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OMB FY 2017 Budget Guidance – Agencies Told to Cut More

While the FY 2016 federal budget appropriations bills are working their way through Congress, the Office of Management and Budget (OMB) is looking to FY 2017 and has again directed agencies to submit lower discretionary budgets.

Following their normal budget process and timelines, federal agencies are beginning to prepare their FY 2017 budgets, which will not be submitted to Congress until February 2016 to take effect that October, more than 16 months from now.  As is customary for this time of year, OMB issued a memo with specific budget preparation guidance for FY 2017 to outline any new or specific parameters that agencies are to follow.

Discretionary Budget Requirements

Key provisions in OMB’s guidance to agencies for their FY 2017 budget submission include:

  • A five percent reduction below the agency’s net discretionary total for FY 20 17 as stated in the FY 2016 Budget (unless otherwise directed by OMB)
    • The 5 percent reduction is to apply equally to defense and non-defense programs. Agencies that are split between the two may not reduce one area more than 5 percent to offset the other area.
  • Requirement to sufficiently fund ongoing Presidential priorities
  • Inclusion of a separate section that identifies recommendations on how they will continue efforts to increase effectiveness and reduce fragmentation, overlap, and duplication
  • Identifying additional investments in programs that support their missions, especially programs with strong evidence of effectiveness. However, the agency’s total net discretionary for FY 2017 may not exceed the FY 2017 total provided in the FY 2016 budget request. Agencies should separately identify and rank these investments by priority.

As in previous years, agencies are to exclude the following:

  • Shifting costs to other parts of the Federal budget
  • Reclassifying existing discretionary spending to mandatory
  • Reductions to mandatory spending to be enacted in appropriations bills
  • Across-the-board reductions
  • Enacting new user fees to offset existing spending, (although agencies may submit these separately as alternative ways to achieve the guidance level.)

Other Parameters

In addition to the directives above, agencies are instructed to continue to support the President's Management Agenda (PMA) focused on agency effectiveness and efficiency as well as government-funded data and research efforts and workforce improvements. In support of the PMA, OMB wants agencies to focus on

  • Implementing CAP goals
  • Using data-driven management reviews (e.g. FedStat)
  • Supporting Agency Digital Service Teams
  • Reducing their real property footprint
  • Reducing improper payments
  • Enhancing shared services
  • Implementing the DATA Act and FITARA.

Further, OMB wants agencies to prioritize institutionalizing the use of data and evidence to drive better decision-making and achieve greater impact at their agencies.

While there are no surprises or major changes in how OMB is directing agencies to develop their budgets over recent years, it seems that the number and complexity of requirements continues to grow.

Reducing Areas of Duplication and Overlap in Federal Programs Could Save Billions

Last week, GAO released its fifth annual report on duplication, fragmentation and overlap in federal government programs.  The report is meant to identify areas of opportunity to gain efficiencies, reduce costs, and increase federal revenue by decreasing duplication and overlap.

The report identifies 24 areas of opportunity to improve effectiveness and efficiency, and 66 new actions to this end.  In this year’s report GAO found 12 new areas in which there is evidence of fragmentation, overlap, or duplication, such as the Military Health System US Family Health Plan which duplicates the efforts of DoD’s managed care support contractors.  GAO also offers recommendations for reducing the cost of government operations or enhancing revenue collections in 12 other areas.

Many of the identified areas for improvement involve defense or health related programs and activities, but the report did point out that hundreds of millions of dollars could be saved government-wide if agencies applied better management of software licenses.  GAO suggests OMB issue a directive to assist agencies in this area.

The report also reviewed progress toward areas and actions identified in previous reports to reduce fragmentation, duplication and overlap. 

The chart below shows progress toward ending duplication and overlap in areas identified in FY 2011-2014 reports, as well as progress toward specific actions offered in those reports.

According to GAO, 76% of 458 actions identified had been addressed or partially addressed, and 20% had not been addressed.  Executive branch and congressional efforts to address these actions over the past 4 years have resulted in over $20B in financial benefits, with about $80B more in financial benefits anticipated in future years from these actions.

GAO urged Congress and executive branch agencies to continue progress toward reducing duplication and overlap. Fully addressing the remaining actions identified in GAO’s annual reports could lead to tens of billions of dollars of additional savings.

GAO recognizes the difficulty in addressing duplication and fragmentation, in part due to the lack of reliable performance and budget data.  It suggests that implementation of the DATA Act and the GPRA Modernization Act of 2010 should improve the amount and reliability of financial and performance information.  GAO has also developed an Evaluation and Management Guide to assist agencies in identifying and resolving fragmentation and overlap, and options to consider for addressing or managing such instances.

 

 

CIOs Claim IT Reporting to OMB is Not Useful for Their Own IT Management

In a recent GAO study, CIOs claimed that required IT reporting to OMB was not useful to their own IT management.  OMB uses the information reported by CIOs with the goal of improving the management, oversight, and transparency of the federal government’s IT as a whole. But according to CIOs, reporting efforts on their part are burdensome and not helpful in improving IT management.  

