ITIF-聯(lián)邦I(lǐng)T現(xiàn)代化需要戰(zhàn)略和更多資金英

FederalITModernizationNeeds

aStrategyandMoreMoney

ERICEGAN|MAY2022

Despiteaplethoraoflegislation,executivemandates,andotherpolicyguidancetomodernize

agingfederalITinfrastructure,agenciesstillneedaccesstodedicatedITfundingchannelswith

moremoneyandanoverarchingITstrategytohelpguidetheminhowtheyfundITinitiatives.

KEYTAKEAWAYS

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Withoutaccesstogreaterandquickerfunding,agenciesarefallingshortintheirIT

modernizationinitiatives,spendingalmost80percentoftheirITbudgetsonoperations

andmaintenance(O&M),comparedwitharoundhalfintheprivatesector.

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OnlyahandfuloffederaldepartmentsandagenciesareutilizingdedicatedITfunding

channels,suchastheTechnologyModernizationFund(TMF)andITworkingcapital

funds(WCFs).

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OnlyasmallpercentageofthethousandsofactivefederalITprojectsareincollaboration

withotherfederalagencies—eventhoughmanysharethesamechallenges—indicatinga

needforamorecoordinated,overarchingapproachtoITmodernization.

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AclearlydefinedfederalITstrategypairedwithmoremoneythat’sdistributedthrough

expandeddedicatedITfundingchannelswouldhelpaccelerateITmodernizationinthe

federalgovernment.

INFORMATIONTECHNOLOGY&INNOVATIONFOUNDATION|MAY2022PAGE1

CONTENTS

Introduction 2

ABriefHistoryofFederalITLegislation,Mandates,andPolicy 3

OverviewofFederalITFundingChannels 5

CongressionalAppropriation 5

ITWorkingCapitalFunds 6

TechnologyModernizationFund 6

OtherITFundingChannels 7

SummaryofITFundingChannels 8

TheStateofFederalITModernizationFundingandSpendingActivities 8

ImpedimentstoFederalITModernization 10

Problem1:NoOverarchingFederalITStrategy 10

Problem2:InefficientandInaccessibleFundingChannels 10

Problem3:InsufficientFundingtoEscapeTechnicalDebtandO&MCosts 11

Recommendations 11

CreateandFunda“WholeofGovernment”ITStrategyBuiltAroundMissionand

CustomerOutcomes 11

AppropriateMoreMoneytotheTMFtoAddressTechnicalDebtandLegacySystems 12

PublishNewGuidelinesThatImprovetheTMF’sAdministrativeandOperational

Components 12

EstablishITWCFsAcrossAllEligibleAgencies 13

RealignExistingorImplementNewOversightActivitiestoEnsureFederalAgencies

MeetOverarchingStrategicOutcomes 13

Conclusion 14

Endnotes 15

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INTRODUCTION

TheU.S.federalgovernmenthasbeentryingtooverhaulitsITinfrastructurefordecades.Attheendofthe20thcentury,whendigitaltechnologywasgrowing,IT’sabilitytotransformenterprisesbecameundeniable—anditwascleartechnologywouldimpactallspheresofAmericanlife,includinggovernmentservices.Inmostrespects,ITisnotapoliticallycontentiousissue,asmembersofCongress,agencybureaucrats,outsideexperts,averagecitizens,andformerpresidentsfrombothpartiesagreethatfundingITmodernizationisessential.Lastyear,PresidentBidencalledtheneedtoupgradefederalITinfrastructurean“urgentnationalsecurityissue,”particularlyinthecontextofthethen-ragingglobalpandemicthatrevealedlacklustertechnologyacrossalllevelsofgovernment.

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Sincethatannouncement,thepresidenthaspassedtwoexecutiveordersapplicabletofederalITmodernizationthatfocusonimprovingcybersecurityandtransformingthecustomerexperience.

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Thiswasontopofaswathoflegislationoverthepast30yearsfocusingonfederalITmodernization,fromearlierlawsliketheInformationTechnologyManagementReformActof1996tothemorerecentModernizingGovernmentTechnology(MGT)Actof2017.

