What’s Missing From FITARA: Agencies Need Revolving IT Funds

Why can’t the government successfully complete complex IT projects? This question persists whether one is talking about Healthcare.gov or the recent data breaches at the Office of Personnel Management.

The primary reason is the cumbersome way the government funds IT development. With agencies subsisting from one Continuing Resolution (CR) to the next, intermittent funding wreaks havoc on IT planning. But even if Congress consistently enacted the 13 appropriations bills needed to fund government operations every year, funding would still be a problem. That’s because funds are usually allocated in one-year increments.

The next reason government IT programs flail and fail is because agency CIOs don’t have full control and oversight of their agencies’ IT spending.

That’s why we created the Federal IT Acquisition Reform Act (FITARA). I drafted the original legislation for Reps. Darrell Issa (R-Calif.) and Gerry Connolly (D-Va.) as senior counsel on acquisition for the House Oversight and Government Reform Committee.

Now the White House is busy implementing FITARA. And with the first implementation deadline looming Aug. 15, this is a good time to take stock of what FITARA does – and doesn’t do.

The Aug. 11 FITARA Forum, featuring Federal CIO Tony Scott and his top policy and strategy deputies, is a good place to get your bearings. MeriTalk founder Steve O’Keeffe has pulled together Federal CIO Tony Scott, leading policy and strategy makers at OMB, a Federal CIO leadership panel, GAO IT expert Dave Powner and myself to cover FITARA from conception to implementation and the outlook for what’s ahead.

On that front, the fact is that the work we began is not yet finished.

One key FITARA provision that did not survive the legislative process is a funding mechanism for emerging technologies like cloud computing.

This provision would have established or enabled the use of existing Working Capital Funds to be leveraged for Federal agency expansion of cloud computing. The language mirrored language establishing similar funds in other agencies, such as at the U.S. General Services Administration (GSA), and would have specified that such funds could preserve funding for cloud service transitions for up to five years per appropriation.

This type of budget flexibility is just what agencies need to successfully migrate to innovative and more flexible models of IT to enable the Federal government to pay for IT that it actually uses, which could result in massive cost savings. It would allow agencies to renew the government’s commitment to the “cloud first” initiative.

Failing to include this provision undermines FITARA.

Vivek Kundra, our first Federal CIO, made the case for working capital funds as far back as 2010.

“The rapid pace of technological change does not match well with the Federal government’s budget formulation and execution processes,” Kundra said then. “To deploy IT successfully, Federal agencies need the ability to make final decisions on technology solutions at the point of execution, not years in advance. Agencies need the flexibility to move funding between investments or projects within their portfolio to respond to changes in needs and available solutions.”

Kundra proposed a “Revolving Capital Fund” that could be rolled over and replenished in a much more flexible manner than relying on CRs or yearly appropriations to compensate for the misalignment between IT program management and the need for detailed budget planning.

Generally, Intra-governmental Revolving Funds (IRFs), including Revolving Capital Funds and Working Capital Funds “do not receive appropriations directly,” according to GAO. “Instead, they are accounts that may receive reimbursements and advances from other Federal accounts. …The use of IRFs to fund consolidated or shared services allows agencies to benefit from economies of scale or take advantage of specialized expertise that they may not have…”

Agencies have used Revolving Funds for years. They are widely recognized as a key resource to implement shared services, such as IT, that are common across agencies. The Justice Department, Census Bureau, and Commerce Department all use Revolving Capital Funds today.

Congress should move forward now to expand FITARA, and give agencies the ability to leverage revolving funds in order to move more quickly to the cloud.

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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