OMB requires agencies to routinely report on IT management in five areas:  

  • IT strategic planning  
  • Capital planning and investment management 
  • IT security 
  • Systems acquisitions, development, and integration  
  • E-government initiatives

OMB directs agency CIOs to respond to 36 IT management reporting requirements within the five IT management areas.  Reporting frequency varies from monthly, quarterly, annually and “as needed” depending on the requirement, with most requiring quarterly or annual reporting.  

Agencies report and transmit the information regarding their IT initiatives via the following methods/systems:  

  • CyberScope – for 5 requirements  
  • Integrated Data Collection – for 7 requirements  
  • MAX Portal – for 3 requirements  
  • Federal IT Dashboard  - for 6 requirements  
  • Agency Websites – for 9 requirements  
  • Data Point – for 1 requirement  
  • DHS Continuous Monitoring Dashboard – for 1 requirement   
  • Federal Data Center Consolidation Initiative Program Management Portal – for 1 requirement       
  • Meetings with OMB Officials – for 2 requirements  
  • E-mail to OMB – for additional requirements as needed

CIOs reported that addressing the reporting requirements did not always clearly support departmental priorities and took a significant level of effort to implement.  Agencies reported spending approximately $150M to $308M annually to report to OMB, in part due to the frequency, formatting, duplicative elements and differing data collection systems in use. 

CIOs identified the following reporting as most useful in managing IT:  

  • Information Resources Management strategic plan  
  • Enterprise roadmap  
  • Exhibit 53  
  • IT investment performance updates

Although OMB has taken steps to streamline some IT reporting requirements, the efforts do not address additional challenges, such as the use of multiple online tools to report information. If OMB addressed the IT reporting issues identified by CIOs they could make the reporting effort and information gained a more useful tool for IT management at the agency level.  GAO recommends that OMB collaborate with CIOs to address proposed reporting improvements and challenges and ensure a common understanding of priority IT reforms.  

 

Room for Expansion across Agency Shared Services Adoption

A recent survey of federal agency leadership explored drivers behind the uneven adoption of shared services for acquisition, human resources, and information technology. Delving into agency business cases sheds light on which agencies are leading the way with transitioning major information technology efforts to shared service environments. 

Survey Summary

In March 2015, the Partnership for Public Service and Deloitte released findings from a survey on shared services progress. Researchers interviewed CFOs and leaders from 18 of CFO agencies to take stock of federal shared services including the attitudes and efforts underway across acquisition, human resources (HR), and information technology (IT). The respondents offered varying perspectives on government buying. Some viewed agencies as independent service providers, which may lend a competitive aspect to shared service arrangements. Others are inclined to see government as a single purchaser, which contributes to a more collaborative environment. Over half of respondents (55%) indicated that terminating or transitioning services was difficult. 28% suggested it was a moderate challenge, and 17% said it was easy. Survey respondents identified primary objectives for adopting or expanding shared service use. The top drivers included cost savings (78%), mission delivery (67%), customer service (56%), and cost avoidance (50%).

 

The survey findings stopped short of offering assessing the status of each of the agencies. However, agency budget materials provide some insight for plans related to shared services. 

Observations from IT business cases

According to the Office of Management and Budget’s exhibit of business cases for major IT investments, federal agencies identified 738 major efforts totaling $43,609.1 million in their FY2016 budget request submissions. Of these investments, 383 include current or planned shared service spending, nearly 52% of those major IT efforts. 

Across the Department of Defense’s 124 major investments, 41 include current or planned efforts for shared services. Total funding associated with these efforts totals over $7.3 billion. Due the nature of the data reported, it is unclear what portion of those resources will be directed toward shared services. Of the major investments planned Defense-wide, 58% involve shared services. Across the Army’s 31 major efforts, 23% have current or planned shared service elements.  19%of the Air Force’s 31 major investments include shared services, and 16% of the 19 major IT projects for the Navy and Marine Corps do as well.

Analysis of the major investments across civilian agencies highlights the range of adoption progress across organizations. By the level of spending associated with those investments, the top five civilian agencies for shared services are Veterans Affairs, Homeland Security, Health and Human Services, the Department of Commerce, and the Department of Agriculture. 79% of the 24 major investments at the Department of Veterans Affairs include current or planned spending on shared services. At the Department of Homeland Security, 66% of 89 major investments involved shared services. Within Health and Human Services, 60% of 94 major efforts include shared services components. 72% of the 23 major investments detailed for the Department of Commerce have shared service elements. The Department of Agriculture reported on 24 major IT efforts, 83% of which include shared services.  Total funding associated with these major investments across the top five agencies combines to roughly $12,070 million. As with the Defense Department, the portion of each fund intended for shared services is not specified.

Take Away

 

Agencies are approaching shared services as a means to increase operational and cost efficiencies. In some cases, concerns about mission delivery contribute to some reluctance to relinquish program control.  In others, the ability to standardize and ensure consistency of services is helping shared services gain traction. Additionally, agency leaders are working to resolve uncertainty about specific benefits and costs associated with the move to shared services in order to decide if it’s right for a particular organization. Given the varied landscape of mission and program requirements across the government, it’s hardly surprising that there’s a range of positions and approaches in play for how shared services are being implemented. 