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Allinall,there’snoshortageofguidanceorlegislationregardingfederalITmodernization.Tocomplywiththesemandates,however,agenciesneedmoney,whichtheyaccessprimarilythroughcongressionalappropriationbutalsothroughdedicatedITfundingchannelssuchastheTMF.

ModernizingfederalITsystemsisanexpensiveendeavor.ProponentsoflargerITbudgetshavepointedtocostlylegacysystems,poorlydesignedpublic-facingwebsites,cybersecurityconcerns,andtheneedtoinvestindataanalyticsandautomationtokeeppacewiththedemandforgovernmentservicesinhopesthatitconvincesCongresstoloosenitspursestrings.

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Andyetdespitethisneed,ITfundingremainsoverinvestedintechnicaldebt—thehiddencostofmaintainingexistingsoftware—andinefficientlydistributedacrossavarietyofpriorityareasandsiloedprojects,andfederalagencieslackanoverarching,cross-cuttingstrategytoguidetheirITspending.Infact,whilemostagencieshaveahighnumberofactiveITprojects,evidencesuggeststhatonlyasmallpercentageofthoseprojectsareincollaborationwithotheragencies.ExceptfortherecentAmericanRescuePlan(ARP)thatarosefromtheCOVID-19pandemic,historicalITinvestmentthroughthecongressionalappropriationprocesshasbeeninsufficienttoshiftawayfromexpensivelegacysystems,letaloneaccomplishmoreforward-lookingITmodernizationefforts.

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Furthermore,currentfundingchannelsaren’teffective,asthey’reeitherill-suitedforiterativeITdevelopment(e.g.,congressionalappropriations)ornotreadilyavailabletomostagencies(e.g.,TMF).

Finally,withoutadefined,overarchingfederalITstrategythatbothfocusesonmissionandfederalcustomeroutcomesratherthanjusttechnologyitselfandguidesagenciestomodernizeinthesamedirectionand,wherepossible,withsharedsystems,theseeminglyendlessandfruitlesseffortregardingfederalITmodernizationwillpersist.Toaddresstheseproblems:

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TheOfficeofManagementandBudget(OMB)shouldimplementalong-term,sustainable“wholeofgovernment”ITstrategywithprioritiesbuiltaroundmissionandcustomeroutcomes,andCongressshouldfundITinitiativesthatalignwiththeseoutcomes.

Congressshouldappropriate$10billiontoaddressthefederalgovernment’stechnicaldebtandreplacecostlylegacysystems,whilealsoexpandingtheTMF.

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TheTMFboardshouldpublishnewguidelinesthatclarifywhichprojectsmeettheirprioritizationthresholdforflexiblerepayment,realignitsprioritieswiththeoverarchingfederalITstrategy,andsharehowagencieswillreceivecentralizedprojectsupportfromOMBandtheGeneralServicesAdministration(GSA).

FederalagenciesandCongressshouldworktogethertoestablishITWCFsacrossall24ChiefFinancialOfficers(CFO)Actagenciesassoonaspossible.

OMBshouldimplementoversightactivitiestoholdagencyChiefInformationOfficers(CIOs)accountableforITprojectsuccess—particularlythosefundedthroughtheTMForITWCFs—regardingcostsavingsandmeetingoverarchingstrategicoutcomes.

ABRIEFHISTORYOFFEDERALITLEGISLATION,MANDATES,ANDPOLICY

FederalITmodernizationhasbeenperpetuallytopofmindinWashingtonDC,particularlytowardtheendofthe20thcenturywhenitbecamepatentlyclearthatITwouldbeafundamentalcomponentofgovernmentoperationsinthefuture.Yet,inthe1990s,federalITinfrastructurewasalreadywoefullyoutdated,withenterprisesoftwarealreadydecadesold—andsomeofthosesystemsarestillinplacenow.

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It'snosurprisethatlegislatorsbeganfocusinginearnestonpassinglawsthatwouldaddressthefederalgovernment’sITshortcomings.

