Reports to Congress
Under the Paperwork Reduction Act of 1995
I.
GOVERNMENT WIDE SUMMARY OF INFORMATION TECHNOLOGY OBLIGATIONS
The
President's budget for the Federal government for FY 1998 was the
first budget prepared since the passage of the Information Technology
Management Reform Act of 1997 (ITMRA), Public Law 104106
(the ClingerCohen Act). The budget reflected the extensive
information technology(1) (IT) activities
of the Federal agencies since the Act's passage, and included a
discussion of specific ways in which Federal agencies are adopting
the best private sector practices in using technology. In particular,
six of these practices were highlighted: reengineering before automating;
acquiring systems in phases; buying off the shelf technology; consolidating
and outsourcing; monitoring progress with performance-based management
systems; and integrating information across agencies. Also included
was a listing of the program performance benefits from proposed
major information technology investments.(2)
This chapter supplements that report by analyzing in detail the
components of the Federal government's $27 billion information technology
budget.
The
analysis consolidates data supplied by Executive Branch agencies
in response to OMB Circular No. A11, Preparation and Submission
of Budget Estimates, Section 43, Data on Acquisition, Operation,
and Use of Information Technology. The agency responses reported
spending and personnel resources allocated to IT activities for
FY 1996 through FY 1998.(3)
Agencies that obligated more than $50 million in any of the years
PY, CY, or BY (past year, current year, or budget year, respectively)
for IT activities are required to submit a report on obligations
for information technology for the agency as a whole.
Information technology expenditures make up a small but meaningful portion of
the Federal(4) budget. The IT portion
of the budget rose from 1.2% in FY 1982 to 1.77% in 1993. After
a drop to 1.61% in FY 1994, the percentage peaked at 1.81% of the
Federal budget in FY 96. From 1.81% in FY 96, the percentage is
expected to fall to 1.76% in FY 97 and 1.71% in FY 98.
Obligations
for IT activities grew in nominal dollars from $14.3 billion in
FY 1986 to $24.97 billion in FY 1993. After a downturn in 1994 to
$23.50 billion, IT obligations rose in FY 95 to $26.16 billion and
again in FY 96 to $28.27 billion. Projected levels for 1997 and
1998 show a leveling in nominal dollars at $28.70 and $28.97 billion,
respectively. In constant dollars there recently has been a downward
trend in IT obligations, and the 1998 level is expected to be the
lowest since 1992. The FY 1998 numbers represent the President's
request and are subject to the enactment of appropriations by Congress.
In
real terms, total IT obligations grew an average of 2.47% annually
between FY 1988 and 1998. Exhibit 1 displays the Federal IT obligations
from Fiscal Years 1982 through 1998 in nominal dollars and constant
(1992) dollars. Appendix 3 provides
a summary of the changes in reporting basis between this year's
and previous years' data.
As
shown in Exhibit 2, IT obligations as a proportion of total Federal
budget outlays have fluctuated between 1.6% and 1.7% since 1991.
The total Federal Budget includes all discretionary spending, mandatory
programs (e.g., deposit insurance, Social Security, and Medicaid/Medicare),
and net interest payments on Federal debt.
Similarly,
as shown in Exhibit 2, IT expenditures, as a percentage of the Federal
operating budget,(5) have grown from
4.37% in FY 1988 to 6.2% in FY 1996. It is projected to grow slightly
to 6.42% in FY 1998. The operating budget estimates are based on
total expenditures for purchases of goods and services by the Federal
sector, as published in the Federal Transactions in the National
Income and Product Accounts (NIPA) or as promulgated by OMB's
Budget Analysis and Systems Division.(6)
Exhibit
3 presents the relationship of the Department of Defense (DoD) portion
to the nonDoD portion of the Federal IT spending. The relatively
constant DoD spending since FY 1989 is attributable to several factors,
including controlled spending under the Corporate Information Management
(CIM) initiative and streamlining and downsizing by the DoD. On
the other hand, the growth in nonDefense spending has been
a result of civilian agencies incorporating new technologies into
their business processes.
