OMB Plans to Shape Up, Shake Up IT Projects The Obama administration is promising to change the way the government buys and manages IT systems. The first step: the Office of Management and Budget has halted new spending on 30 IT projects and will review other IT programs that are behind schedule or over budget. OMB Director Peter Orszag instructed agencies to stop issuing new contracts or task orders for all financial system modernization projects. OMB will review the projects with the goal of streamlining them and saving money. The 30 projects are projected to cost $20 billion. In a June 28 letter to agencies, Orszag said the government’s large financial system modernization efforts “have failed at alarming rates.” In a blog post, he cited the Veterans Affairs Department’s two financial systems projects, which have consumed more than $300 million over the past 10 years. “The first project ended in failure and no operational capability has been realized with the second,” he wrote. OMB’s new guidance tells agencies to break up large financial systems projects into smaller, simpler segments rather than trying to overhaul an entire business system at once. It also says senior management must increase oversight of the projects. OMB plans to issue recommendations for overall improvement in the government’s IT procurement and management practices. In a letter to agencies, Orszag and White House chief of staff Rahm Emanuel said the recommendations “will include higher standards for project management practices and personnel, additional mechanisms for holding managers accountable for project results, and more rigorous review processes.” The federal chief information officer, Vivek Kundra, will review all of the highest-risk IT projects across the government and require agencies to submit plans for improving them. Orszag said the orders are part of the Obama administration’s effort to close the “technology gap” between government and the private sector. He said the federal government has missed out on the productivity improvements, many based on information technology, that have transformed private business in the past two decades. “Quite simply, we can’t significantly improve the efficiency and effectiveness of the federal government without fixing IT.” Strategic Sourcing for IT Another change in IT procurement practices may be coming. Dan Gordon, head of OMB’s Office of Federal Procurement Policy, said IT presents “the richest targets” for strategic sourcing. Gordon said GSA’s governmentwide blanket purchase agreements for office supplies could be a model to reduce the cost of some IT products and services.