 

Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

Federal Acquisition Improvement Takes Aim at IT

With over 3,300 contract units across the government, collaborating to share information and best practices can be challenging. Back in December 2014, the Office of Management and Budget’s Office of Federal Procurement Policy (OFPP) described near-term to transform federal procurement. 

OFPP administrator Anne Rung’s memo to federal agencies outlined current priorities to transform government buying. These areas include category management, acquisition workforce and processes, and government-industry communication. Milestones for many of the efforts and actions associated with these areas will be approaching in the next few months. 

Category Management

OFPP aims to shift from managing government purchases and prices individually to establishing categories for common spending and costs. Unnecessary duplication of contracts across government for similar goods and services burdens vendors with proposal preparation costs and administrative expenses, which can have a significant impact on small businesses. This shift in government buying includes promotion of strategic sourcing, in particular looking to optimize the $25 billion the government spends annually on commodity IT. To support this push, the General Services Administration is cataloging prices paid for IT goods and providing access to contract details for related products to highlight best practices. 

Talent Management and Innovation

The Office of Science and Technology Policy (OSTP) and OFPP are taking steps to encourage adoption of best practices within government purchasing of digital services and fostering innovation. These steps have included releasing a draft of the TechFAR Handbook and exploring case studies of resourceful contracting practices. OSTP and OFPP are collaborating on a plan to increase the government’s digital acquisition capabilities. To further support these efforts, the U.S. Digital Services is expected to launch a pilot program for training agency personnel in digital acquisition. One of the areas targeted for these activities is agile development. 

Strengthen Government-Industry Relationships

OFPP is developing an approach to improve communication between government and industry. Guidance is in the works to allow open feedback from industry on acquisition process improvement and to identify trends and issues. The guidance will shape Acquisition 360, an effort to formalize the agency collection of feedback related to acquisition processes and identify areas for improvement. The focus on strengthening relationships includes establishing enterprise-wide vendor managers, a step that will begin with recruiting vendor managers to support relationships with key IT commercial contractors. 

While these efforts will address all government buying, near-term efforts are zeroing in on agency IT. In particular, activities related to category management are expected to really dig into how agencies are buying technology products and services. It is worth noting, however, that the plans associated with this transformation initiative do not paint a picture of a sudden, new reality. Rather, they suggest ongoing activities to strategically reshape the landscape of government acquisition. As these current transformation efforts continue, pockets of advancement in different contracting organizations will contribute to gradual change across the government.

 

Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

 

Federal Improper Payment Rate Rises for First Time in Five Years

The federal improper payment rate rose from 3.5% of program outlays in FY 2013 to 4.5% in FY 2014, amounting to $124.7 billion up nearly $19 billion from FY 2013.

The federal government hasn’t seen a rise in the improper payment rate since FY 2009 when improper payments rose 5.4% over the FY 2008 rate.  According to paymentaccuracy.gov, the improper payment goal for FY 2014 was 3.19% of total program outlays. 

According to a recent GAO report on fragmentation, overlap, duplication, and improper payments, the rate increase was primarily due to estimates for Medicare, Medicaid, and the Earned Income Tax Credit, which account for over 76% of the government-wide estimate.  The improper payment totals span 124 federal programs across 22 agencies. 

Comptroller General Gene Dodaro told the Senate Budget Committee last week that the government has made progress in addressing program duplication and fragmentation.  “For the first time in recent years, the government-wide improper payment estimate significantly increased.”

GAO has made numerous recommendations it asserts could improve program management and help reduce improper payments such as improving the use of prepayment edits in Medicare and requiring states to audit Medicaid payments to and by managed care organizations.

Attention has been focused on improper payments for a number of years resulting in the enactment of the 2002, 2010 and 2012 improper payments acts.  Until this past fiscal year, agencies have made headway in rooting out waste, fraud and abuse leading to a decline in improper payments and improper payment rates.  However, agencies continue to face challenges, such as statutory limitations and compliance issues, in reducing improper payments.

OMB is in the process of updating some of its guidance to help agencies more easily identify improper payments.  OMB is updating Circular A-123 to include GAO standards for internal management control assessments to limit fraud.  The new Appendix C of A-123 will do the following:  

  • Reconcile most recent improper payment act requirements (IPERIA)  
  • Consolidate and streamline reporting requirements  
  • Provide more detailed categorization of improper payments and establish a taxonomy  
  • Add on an internal control framework for addressing improper payments

 

In an interview with Federal News Radio, OMB Controller David Mader stated, "OMB will be working closely with several of the departments over the course of 2015 to see if we can better understand what is driving the improper payment rate, and then stepping back and saying to ourselves, 'can we mitigate that risk, because it is a risk, by changing business processes, introducing technology, bringing in new data to look at and/or do we need some legislative fixes?'"

