Commentary: Rich Beutel on Federal IT Acquisition Dysfunction

Editor’s Note: Richard Beutel is the original author and legislative manager for the Federal IT Acquisition Reform Act (FITARA), a landmark piece of legislation signed into law in December 2014. He is also the former lead acquisition and procurement policy counsel for House Oversight and Government Reform Committee Chairman Rep. Darrell Issa, R-Calif. This column first ran as a blog post on Beutel’s corporate website, www.cyrrusanalytics.com. It has been edited here for length and style.

By Richard Beutelalt

Most people who work in technology are familiar with Moore’s Law—the principle formulated by Gordon Moore of Intel that the power and density of a microprocessor rate would double every two years.

When people mention Moore’s Law, they rarely notice just how extraordinary this observation really is. Just to put it into perspective, it’s been said that if you were to apply Moore’s Law to the automotive industry, a Volkswagen would now be capable of driving at 300,000 mph and cost a dime.

Yet despite Moore’s Law and its consequences, the government acquires and deploys complex IT systems pretty much the same way it acquires cars and office chairs. It makes no sense. Henry Ford would be pleased with our current IT acquisition system; Steve Jobs, not so much.

At a recent forum, retired Air Force Gen. Greg Touhill illustrated the problems of applying an antiquated acquisition system to federal IT. Similar to comparing dog years to human years, “Touhill’s Theorem” postulates that if you accept the life span of a computer system to be three years and the average life span of a human to be 75 years, then one human year should equal 25 computer years. Touhill’s Theorem illustrates the insanity of acquiring IT in the same fashion we acquire other commodities and goods.

The universe of cyberspace has fundamentally different characteristics, so it is not a leap of imagination to suggest that it should be acquired and deployed in a fundamentally different fashion. Unfortunately, efforts to reform IT acquisition and accelerate the transition to cloud computing has a record unsullied by success. Seventeen years following the signing of the seminal Clinger-Cohen legislation that laid the foundation for the federal government’s acquisition and management of IT, and 10 years after the E-Government Act established a Federal Chief Information Officer, program failure rates and cost overruns still plague 72 percent to 80 percent of large government IT programs. Some have estimated the cost to the taxpayer to be as high as $20 billion each year.

The massive fragmentation of IT acquisition, the lack of consolidation of certain processes, the internal competition between organizations, and the failure of the government to create an overarching IT strategy are the flaws at the heart of a governmentwide dysfunction that disrupts IT procurement. Until now, there has been little critical assessment of the current fractured procurement structure that hampers the government’s ability to invest competently in IT.

altAlthough cloud computing is not a new concept, today’s cloud computing is far more powerful and useful than previous generations of remote computing. Government adoption, however, remains slow. Current research shows that about half of federal agencies have adopted cloud computing in some way—21 percent are already moving forward with cloud adoption and 29 percent are in the early stages.

Recognizing the enormous potential benefits of cloud, former Federal CIO Vivek Kundra released the Federal Cloud Computing Strategy (FCCS) in 2011. According to the FCCS, “[c]loud computing has the potential to play a major part in addressing…inefficiencies and improving the delivery of government services.” For the Federal government, “cloud computing holds tremendous potential to deliver public value by increasing operational efficiency and responding faster to constituent needs.”

The FCCS was a visionary document outlining a clear road map for the government’s adoption of transformative new technology. But what the FCCS failed to do was to outline a clear path forward through the current IT acquisition maze to support the many benefits of cloud adoption by the government.

This is critical, because the cloud ecosystem has unique attributes. It is a perishable item with a continuously accelerating life cycle. Acquisition and deployment methods spanning months virtually guarantee the eventual deployment of solutions that are obsolete.

Furthermore, even assuming an expedited acquisition and deployment approach, the cumbersome and time-limited nature of the current appropriations process means that program funding will occur late in the process, in artificially defined increments and subject to strict “color of money” time constraints.

Confronted with these issues and the challenges posed by federal chief information officers who lacked any real authority, the 113th Congress undertook a major initiative to address IT reform. The House Committee on Oversight and Government Reform developed a legislative package called the Federal IT Acquisition Reform Act (FITARA) that included several fundamental changes to the IT acquisition process.

FITARA focused on two key areas. First, fundamental reform was needed to give the CIOs at major Federal agencies budget authority over IT programs. CIOs had been unable to manage their agency IT deployments because the law establising the CIO position did not explicitly identify Federal CIOs as having any budgetary control or authority over IT resources. In federal agencies, the missions, responsibilities, and powers bestowed on CIOs both by law and in practice are far less clear than in the private sector, where the CIO often serves as a senior decision-maker, providing leadership and direction for information resource development, procurement, and management.

Second, the cumbersome, time-constrained appropriations process is fundamentally out of sync with the push to agile IT development practices and Dev Ops-focused IT deployments. The fiscal law constraints surrounding the process of appropriating and obligating resources to Federal agencies posed a significant impediment to the timely and effective rollout of modern IT systems. Broader, more flexible budget authorities were desperately needed to accelerate cloud adoption across the federal government.

The good news is that empowerment of CIOs across the Federal government was successfully enacted in the final version of FITARA. But the second major problem—the disconnect between the appropriations process and fiscal law constraints on IT acquisition and deployment—never made it through the Senate. Provisions in the original House version of FITARA included the establishment of a revolving capital fund structure to address the need for broader budget flexibilities.

Unfortunately, due to the controversial history of revolving capital funds, these provisions were not included in the final version of FITARA that was signed into law.

As a result, this same impediment continues to throttle widespread and timely cloud adoption across the Federal government. Until this issue is squarely addressed, and the problems associated with the current appropriations/technology adoption mismatch are resolved, the benefits and promise of cloud will remain on the slow track for the Federal government.

Richard Beutel
About Richard Beutel
Richard Beutel is currently the Principal of Cyrrus Analytics, one of Washington’s premier boutique government market strategy and legislative advisory firms. He is the former lead acquisition and procurement policy counsel for former Chairman Darrell Issa of the House Oversight and Government Reform Committee. Rich wrote and managed the Federal IT Acquisition Reform Act – FITARA – which was signed into law as part of the FY2015 National Defense Authorization Act.
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