ConsidersomeofthekeyIT-relatedlaws,programs,andmandatesaimedatfederalagenciesoverthepast30years.

Legislationinthe1990sandearly2000senactedkeyadministrativecomponentsforfundingITmodernization,includingeffortstoimprovefinancialmanagementacrossthefederalgovernmentandtheestablishmentoftheagencyCIOandFederalCIOroles.Congressalsobeganpushingfederalagenciestobroadlyadoptdigital,Internet-basedtechnologytoenhancepublicservices.

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CFOActof1990:Aimedtoimprovethefederalgovernment’soverallfinancialmanagement,includingITfundingandspending,byidentifying24CFOActagenciesthatareaccountabletoOMBfinancialoversight.

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InformationTechnologyManagementReformAct,orClinger-CohenAct,of1996:SoughttoimprovehowthefederalgovernmentmanagedITandestablishedtheroleofagencyCIOs.

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GovernmentPaperworkEliminationActof1998:Mandatedfederalagenciestobothofferelectronicsubmissionofinformation,includingutilizationofelectronicsignatures,andmaintainelectronicrecords.

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E-GovernmentAct,orE-GovAct,of2002:EstablishedtheroleoftheFederalCIOwithinOMBandspecifiedaframeworkforfederalagenciestouse“Internet-basedinformationtechnologytoenhancecitizenaccesstoGovernmentinformationandservices.”

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ThislawalsocreatedtheE-GovernmentFund,whichwouldlaterbesucceededbytheFederalCitizenServicesFund(FCSF).

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M-05-04,PoliciesforFederalAgencyPublicWebsites(December17,2004):Directedfederalagenciestocomplywithpoliciesaroundpublic-facingwebsitespertheE-GovActof2002,includinginformationquality,high-leveldesign,andsecurityprotocol.

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MorerecentlegislationandpolicyfocusonspecificpriorityareasinfederalITmodernization,includingcybersecurity,cloudmigration,mobile-firstanduser-centereddesign,andopendata,andhavebegunintroducingnew,moredirectITfundingchannelsoutsideofthetraditionalbudgetcycle.

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ExecutiveOrder13571,StreamliningServiceDeliveryandImprovingCustomerService(April27,2011):Emphasizeduseof“theInternetormobilephone”and“innovativetechnologiestoaccomplish…customerserviceactivities.”

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FederalRiskandAuthorizationManagementProgram,orFedRAMP,2011:Establishedastandardizedapproachtoassesscloudservicesforusebythefederalgovernment.

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DigitalGovernmentStrategyof2012:Attemptedtoimplementastrategicplanaroundthefederalgovernment’suseofdigitaltechnology,withobjectivesfocusingonaccessviamultipleplatforms,securesharedservices,anddata.WhilethestrategyincludesadirectiveforGSAto“identifytoolsandguidanceformeasuringperformanceandcustomersatisfactionondigitalservices,”thestrategyitselfdoesn’tspecifymetricsoroutcomes.

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FederalInformationSecurityModernizationAct,orFISMA,of2014:Originallyenactedin2002,FISMAdemonstratesthefederalgovernment’scontinuedcommitmenttocybersecuritythroughstandardsandguidelines.

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FederalInformationTechnologyAcquisitionReformAct,orFITARA,of2014:OverhauledfederalITpurchasing,includinginitiativesarounddata-centerconsolidationandreductionofduplicativeIT,andalsostrengthenedtheroleofagencyCIOsbyputtingtheminchargeofITinvestments.

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M-17-06,PoliciesforFederalAgencyPublicWebsitesandDigitalServices(November8,

2016):Providedfederalagencieswithpoliciesregardingpublic-facingwebsitesin

alignmentwiththe2012DigitalGovernmentStrategy,includingdigitalgovernanceand

informationquality;analyticsanduserfeedback;accessibilityandusability;data

transparency;mobile-friendliness;andprivacyandsecurity.