 

New Federal Cybersecurity Organization Popping Up Everywhere

It seems that “you can’t swing a dead cat” around Washington, DC these days without hitting a new federal cybersecurity organization. In just the first two months of 2015 several new cyber- units have been announced that touch nearly every area of federal cybersecurity – from the defense to intelligence to civilian segments.

The White House & Office of the Director of National Intelligence (ODNI)

Recently, the White House announced the creation within the ODNI of the Cybersecurity Threat Intelligence Integration Center (CTIIC) (or CTIC, if you leave out the “integration,” as I have seen in some press stories) to fill a void by collecting and integrating cyber-threat intelligence and producing coordinated cyber-threat assessments for network operators and policy makers. Subsequently, Suzanne Spaulding, the Department of Homeland Security (DHS) undersecretary for the National Protection and Programs Directorate (NPPD) added that the center’s scope will go beyond cybersecurity to integrating broader intelligence information in a form that can be declassified and then sharing the information across relevant government and industry sectors. The $35 million agency was the latest news in federal cybersecurity, even to those in Congress.

The Department of Defense’s (DoD)

Back in January, the Defense Information Systems Agency (DISA) announced that it is launching a new cyber defense organization – the Joint Task Force-DoD Information Networks (JTF-DoDIN) – as part of the broader DISA reorganization. The new cyber organization is taking over all operational defensive activities from the U.S. Cyber Command (USCYBERCOM) to free it up to focus on cyber- policy and strategy in the face of fast growing threats.

The Office of Management and Budget (OMB)

In addition to working on guidance for the 2014 update to the Federal Information Security Management Act (FISMA) as well as several cybersecurity policy directives, OMB has established an E-Government Cyber unit under the existing Office of E-Government and Information Technology to lead their cyber- initiatives. The result of legislation passed late last Congress, the new unit has $15 million in new funding included in the FY 2016 budget request. E-Gov Cyber will expand OMB’s reach within the .gov cyber- realm beyond Cyberstat’s data-driven, risk-based framework and issuing cybersecurity-related guidance to include coordinating agency responses to cyber- incidents and vulnerabilities.

Central Intelligence Agency (CIA)

Although a new organization at the CIA has not been created there, yet . . . it appears that the possibility has more than crossed the minds of agency leadership. The CIA is expanding its cyber-espionage capabilities to overcome its increasingly obsolete approach to espionage due to the rapid proliferation of technologies like smartphones and social media. CIA Director John Brennan is calling for greater use of cyber capabilities in nearly every facet of agency operations, even considering the creation of a new cyber-directorate that would elevate the agency’s technology experts to be on par with CIA’s operations and analysis units.

Implications

According to the FY 2016 federal budget request release a few weeks ago, the president has proposed $14 billion in cybersecurity funding for cybersecurity initiatives and research. The proposal underscores the growing prominence that information resources and technologies play in our nation and the heightened sense that we should be doing more to protect these resources.

Yet, the fiscal climate for IT programs over the last few years has been uncertain, and with few exceptions notwithstanding, that pressure does not seem to be letting up just yet. However, given some of the high profile cybersecurity failures that have made the news in recent months it may be that the “cybersecurity card” is one of the few things that will ensure funding from Congress for needed IT investments at an agency.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about 
GovWin FIA. Follow me on Twitter @GovWinSlye.

 

Industry Leaders Chime In on Likely Federal CIO Priorities

New federal CIO Tony Scott is being welcomed with cautious optimism by federal IT industry leaders.  Most believe he has the right skills and experience for the job. 

A recent Federal Times article speculates about Scott’s likely priorities as CIO:  cybersecurity, IT workforce, and IT project performance. 

Cybersecurity heads the list of expected priorities for the new federal CIO.  Backed by administration support, cybersecurity is allotted $14B in the president’s FY 2016 budget request.  Protecting federal data and networks is a high priority for the administration.   Scott will play a vital role in coordinating cyber efforts, capitalizing on technology and communicating policies to department and agency CIOs.  Forums where CIOs can share best practices and challenges, such as the CIO council, will be very valuable in these endeavors.

Scott is also expected to address IT workforce issues.  To bring government to the cutting edge of technology, the IT workforce must undergo continual training and also bring in private sector expertise.  According to OPM, nearly 50% of the federal IT workforce is over 50 years old.  While age doesn’t limit expertise or creativity, it does call for continual training to be on the cutting edge.  Industry hopes that that training extends beyond the traditional IT workforce and stretches to contract, acquisition and program personnel.

Federal industry executives also believe Scott will focus on IT project performance.  They suggest that the focus should be on using data to improve projects rather than looking at reporting requirements as just required mandates.  

Industry experts also see the new CIO as playing a role in the implementation of new digital service teams across agencies.  The federal budget request calls for creating teams at 25 agencies.     

Scott is the first federal CIO who comes to government with experience as a CIO.  He brings a private sector perspective to the business of government, along with commercial best practices.    “He’s going to be looked at as somebody to be a coordinator and also a leader in terms of identifying what are the top priorities and really leading the federal CIO community,” according to Jason Kimrey area director of Intel Federal.   Federal and industry IT leaders are hopeful that Scott will make a positive and lasting impact on federal IT.

