch List because of flaws in assuring security; meeting cost, schedule and performance goals; or establishing performance measures. The 342 programs account for $15 billion in IT spending, down $7 billion from last year.

Fruits of labor

For this fiscal year, OMB had tagged 621 IT projects out of 1,130 for the watch list'worth an estimated $22 billion in all.

'We are starting to see the fruits of our labor,' said Karen Evans, OMB administrator for IT and e-government. 'We've been asking agencies to tell us how they are becoming more efficient and, to their credit, they have demonstrated the effectiveness of their IT programs and the metrics by which they measured.'

A few areas where agency spending likely will increase are in DOD and Homeland Security. The two largest IT budgets'DOD and DHS'are in the middle of transformations, which the IT budget requests reflect.

'There are a lot of new capabilities and modes of operational services DOD is looking at, dealing with linking networks and getting soldiers a better picture of what is happening on the battlefield,' said Steven Kosiak, director of budget studies for the Center for Strategic and Budgetary Assessments, a Washington consultant group. 'All of the modernization or transformational efforts rest on to some degree putting more money into IT.'

At Homeland Security, U.S. Visit is not the only program that would receive a large increase. The Transportation Worker Identification Card, the Integrated Wireless Network and the Coast Guard's Nationwide Automatic Identification System each would receive budget increases of more than $25 million next year.

'DHS clearly is a winner, and they might not get enough,' said Robert Atkinson, vice president and director of technology and the new economy project for the Progressive Policy Institute in Washington. 'I don't think the question for Homeland Security, as it is for all agencies, is really about overall funding, but it is much more about what the administration is investing in and how well they are doing it.'

GCN staff writers Dawn S. Onley and Susan M. Menke contributed to this story.

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