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The Senate Missed a Chance to Pass the IT Modernization Act

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By Thomas Gann, director of Global Public Sector for Intel

As IT innovation has accelerated and technology has assumed a dominant place in our lives and economy, we have invested too little in modernizing our federal IT systems.  According to the Office of Management and Budget (OMB), of the $82 billion in federal IT spending planned for fiscal year (FY) 2017, approximately 78 percent ($63 billion) is classified as “legacy” IT spending.  Most of this spending is for maintaining and upgrading the current IT infrastructure.  Far too many of these federal IT systems are out of date, inefficient, expensive to maintain and vulnerable to cybersecurity attacks.

On September 22, the House of Representatives took action to address these shortcomings in the federal government’s IT infrastructure by passing the Modernizing Government Technology Act.   The bill authorizes a $3.1 billion Information Technology Modernization Fund, a program that would update government IT systems and transform cybersecurity management. The fund would enable the retirement, replacement and modernization of legacy IT that is difficult to secure and expensive to maintain.

The Senate had an opportunity to pass this important piece of legislation prior to its expected adjournment on December 9, and then it most likely would be signed into law this year. Leaders of the Senate Homeland Security and Governmental Affairs Committee worked hard to fast-track this bill to the Senate floor. Key associations, including the US Chamber of Commerce, Tech Net, and the Public Sector arm of the Information Technology Industry Council, ITAP’s, all weighed in with strong letters of support for the bill.   But during the final hours, momentum died down as the Congressional Budget Office (CBO) estimated that implementing this legislation would cost $9 billion over the 2017-2021 period.  Members of the Senate Appropriations Committee raised concerns about the overall cost of the program and the way the Information Technology Modernization Fund would operate.  These members felt that the program would cost too much money and disliked the fact that the Modernization Fund would be recapitalized by federal CIO’s at the end of each government fiscal year by eliminating or reducing investment in inefficient IT programs.

One of the great weaknesses of the CBO scoring methodology is that it uses a static model – only the costs of a new program are estimated.  Long-term benefits from investments such as cost savings are excluded from CBO’s static models.  Had CBO used a dynamic model, something pro-growth legislators have long advocated, the cost savings of investments in modern IT systems would have been calculated into the final CBO estimates.  Furthermore, giving government agencies, CIOs in particular, increased authority to manage their IT budgets in cost-efficient ways to enable the long term maximization of scarce tax payer dollars is precisely the type of innovation our government needs to meet vital mission goals.

There needs to be a transformation in the way federal IT funds are used to drive real change.  Too much money is currently being spent on what budget experts call “O and M,” on just basic operations and maintenance.  This leads to just “putting a coat of paint” on old infrastructure and systems. To drive real change, a larger share of the IT budget should be invested into high leverage projects such as software-code modernization that can support the update to newer solutions that are more secure and more efficient than legacy systems.  Innovative security approaches can be fielded with project funding that supports both modernization of the infrastructure and deployment of modern security capabilities to that infrastructure, thereby providing security capabilities at the hardware, firmware and software layers. For instance, cloud security services can be used to secure new cloud-deployed workloads, or software-defined networking security capabilities can be leveraged to better secure legacy network and application back-ends.

In conclusion, I strongly urge the Senate to pass the Modernizing Government Technology Act as soon as possible, when it reconvenes in the New Year.  Giving the new President the opportunity to sign this much needed legislation into law will also enable OMB to put additional teeth in the IT modernization guidelines that it has tasked all federal agencies to meet.  By taking action early in 2017, policy makers can help start the new year in a truly bipartisan way on an issue -- IT Modernization -- on which everyone should be able to agree.