 

FY 2016 Budget Request – Information Technology Highlights

Information Technology (IT) budgets are UP for fiscal year (FY) 2016 nearly across the board for major federal departments. The Obama Administration released its FY 2016 Budget request Monday morning, and around 6 p.m. the Office of Management and Budget (OMB) posted details on the Information Technology budget proposal, revealing a return to year-over-year budget increases for both the Defense and Civilian top-line numbers and net increases for most Executive Branch departments and agencies.

In a previous entry we looked at the overall FY 2016 discretionary budget highlights across the top agencies. Here, we will focus on IT.

According to the IT budget request for FY 2016, the overall IT budget for Executive Branch departments and agencies comes in at $86.3B, up 2.3% from the FY 2015 enacted level and 5.5% higher than the $81.7B spent in FY 2014. However, factoring out grants to state and local governments, the total IT budget for FY 2016 comes in at just over $79B, an increase of 4% from FY 2015, which was effectively flat from FY 2014. (See table below.)


 

AGENCY HIGHLIGHTS

In addition to the many budget increases for the next fiscal year, many agencies are also allocating greater funds to Development, Modernization, Enhancement (DME) efforts over Operations and Maintenance (O&M). These and other funding observations are included in the following agency highlights.

Department of Defense

The DoD is allocated a total of $37.3B in IT funds for FY 2016, a 3% increase over the FY 2015 enacted level of $36.3B. The total funds are split between classified and non-classified areas, $6.6B and $30.7B respectively. If enacted, this would mean a 2% increase in classified DOD IT and a 9% increase in non-classified DOD IT.

OMB released only top-line IT budget numbers for DoD and promised detailed updates in early March. This is fairly common practice each budget cycle, but shrouds DoD IT spending longer than any other department. Until then, we pursued what IT-related spending information could be gleaned from other DoD budget documentation.


Air Force

  • $1.8B in Procurement funds for Electronics and Telecom Equipment, an increase of more than $400M (30%) over FY 2015
  • $2.6B in Space Procurement funding, which budget materials note that FY 2016 marks the first year that such procurement are broken out.
  • $2.4B in Science and Technology RDT&E funds, an increase of $96M from FY 2015
  • $287M in Procurement funds for the Strategic Command And Control program, up from $140M (+105%) in FY 2015
  • $103.7M for AFNET, up 15% from the $90.5M level in FY 2015
  • $31.4M in Procurement funds for “General Information Technology,” down from $43M in FY 2015.
  • $9.6M for Integrated Strategic Planning & Analysis Network (ISPAN), an increase of $500K (6%) from the FY 2015 level

Army

  • $3.5B in Procurement funding for Communications and Electronics Equipment
  • $783M in O&M funding for upgrades to the Warfighter Information Network-Tactical (WIN-T)
  • $260M in Procurement funding for the Distributed Common Ground System-Army
  • $152.2M in Procurement funding for Automated Data Processing Equipment
  • $103M in Procurement funding for the Installation Information Infrastructure Modernization (IMOD) Program
  • $72.2M in Procurement funding for the Communications Security Program
  • $43.5M in Research, Development, Test, and Evaluation funding related to WIN-T for developing Network Operations software to meet the Army Network Convergence goals
  • $22M in Procurement funding for the Unified Command Suite

Navy

  • $17.9B in R&D funding, up nearly 12% from the FY 2015 level of $16.0B
  • $55M in R&D for Cyber (ORT/TFCA only), up from $3M in FY 2015
  • $2.4B in Navy Procurement funds for Communications and Electronics Equipment, up $158M (7%) from FY 2015
  • $279M in Procurement funds for CANES, down from $336M in FY 2015
  • $31.8M For the Distributed Common Ground System-Navy (DCGS-N), up from $23.7M in FY 2015
  • $135.7M for the Information Systems Security Program (ISSP), a 26% increase over the FY 2015 level of $108M
  • $740M in Marine Corps Procurement funds for Communications and Electronics Equipment, including $67M to support NGEN. The total is up from $570M in FY 2015

Defense-Wide

  • $12.3B in funding for the Science and Technology program for future technologies
  • $7.4B in funding for C4I systems
  • $7.1B for space-based systems
  • $800M for the MQ-9 Reaper Unmanned Aircraft System
  • $84.4M in Procurement funding for equipment for the Joint Information Environment, a 539% increase over the $13.3M invested in FY 2015
  • $57.7M in Research, Development, Test, and Evaluation funding for SOF Advanced Technology Development
  • $11.7M in Research, Development, Test, and Evaluation funding for Insider Threat detection

Agriculture

The USDA’s FY 2016 budget request for IT is $1.95B, 1.56% higher than the estimated level of $1.92B in Fiscal Year 2015.

