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FCW : June 30, 2014
Commentary | ALAN P. BALUTIS At a recent hearing of the Senate Homeland Security and Govern- mental Affairs Committee, Fed- eral CIO Steven VanRoekel said improvements in IT portfolio management and cost oversight have yielded more than $2.5 billion in identi ed cost savings and $1.9 billion in realized savings. Speci - cally, the PortfolioStat process and consolidation of commodity IT drove the ef ciencies. Barely was VanRoekel nished with this opening gambit when the stakes were raised. "The target should be much higher than that," argued David Powner, director of IT management issues at the Gov- ernment Accountability Of ce. He went on to argue that "based on our work, there are over 200 Port- folioStat initiatives that agencies are working on to eliminate at least $5.5 billion in duplicative savings." So GAO had the high bid, for two weeks. Then doubling down --- and doubling down again --- came a study by MeriTalk based on a survey of 300 federal net- work managers. According to the study s sponsor, the U.S. govern- ment has the potential to achieve $11.2 billion in annual savings by taking full advantage of data cen- ter consolidation, virtualization, cloud computing, remote access and infrastructure diversi cation. If network managers were able to signi cantly increase network speed, the survey further claims, agencies could save an additional $11 billion in one year. So if agencies were to fully implement those ve initiatives, they could save more than one- quarter of the government s annual $80 billion IT budget. Coincidentally or not, it s the $20 billion-plus gure I ve heard most often in conversations with House and Senate members and staff. But over the years, I ve come to worry whenever cost savings are claimed. And here is why: Economy and ef ciency are major tenets of traditional public administration doctrine. One hears over and over about a government that works better and costs less or about the need to do more with less. But as Rufus Miles, an author and federal administrator who served as an assistant secretary under three presidents, asserted, "Economy as a ground for major reorganization is a will-o -the- wisp." "It is impossible to prove after the fact, how much, if any, has been saved," he went on to say. "Since it is never possible to know what costs would have been with- out the reorganization, such calcu- lations are close to meaningless." For validation, one need only look at the annual reports issued by inspectors general across the government. Look at the savings claimed, the "funds put to better use," the economies and ef cien- cies, and the allegations of fraud, abuse and waste. If only half of them were real, the federal govern- ment would be showing a budget surplus this year instead of a mas- sive de cit. And beware the law of unin- tended consequences. Several come to mind from the Clinton-era Reinventing Government initia- tive. A report from the National Performance Review at the time estimated that $108 billion would be saved in the nal ve years of the Clinton-Gore term, agencies reinvention activities would realize more than $10 billion in savings, and recommendations from NPR s second phase would yield $69.6 bil- lion in savings for a grand total of $188 billion in ve years. Re-engineering the bureaucracy would also streamline government and reduce the civilian government workforce by 272,900 full-time equivalents. The result? The newly elected Congress, led by then-House Speaker Newt Gingrich, methodi- cally went about "capturing" those claimed dollar and personnel sav- ings --- and devastated acquisition and other administrative areas for years to come. ■ Don't throw me into the savings tar pit Recent projections of cost savings in government are nothing new, but for careful observers, they're always cause for concern As Rufus Miles said, "It is impossible to prove after the fact, how much, if any, has been saved." ALAN P. BALUTIS is senior director and distinguished fellow at Cisco Systems. June 30, 2014 FCW.COM 9
May 30, 2014
June 15, 2014