The
Near Term, 19961998
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Detailed
tables showing the agencies' IT obligations in each of the Fiscal
Years 19961998 appear at the end of this chapter. Table 1
summarizes the total Federal IT budget for these three years.
Table 1 shows that support services make up the largest part of the
Federal government's IT budget.(7)
This is in keeping with the Federal government's emphasis on use of
the private sector to perform those functions not purely Governmental
in nature. Support Services is the only category with expected significant
increases in expenditures.(8)
Federal employee workyears decrease 4.01 percent during the
period. Equipment (noncapital) leases and purchases and (capital)
software purchase are also expected to decline substantially. For
the other categories, the distribution of the IT budget remains fairly
consistent from year to year.
Highlights
of Increases
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This
section highlights the seven agencies which comprised the bulk of
the increases in IT spending from FY 1997 to FY 1998 (see Table
2).(9) The Joint Logistics
System Center and the Department of Energy are the only new organizations
on the list; the other five were on the Top 6 Net Gainers list in
FY 96. The total IT budget growth for agencies experiencing funding
increases in this period is just over $646 million, down from the
$2.02 billion increase in the previous year. A total of 16 agencies
anticipate gains, while 11 agencies expected to see reductions in
their IT expenditures totaling $320.8 million, resulting in a net
increase (total agency increases minus total agency decreases) in
Governmentwide funding of $325.6 million. Together, the total
IT budgets of the seven agencies with the largest increases account
for approximately 32% of the Government-wide IT budget in FY 1998.
Collectively, these agencies received $500.3 million in increases,
representing 77.4% of the $646.4 million total increase for all
agencies experiencing funding growth between FY 1997 and FY 1998.
Department of Defense: Joint Logistics System Center. The $85
million FY 1998 increase in the Joint Logistics Systems Center IT
budget primarily funds currently operational Military Service and
Defense Logistics Agency legacy logistics automated information
systems (AISs) that support the depot maintenance and supply management
business areas. The FY 1998 funding will be used to begin modernization
of these systems with the ultimate goal of converting them to a
seamless logistics system in a shared data environment as directed
by the Deputy Under Secretary of Defense for Logistics (DUSD/L).
The DUSD/L corporate strategy is to enable interoperability by bringing
existing legacy systems into a shared data environment based on
the DoD Joint Technical Architecture. This is a one year increase
-- after FY 1998, the responsibility to fund the legacy systems
will transition to the Services.
Department
of Transportation. DOT is requesting an increase of $83 million
in FY 1998 to a total of $1,801 million compared to FY 1997 which
had a total of $1,718 million. Key increases are for planned purchases
of equipment ($41 million) and software ($24 million), services
($7 million), and commercial support services ($7 million).
In
order to maintain and enhance transportation safety, budget increases
will fund purchases of hardware and software. Most of the increases
will support the Federal Aviation Administration's National Airspace
System (NAS) initiatives -- e.g., the transition to a satellitebased
communication, navigation, and surveillance system and implementation
of free flight concepts of operation. These initiatives are designed
to meet the domestic aviation industry's demands for more responsive
and cost effective operation of NAS.
Department
of Defense: Air Force. The Air Force is targeting future readiness
by implementing revolutionary longrange IT planning that addresses
process improvement and systematic modernization. This modernization
directly leads to capabilities necessary to support all mission
requirements and ensures that Air Force IT systems will be secure,
interoperable, reliable, and available. Although IT funding in the
FY 1998 budget increases only 3.14% over FY 1997 (less than 1% over
expected inflation), there are notable increases in a few specific
areas. The Air Force will dedicate increased resources to supporting
and enhancing their core communications and computing information
infrastructure. Spending in this area will increase about $54 million
between FY 1997 and FY 1998. In addition, funding for procurement
and contract administration systems will grow by nearly $22 million,
as the Air Force begins to field the Standard Procurement System
and continues upgrades for base contracting systems.