Funding highlights include: 

  • $431M in the USDA’s Working Capital Fund, with money in this account used to finance central services in the USDA, including automated data processing systems for payroll, personnel, and related services; telecommunications services; and information technology systems
  • $66.3M in funding for information technology related to Farm Service Agency IT programs, including work related to the Modernize and Innovate the Delivery of Agricultural Systems (MIDAS) program
  • $29.5M in DME funding for the Natural Resources Conservation Service’s Conservation Delivery Streamline Initiative (CDSI)
  • $29M in DME funding for the Office of the Chief Information Officer’s Optimized Computing Environment (OCE)
  • $28M for the USDA’s cyber security requirements and programs
  • $7.6M to fund a USDA Digital Services team that will focus on transforming the department's digital services in line with the White House’s Smarter IT Delivery initiative
  • $4.25M for information technology infrastructure at the Animal Plant and Health Inspection Service
  • $3M to implement the Digital Accountability and Transparency Act, including changes in business processes, work force, and/or information technology assets
  • $1M for the Common Computing Environment, a shared information technology platform for the Farm Service Agency, the Natural Resources Conservation Service, and Rural Development

Commerce

The president’s budget request provides $2333.2M in funding for the Commerce Department’s information technology, an 8% increase over FY 2015 enacted levels. 62% of FY 2016 funds are dedicated to operations and maintenance, a 3% increase over the FY 2015 enacted levels. Funding to support development, modernization, and enhancement efforts totals over $880M for FY 2016, rising above the amount enacted in FY 2015 by 38%.

Funding highlights include:

  • The top ten investments by requested funding for FY 2016 combine to make up just over 57% of Commerce’s entire IT budget.
  • Includes $339.7M in new investments for FY 2016.
  • Funding for upgrades is set to receive $5.2M for FY 2016, level with the enacted amounts for FY 2015.
  • Mission delivery and management support efforts request an additional $84M, bringing the total for FY 2016 to $1,415.5M and marking a 9% increase over the enacted level from FY 2015.
  • Commerce aims to provide $798.3M in funding for infrastructure, office automation, and telecommunications, an increase of 8% over levels from FY 2015.
  • Increasing 27% over the enacted level for FY 2015, Commerce has identified $116.2M for efforts related to enterprise architecture, capital planning, and CIO functions.

Energy

The president’s budget request provides $1,469.1M in funding for the Energy Department’s information technology, a 1% drop from FY 2015 enacted levels. 92% of FY 2016 funds are dedicated to operations and maintenance, a 1% increase over the FY 2015 enacted levels. Funding to support development, modernization, and enhancement efforts decline below the amount enacted in FY 2015 by $25.M, marking a drop of 18%.

Funding highlights include:

  • With details for over 700 investments for FY 2016, the top ten investments by requested funding combine to make up around 11% of Energy’s IT budget.
  • Includes $72.7M in new investments for FY 2016.
  • Consolidation activities are set to receive $43.6M.
  • Funding for upgrades is set to receive $3.5M for FY 2016, level with the enacted amounts for FY 2015.
  • Energy is targeting $663.8M in funds for mission delivery and management support, marking a drop of 2% from FY 2015.
  • Maintaining the enacted funding level from FY 2015, Energy aims to provide $747.6M for infrastructure, office automation, and telecommunications.
  • Increasing 7% over the level for FY 2015, Energy is looking to provide $73.5M for efforts related to enterprise architecture, capital planning, and CIO functions.

Health and Human Services

The president’s budget request provides $11.4B in total IT funding to HHS, a 10% decrease over FY 2015 enacted levels. Grants account for $6.4B of the total IT budget.  HHS’ proposed IT budget without grants totals $4.9B which is a 2% decrease over FY 2015.

Funding highlights include (excludes grants):

  • DME accounts for $1.1B or 22% of the total IT budget, a 14% decrease from FY 2015 enacted levels
  • 545 total investments of which the top 10 represent 37% of the total IT budget at $1.8B
  • $149M slated for cloud investments, a 5.5% decrease from FY 2015
  • Notable changes in agency IT budgets include CMS $2.3B down 3%, NIH $781M down 2.4%, FDA $584 up 1%, and CDC $324M down 6.5%
  • Notable program changes include CMS IT Infrastructure – Ongoing down $95M, CMS Federally Facilitated Marketplace (FFM)down $60M, and CMS Beneficiary e-Services up $22M

Homeland Security

The budget request provides $6.2B for IT investments at DHS for FY 2016, a 4% increase over the FY 2015 enacted level of $5.9B.

Funding highlights include:

  • DME accounts for $1.0B or 16% of the total IT budget, a $76M increase from FY 2015 enacted levels
  • $150.3M in DME funds for USCIS Transformation, which makes up 83% of the total FY 2016 funding of $180.9M
  • $463.9M for the National Cybersecurity & Protection System (NCPS), including $95.8M in DME funds, 21% of the total
  • $102.7M for the Continuous Diagnostics & Mitigation (CDM) program, of which $91.4, or 89%, are DME funds
  • $88.5M in DME funds for the CBP Non-Intrusive Inspection (NII) Systems Program, which represents 42% of the overall $209.3M for the year
  • $80.3M in funds for the NPPD Next Generation Networks Priority Services (NGN-PS), 100% of which is DME

Interior

The president’s budget request provides $1,098.5M in funding for the Department of the Interior’s information technology, a drop of less than one percent from FY 2015 enacted levels. 92% of FY 2016 funds provide operations and maintenance, a 2% increase over the FY 2015 enacted levels to $1014.2M. At less than $85M for FY 2016, support for development, modernization, and enhancement efforts drops 20% below the amount enacted in FY 2015.