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ModernizingGovernmentTechnologyAct,orMGTAct,of2017:Supportsfederalagency

investmentinmodernizingITviathenewlycreatedTMFandauthorizesagenciesto

establishITWCFs.

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Open,Public,ElectronicandNecessaryGovernmentDataAct,orOPENGovernmentDataAct,of

2018:Expandsfederalopendatapolicybyrequiringagenciestooperateas“openby

default”regardingpublishinginformation.

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ConnectedGovernmentActof2018:Requiresallnewandredesignedfederalagency

websitestobemobilefriendly.

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21stCenturyIntegratedDigitalExperienceAct,or21stCenturyIDEA,of2018:Focuseson

improvinggovernmentcustomers’digitalexperiencewhenaccessingpublic-facingfederal

websites.

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Withinthepastyear,theBidenAdministrationhasreemphasizedattentiontothesepriorityareasinfederalITmodernizationthroughahandfulofexecutiveorders,namelywithrespecttocybersecurityandcustomerexperience.

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ExecutiveOrder14028,ImprovingtheNation’sCybersecurity(May12,2021):Chargesfederalagencieswithenhancingcybersecurity,includingsecurecloudsolutions,zero-trustarchitecture,andmultifactorauthentication,aswellassoftwaresupplychainintegrity.

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ExecutiveOrder14058,TransformingFederalCustomerExperienceandServiceDeliverytoRebuildTrustinGovernment(December13,2021):Directs17federalagenciestoputcustomersatthecenterofservicedelivery,encouraginguser-centereddesignregardingdigitaltechnology.

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Insummary,thehistoryofITlegislationoverthepast30yearsshowsanawarenessofutilizingemergingtechnologytoimprovegovernmentservicesandmodernizefederalIToverall,whilealsoinstitutinggreateraccountabilityandoversightoverfederalIT.However,whilemanyoftheselawsandpolicieshavestrengthenedITleadershiproles,theyhavenotprovidedclear-enoughguidancetoagencyCIOsandotherITleadersregardinghowtechnologyshoulddirectlysupportmissionandcustomeroutcomesmeasuredacrossthewholeofgovernment.Inotherwords,despiteshort-livedeffortssuchastheDigitalGovernmentStrategyof2012,thereisnoactive,sustainablefederalITstrategythatofferscross-cutting,inter-agencyguidancetowardspecificoutcomes.Lastly,forfederalagenciestocomplywithlawsandmeetmandates—bothofwhicharetypicallyunfunded—orgenerallyperformanyfunction,theyneedmoney.

OVERVIEWOFFEDERALITFUNDINGCHANNELS

TherearefewwaysfederalagenciescanacquiremoneytofundITinitiatives,andtheyallhavedownsidesintacklingtheongoing,monumentaltaskofITmodernization.ThemostcommonvehiclethatoffersthegreatestpoolofmoneyisCongressionalappropriation.However,thebudgetcycletakestime,currentlyofferingfundingforinitiativesrequesteduptotwoyearsago.Otherchannelsprovideaccesstofundsoutsidethebudgetcyclebuthavefarlessmoneytoofferandarecurrentlyinaccessibletomostfederalagencies.

CongressionalAppropriation

Congressisresponsibleforbothauthorizingfederalprogramstooperateandappropriatingfundstosupportthoseprograms.

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MoneythatiseventuallyspentonITmayberolledintoanappropriationsbillforanoverarchingprogram(e.g.,$1billionfortheDepartmentofHealthandHumanServicesforthenewAdvancedResearchProjectsAgencyforHealth,orARPA-H)ormaybespecificallyearmarkedforIT(e.g.,$2.5billionfortheVeteransElectronicHealthRecordsystem).

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Thecongressionalbudgetprocessiscomplexandslow.

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Foragivenfiscalyear,OMBstartsworkingonthebudgetinthespringorsummeroftheprioryear,andagenciesmaynothavefundsforaparticularprogramorinitiativeforanothertwoyears.Congresspassedthe$1.5trillionomnibusspendingbillinMarch2022forfiscalyear(FY)2022thatstartedOctober1,2021,afterpassingfourcontinuingresolutions(CRs)toprovideshort-termfundingatFY2021levels.