Department
of Commerce. The increase in the Department of Commerce's IT
obligations from 1997 to 1998 is attributed to major systems initiatives
within the National Oceanic and Atmospheric Administration (NOAA)
and the Bureau of the Census. NOAA will be making additional investments
associated with the national deployment of the Advanced Weather
Interactive Processing System that is central to the modernization
of the National Weather Service, and will be acquiring equipment
and related support services for the ground systems for new geostationary
satellites. The Bureau of the Census will be acquiring increased
IT resources in preparation for the 2000 Decennial Census.
Department
of Energy. At $1.53 billion, the Department of Energy's FY
1997 estimate for IT remained roughly constant over the prior year's
submission, with an increase of less than 5% ($67 million). It is
approximately 9% of the Department's total budget. The increase
is mostly attributable to planned equipment purchases. These purchases
are for major scientific programs, namely, the Accelerated Strategic
Computing Initiative (ASCI) and High Performance Computing and Communications.
In addition, some of the increase is for servers to support Internet
and clientserver computing activities.
Department
of Agriculture. The increase in IT related spending of 5.25%
over FY 1997 for USDA reflects the increased reliance on IT to facilitate
program delivery, even as USDA continues to downsize. New and integrated
systems, to support field service activities in three major agencies,
are being designed in response to programmatic changes contained
in the 1996 Field Automation's Information Management Initiative
Act. The Department also plans to address the new millennium problem.
Some of the major IT efforts going forward in the 1998 budget are:
The Rural Developments Dedicated Loan Origination and Servicing
System, the Food Safety Inspection Service's FAIM initiative, the
National Agricultural Statistics Service's National Census of Agriculture,
the Food and Consumer Services Food Stamp Program modernization
through electronic transfer, the Forest Service's upgrade of its
technology infrastructure, and the upgrade of the USDA's core financial
system.
Department
of Education. In the President's budget request for the Department
of Education, total obligations for IT projects show a net increase
of $50 million over the current fiscal year. Of that total increase,
$42.9 billion is in support services, primarily for student financial
aid management. Increased loan servicing costs for Federal Direct
Student Loans account for an overwhelmingly large part of the increase
in ADP support services. The Direct Loan program has grown steadily
over the past several years; large numbers of loans are now beginning
to enter repayment, resulting in increased servicing costs. Additionally,
a small portion of the increase in the IT budget is attributable
to the Department's Year 2000 and ledger account reconciliation
initiatives.
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The term "information technology" as used here is defined
in ITMRA, Division E, Section 5002. It means any equipment or
interconnected system or subsystem of equipment, that is used
in the automatic acquisition, storage, manipulation, management,
movement, control, display, switching, interchange, transmission,
or reception of data or information by an executive agency.
This includes computers, ancillary equipment, software, firmware
and similar procedures, services (including support services),
and related resources.
-
Budget of the United States Government, Fiscal Year
1998, pages 4146.
-
For definitions of cost categories reported under Section
43 of OMB Circular No. A11, Preparation and Submission
of Budget Estimates (1996), see Appendix
1.
-
Appendix 2 provides
a glossary of reporting Federal agencies, their abbreviations
and common names as used in this report.
-
The operating budget is the total Federal Budget excluding
transfer payments, mandatory spending programs and debt service.
-
National Income and Product Account Presentation, table
14.1, pages 254256, Budget of the United States Government:
Fiscal Year 1998 -- Historical Tables.
-
See Appendix 1 for definition
of support services.
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Governmentwide totals do not include intragovernmental
transfers (payments and collections), which in theory should
net to zero. In practice, many agencies currently have difficulty
properly accounting for and reporting on intragovernmental
transfers. These difficulties, along with differences in how
agencies classify IT costs, result in a gap between reporting
intragovernmental IT payments and intragovernmental
IT collections. In FY 1997, reported intragovernmental
IT collections were $2,042,084 in excess of $5,641,716 in reported
intragovernmental IT payments.
-
The increases in Table 2 use the agency IT obligation levels
including intragovernmental transfers. Intragovernmental
transfers are included in these individual agency totals because
each individual agency may have intragovernmental transfers
not netting to zero within that agency.
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