Funding highlights include:

  • The top five investments by requested funding for FY 2016 combine to make up over 61% of Interior’s entire IT budget.
  • New investments receive $5.6M for FY 2016.
  • Requesting $402.1M for mission delivery and management support efforts, Interior looks to slightly raise the funding for these investments bumping the total up by 1% over the FY 2015 levels.
  • Interior’s request of $657.6M for investments targeting infrastructure, office automation, and telecommunications marks a 1% decrease from FY 2015 enacted levels.
  • Dropping 13% from the level enacted for FY 2015, Interior has identified $38.3M for investments related to enterprise architecture, capital planning, and CIO functions.

NASA

The president’s budget request provides $1,390.4M in funding for NASA’s information technology, a 2% decrease from FY 2015 enacted levels. 95% of FY 2016 funds are dedicated to operations and maintenance, maintaining the FY 2015 enacted levels at $1,323.1M. Funding to support development, modernization, and enhancement efforts takes a hit for FY 2016, dropping 27% below the amount enacted in FY 2015 to $67.3M.

Funding highlights include:

  • The top five investments by requested funding for FY 2016 combine to make up nearly 59% of NASA’s entire IT budget.
  • NASA is looking to maintain its spending for mission delivery and management support, requesting $942.8M for FY2016.
  • $445.2M for Infrastructure, office automation, and telecommunications, a 2% drop from FY 2015 levels.
  • Maintaining the funding level enacted for FY 2015, FY 2016 would see $2.5M for efforts related to enterprise architecture, capital planning, and CIO functions.

Justice

The president’s budget request provides $2732.3M in funding for the Justice Department’s information technology, a 4% increase over FY 2015 enacted levels. Topping $2,250M for FY 2016, 83% of these funds are dedicated to operations and maintenance, marking a 5% increase over the FY 2015 enacted levels. At $476.1M for FY 2016, funding to support development, modernization, and enhancement efforts stay fairly level with the amount enacted in FY 2015, dropping by only 1%.

Funding highlights include:

  • The top ten investments by requested funding for FY 2016 combine to make up nearly 37% of Justice’s entire IT budget.
  • Includes $110.6M in new investments for FY 2016.
  • $478.6M is requested for system upgrades, an increase of around $5.5M over enacted levels for FY 2015.
  • Consolidation activities are set to receive $237.3M.
  • Dropping by 2% from the enacted FY 2015 levels, the request for mission delivery and management support activities totals $1,138.0M for FY 2016.
  • Justice aims to provide $1,413.8M in FY 2016 for infrastructure, office automation, and telecommunications, marking an increase of 10% from the level enacted for FY 2015.
  • Rising 23% above the FY 2015 level, Justice has identified $152.2M for efforts related to enterprise architecture, capital planning, and CIO functions.

Social Security Administration

SSA sees a 7% budget increase for FY 2016, growing to $1.7B from $1.6B in FY 2015.

Funding highlights include

  • At SSA DME accounts $705M or 42% of the total FY 2016 IT budget
  • $278.4M is allocated for Non-Major Infrastructure IT investments, of which 275.5M (99%) is DME
  • $55.0M in DME funds for the Disability Case Processing System (DCPS)      , which accounts for 92% of the total $60M budget
  • $68.5M slated for Non-Major IT Security Initiatives, 62% of which ($42.7M) is new development funds
  • $29.1M in new DME funding for the Intelligent Disability program, which makes up 84% of the $34.8M total

State

The State department receives $1.6B in IT funds for FY 2016, up 15% with an increase of $218M from FY 2015.

Funding highlights include

  • $140.4M of total agency DME funds account for 9% of the total FY 2016 IT budget and increases $3M from FY 2015
  • $28.5M for Consular Systems Modernization, of which $18.8M (66%) is DME funds
  • $13.3 in funding for the Architecture Services program, 100%        of which is DME
  • $11.0M in DME funding for Bureau IT Support, which accounts for 5% of the overall $230.3M allocated for FY 2016
  • $10.9M for DME efforts around the Global Foreign Affairs Compensation System (GFACS), or 35% of the total $30.8M in funds
  • $43.3M in total funding for the Integrated Personnel Management System (IPMS), $10.1M (23%) of which is DME
  • $31.6M in total funding for the Earnings Redesign initiative, $27.6M (88%) of which is DME

Transportation

The DOT’s FY 2016 budget request for IT is $3.3B, 6.4% higher than the estimated level of $3.1B in Fiscal Year 2015.