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TheseCRsanddelayedbudgettimelinescanimpacttheprogressoffederalITmodernizationbypreventingprocurement,delayinghiring,andrequiringagenciestoinvestinold,existingITratherthanmovingforwardwithnewinitiatives.

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Indeed,thefederalgovernmentinvestsnearly80percentoftheapproximately$80billionspentannuallyinfederalITonO&Mactivitiesthatfocusprimarilyonmaintainingexistinglegacyapplications.Giventhat

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congressionalappropriationisbyfarthemostcommonmethodofsecuringITfunding,thefactthatit’sbothtooslowandoverinvestedinO&MimpactsthepaceoffederalITmodernization.

ITWorkingCapitalFunds

Otherfundingchannelscanofferagenciesaccesstopotentiallymillionsofdollarsoutsidethecongressionalbudgetcycle.TheMGTActauthorizedeachofthefederalagencieswithCFOs(pertheCFOActof1990)toestablishITWCFsthatcanonlybeusedoncost-savingITmodernizationefforts,suchasimprovingorreplacinglegacysystems,enhancingcybersecurity,andtransitioningtocloudcomputing.Asabroadconcept,WCFsaretypicallyfundedthroughfeesorrevenue-generatingactivitieswiththegoaltobeaself-sustainingsourceoffundingtopayforotheragencyneeds.

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TheideaisthatagenciescouldtransferdiscretionaryfundstotheseITWCFsfordesignatedITinitiatives,particularlythosethatrequiremultiyearcashinjections,asmanylarge-scaleprojectsdo.Thisisparticularlyhelpfulasanalternativetotraditionalappropriation,which,asthepriorsectionofthisreportexplains,isslow,oftendelayed,andrestrictiveinhowagenciescanspendfortheirITinitiatives.

EstablishingagencyITWCFshasproveneasiersaidthandoneasCongresshasonlyapproved twoasofApril2022—oneattheSmallBusinessAdministration(SBA)andoneattheOfficeofPersonnelManagement—withtheDepartmentofLabor,theU.S.AgencyforInternationalDevelopment,andtheDepartmentoftheTreasuryrequestingITWCFsfor2023.

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PeritsFY2023budgetrequest,SBAexpectstohaveover$3millioninitsITWCF.

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ManyagencieshaveexistinggeneralWCFsthatcanbeleveragedforITprojects,buttherequirementsforhowtheycantransfermoneyandwhentheycanspendit(i.e.,usingallthefundsinoneyearoracrossmultipleyears)varywidely.

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ThesegeneralWCFswerenotdesignedtoaccomplishthekindof ITmodernizationactivitiesspecifiedforITWCFsintheMGTAct,norcantheybeusedto“reimburseamountstransferredtotheagencyfromtheTechnologyModernizationFund”likethedesignatedITWCFscan.

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TechnologyModernizationFund

TheMGTActalsoestablishedtheTMF,agovernment-widerevolvingfunddesignedtofocusmoreonbroader,collaborativefederalITinitiatives.ChairedbytheFederalCIOfromOMBandwithpermanentmembersfromGSAandtheDepartmentofHomelandSecurity’sCybersecurityandInfrastructureSecurityAgency,keyareasoffocusfortheTMFincludemodernizinghigh-prioritysystems,cybersecurity,public-facingdigitalsystems,andcross-governmentservices.CongressoriginallyauthorizedtheTMFforupto$250millionforFYs2018and2019,butthefundonlyreceived$175millionoveritsfirstthreeyears(2018–2020).Itdidreceiveasizeable$1billioncashinjectionfromtheARPin2021,butthatwasinresponsetoCOVID-19andwasfarlessthanthe$9billiontheBidenadministrationbelievednecessarytoachievelarge-scaleITmodernizationacrossthefederalgovernment.

