Fed Cloud Spending Made Murky by Confusing ‘Other’ Category

federal cloud

The word “other” and other vague terms have infiltrated the naming convention of Federal spending categories and could wreak havoc on project budgets, according to one International Data Corporation (IDC) official. A high potential exists for agencies to misallocate or overspend money based on the ambiguous label, he notes.

IDC published a blog previewing the release of a research document produced by the company called “Perspective: Federal Cloud Growth Is Substantial Through 2019, but Provider Landscape Is in Flux.” The author, IDC Government Insights Research Director Shawn P. McCarthy, seems to lay blame at the feet of the Federal agencies for not clearly defining the target for purchases.

The following is a quote of McCarthy’s quick cheat sheet on how to properly track Federal spending:

1) Follow the money.
2) Understand the official definition of what is being purchased.
3) Note the location of where the money has been spent.

“Other” does not always enable a Cloud Service Provider or agency to do this well. For example, the “other” category, perhaps allotted for miscellaneous items, oftentimes eats up funds meant for more clearly defined categories.

The blog post pulls specific data from a January 2016 Government Accountability Office (GAO) report, which examined terms defined by the Office of Management and Budget. According to the post, OMB does not always adhere to the proper definition standards. While, according to the GAO report, “most definitions adhered to leading practices derived from international standards for formulating data definitions,” about 30 percent of the OMB  procurement data GAO examined did not meet proper definition standards.

To track and, if necessary, corral cloud spending, agencies need to use a more consistent naming convention, according to McCarthy. “Other” leaves things up to chance. The potential for “other” to creep in and eat up funds meant for other portions of a project is too great.

As an example, McCarthy points to the Federal Information Security Management Act, which precisely specifies performance and security requirements that vendors must adhere to. A Cloud Service Provider has to tailor, test, and certify its products and services to these requirements. It often tailors many of those modifications to the size of the government project. So when the “other” category takes over too much of a spending budget, overruns can occur.

Perhaps the solution to this problem is putting together a Federal group to come up with a style guide and using terms within that guide across agencies. Certainly using “place of performance” terms that clearly define where work will happen is a good start. Maybe a little work now can help save a lot of time and money on “other” Federal projects.

 

 

 

 

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