Funding highlights include:

  • $245M in DME funding for the FAA’s Terminal Automation Modernization and Replacement Program (TAMR-P)
  • $238M in DME funding for the FAA’s Data Communications NextGen Support (DataComm) program
  • $215M for the FAA’s Automatic Dependent Surveillance-Broadcast (ADS-B) system
  • $200M for the FAA’s Facilities & Equipment account to finance major capital investments in FAA power systems, air route traffic control centers, air traffic control towers, terminal radar approach control facilities, and navigation and landing equipment
  • $3M to implement the Digital Accountability and Transparency Act, including changes in business processes, work force, and/or information technology assets
  • $60M for NextGen operations planning activities at the FAA
  • $42.6M in funding through September 30, 2018 for information management related to Motor Carrier Safety Operations and Programs
  • $20M for FMCSA’s commercial vehicle information systems and networks deployment program and Information Technology Deployment (ITD) program
  • $9M to fund a DOT Digital Services team that will focus on transforming the department's digital services in line with the White House’s Smarter IT Delivery initiative
  • $8M for cyber security initiatives, including necessary upgrades to the DOT’s wide area network and information technology infrastructure
  • $4M for operation and maintenance of the FTA’s National Transit Database

Treasury

The president’s budget request provides $4.5B in total IT funding to Treasury, a 19% increase over FY 2015 enacted levels.    

Funding highlights include:

  • DME accounts for $933M or 21% of the total IT budget, a 4% increase from FY 2015 enacted levels
  • 280 total investments of which the top 10 represent 56% of the total IT budget at $2.5B
  • $330M slated for cloud investments, a 9.6% increase from FY 2015
  • Notable changes in agency IT budgets include IRS $3.2B up 30%, Fiscal Service $697 down 1%, and Departmental Offices $255M down 5%
  • Notable program changes include IRS Main Frames and Servers Services and Support (MSSS) up $219M, IRS Enterprise Services - PAC 9U up $204M, and IRS Applications Development Program Support (ADPS) up $60M

Veterans Affairs

The president’s budget request provides $4.4B in total IT funding to VA, a 5% increase over FY 2015 enacted levels.

Funding highlights include:

  • DME accounts for $639M or 15% of the total IT budget, a 11% decrease from FY 2015 enacted levels
  • 31 total investments of which the top 10 represent 92% of the total IT budget at $4B
  • $49M slated for cloud investments, a 32% decrease from FY 2015
  • Notable program changes include Benefits 21st Century Paperless Delivery of Veterans Benefits up $116M, Medical 21st Century Development Core down $81M, and Interagency 21st Century One Vet up $75M

We will be publishing our complete analysis of the FY 2016 budget request – including IT investments and initiatives – in the weeks to come.

Fellow GovWin Federal Industry Analysis (FIA) analysts Kyra Fussell, Deniece Peterson, Angela Petty and Alex Rossino contributed to this entry.

 

OMB Says No Sequestration for FY 2015

It’s official! The Office of Management and Budget (OMB) has announced that for fiscal year (FY) 2015, federal agencies will not have to worry about sequestration-related budget cuts. That’s now two years in a row that sequestration has been removed from the radar.

In their latest sequestration update report to Congress, OMB provides their analysis as to why agencies have dodged the sequestration bullet as laid out in the 2011 Budget Control Act (BCA). The report was recently addressed in a Federal News Radio article.

The biggest reason agencies are not feeling quite the same sequestration pressure is because Congress worked out a deal back in 2013 to this effect.  Under the two-year Bipartisan Budget Act (BBA) of 2013, which covered FY 2014 and FY 2015 budget levels, agencies were subject to smaller reductions in the spending caps in 2015 than originally set forth in the BCA.

In the report OMB shows that the defense discretionary budget for FY 2015 of $585.9 billion is down more than $20 billion from FY 2014’s $606.3 billion level, but is coming in right at the revised spending limit under the BBA.  In the non-defense discretionary spending category, federal departments and agencies could spend up to $514.1 billion under the BBA for FY 2015, which would be an increase of more than $9 billion from the $504.8 billion level in FY 2014. However, Congress appropriated nearly $4 billion less than the overall BBA limit for FY 2015. (See table below.) 


Given that Congress has the Department of Homeland Security (DHS) operating under continuing resolution (CR) until mid-February it is possible that some of this budget breathing room will be used when Congress finishes its DHS appropriations bill in the coming weeks.

Implications

As law, the “sequestration ball” remains in the hands of Congress to determine how to move forward. OMB recognizes that “the BBA restored $22.4 billion each ($44.8 billion in total) to the 2014 defense and non-defense categories and replaced the reductions for 2015 that would have taken place with smaller reductions of $44.7 billion to the defense cap and $27.6 billion to the non-defense cap.”  So Congress provided some budgetary relief and breathing room without completely overturning sequestration rules set in the 2011 BCA.

The big question is whether Congress will take similar action for FY 2016 and beyond, or possibly even remove the BCA caps all together – a possibility that remains unclear with the increase in Republican majority in the House and a new Republican majority in the Senate. One thing seems certain. Unless the Congress takes actions similar to the 2013 BBA the sequestration reductions in the BCA will remain the discretionary caps for 2016 through 2021. That will surely color the debate over the FY 2016 budget which was just released this week.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about 
GovWin FIA. Follow me on Twitter @GovWinSlye.

 

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