White House orders review of federal technology spending

The White House announced a comprehensive plan Monday to cut government waste by making public-sector technology more efficient.

Office of Management and Budget Director Peter Orszag announced the plan in a Monday blog post, saying the federal government does not effectively use information technology and is wasting billions of dollars a year as a result.

"While a productivity boom has transformed private sector performance over the past two decades, the federal government has almost entirely missed this transformation and now lags far behind on efficiency and service quality," Orszag wrote. "We are wasting billions of dollars a year, and more importantly are missing out on the huge productively improvements other sectors have benefited from."

"Quite simply, we can’t significantly improve the efficiency and effectiveness of the federal government without fixing IT."

The White House’s three-part plan is aimed at getting a better return on investment on the $80 billion the government spends annually on IT.

The first step is an immediate halt to all major financial system modernization projects. These efforts have historically been plagued by delays and cost overruns; some agencies have spent hundreds of millions on modernizing their systems without achieving any tangible results.

"Financial system modernizations projects in the federal government have become too large and complex," Orszag wrote. "By setting the scope of projects too broadly rather than focusing on essential business needs, federal agencies are incurring substantial cost overruns and lengthy delays in planned deployments."

More than 30 financial systems projects, costing a total of $20 billion, will be affected. The administration wants to narrow the scope of these projects to reduce their complexity, cost and the time needed to develop them.

Federal Chief Information Officer Vivek Kundra also will conduct a detailed review of the highest-risk technology projects across the government. Agencies will be required to present improvement plans or risk changes to their fiscal 2012 budgets.

Finally, Chief Performance Officer Jeffrey Zients will develop recommendations, within 120 days, for improving the government's IT procurement and management practices.

"These recommendations will address the root-causes of problems plaguing federal IT projects and focus on proven best practices from inside and outside the federal government," Orszag wrote, adding that the recommendations will include higher standards for project management, additional accountability measures for managers, and a more rigorous review processes.

President Barack Obama has repeatedly promised to effectively harness technology to improve government operations. To that end the administration created the IT Dashboard, which is meant to give users insight into the status of major federal IT projects. However, the site has been criticized for the quality of its data and the frequency of updates.

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