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TheBidenadministrationalsoaskedfor$500millionfortheTMFintheFY2022budgetrequest,butthelatestomnibusspendingbillprovidednoadditionalmoneyforthefund.

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TheTMFboardemploysatwo-stepprocesstoevaluateandapproveproposedprojects,withGSAandOMBsettingthetermsofrepayment.Repaymenttypicallyaimstorecoupfullcostswithinfiveyears—amuchlongertimeframethanmostagency-levelWCFs.However,aspartoftheARP,theTMFbeganaccommodatingproposalsthatrequiregreaterrepaymentflexibilityiftheyalignwiththeboard’spriorities.Repaymentplansfallunderfullrepayment,partialrepaymentat25

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percent,50percent,or75percentofthefundinglevel,andminimalrepayment,whichisreservedfor“proposalsthattacklethemosturgentITcybersecurityandmodernizationproblemsfacingourgovernment,andwherecostsavingsarenoteasilyrealizedbytheproposingagency.”

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Asonewouldexpect,theTMFisverypopularwithagencyITleaders,and,asaresultisnotviewedasafullyreliablefundingsourceformostfederalagencies.

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RayleneYung,executivedirectoroftheTMF,statedinMarch2022thatthemoneytheTMFhadreceivedthusfarwasn’tnearlyenoughtomanage“thefloodofrequests”fromfederalagencies.

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Asofthattime,theTMFhadreceivedover130proposalsworthabout$2.5billionfrommorethan40federalagencies.

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WhiletheITWCFsandtheTMFofferoff-budgetfundingsourcesforagencies,mostagenciesarenotreadilyaccessingeitherofthem.Furthermore,themoneyavailablefromtheTMFistoolittletocovertheconsiderablepricetagsthatcomewithlarge-scaleITmodernizationefforts.

OtherITFundingChannels

GSAestablishedtheFCSFtodrive“innovationingovernmentthroughinteragencyprogramstoenhancethefederalgovernment’sabilitytodobusinesselectronicallyandtodisseminateFederalgovernmentinformationtothepublic.”

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TheFCSFreceivesyearlyappropriations,includingthesame$55millionasFY2021fromthelatestspendingbill.

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GSAusesFCSFmoneyoninitiativesthatarepublicfacingorgreatlyimpactcitizenservicessuchas(asecure,singlesign-onserviceusedbythepublictoaccessgovernmentservicesacrossmultipleparticipatingagencies)andtheFedRAMP(astandardizedapproachtoassesscloudservicesforusebythefederalgovernment).

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TheAcquisitionServicesFund(ASF)isa“full-cost-recovery”revolvingfundthatdoesnotreceiveannualappropriationsfromCongressbutratherrecoverscostsbychargingfeestofederalagenciesfortheservicesandcommoditiesitprovides.TheASFincludestheacquisitionofITsolutionsaswellasmotorvehicles,supplies,andavarietyofothergoodsandservicesforfederalagencies.

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InFY2020,theASFcontainedover$20billionwithmost(68percent)oftherevenuegeneratedfromtheDepartmentofDefense.

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BoththeASFandFCSFfundpartoftheactivitiesofTechnologyTransformationServices(TTS),whichisGSA’sdepartmentthat“existstodesignanddeliveradigitalgovernmentwithandfortheAmericanpeople”andincludessalaryandstaffexpensesfor18F,GSA’steamoftechnologiststhathelpotheragencieswithtechnicalfixesandITdevelopment.

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Similarly,theInformationTechnologyOversightandReform(ITOR)fund—anaccountofapproximately$240millionmanagedbyOMBtoinvestinITmonitoringactivities—helpsfundstaffingfortheU.S.DigitalService,thefederalgovernment’srotatingtacticaltechteamthatsupportsITmodernizationefforts.

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WhileGSAandOMBuseFCSFandITORfundsforITmodernizationeffortsandstaffingthatfrequentlyimpactmultiplefederalagencies,themoneyitselfisnotavailableforusebymostfederalagenciesfortheirownITinitiatives.Similarly,boththeFCSFandASFareop