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Will deep budget cuts alter federal buying strategies?
Although steep civilian agency cuts are expected in President Donald Trump’s formal budget proposal, federal offi- cials who manage efforts to optimize spending don’t expect a significant impact on their work.
“IT spending probably isn’t going to slow significantly,” one federal official said at the Category Management Con- ference hosted by the General Services Administration and ACT-IAC on March 1. He noted that IT has become akin to other basic utilities the government needs to operate, such as electricity and fuel.
A manager from the Office of Man- agement and Budget agreed. “I can’t see category management going away since it saves agencies money,” he said.
A preliminary budget blueprint unveiled by the White House in late February adds $54 billion to current levels of defense spending, for a pro- jected military budget of $603 billion for fiscal 2018. Civilian agencies would see a $54 billion cut under the plan — “the largest proposed reduction since the early years of the Reagan adminis- tration,” OMB Director Mick Mulvaney said in a Feb. 27 White House press briefing.
In a Feb. 28 speech to a joint session of Congress, Trump touted the benefits of the ongoing federal hiring freeze and promised more savings on contracts as part of his overall policy agenda.
More efficient spending on IT and the other nine categories in OMB’s category management initiative would seem to align with the White House’s goal of smaller civilian agency budgets and increased attention to contracting, according to officials FCW spoke with at the conference.
Smaller budgets could lead to a reli- ance on category management, said Lesley Field, acting administrator of federal procurement policy at OMB. “Given the changes coming at agencies, there’s a natural incentive to find sav-
ings” and encourage more frugal buy- ing, she said in response to a question after her keynote presentation.
Agency officials told FCW they were wary of making predictions about how their IT budgets and acquisitions would fare because it’s early in the process.
Stan Soloway, a former deputy undersecretary of Defense and Pro- fessional Services Council president, told FCW that steep budget cuts at agencies like those that could hit the Environmental Protection Agency, the State Department or the Labor Depart- ment could hinder how agencies buy and manage IT resources now and for years into the future.
With deep cuts, “agencies will stop doing things,” such as buying and plan- ning IT system upgrades, said Soloway, who now leads Celero Strategies. The need to produce immediate reductions would override incentives to take steps that could save agencies money later through more cost-effective and effi- cient services.
“It’s hard to see two to three years
ahead” when faced with a mandate to reduce a budget immediately, Soloway added.
Kristin French, principal deputy assistant secretary of Defense and acting assistant secretary of Defense for logistics and materiel readiness, said she did not expect big changes to category management programs but believed there might be tweaks to the efforts.
Acting GSA Administrator Tim Horne said his agency is focusing on its core mission to provide a contin- uum of IT services and capabilities for federal agencies. With its exten- sive offerings of IT products, services and expertise, GSA will “play a big part in the president’s management agenda,” he said in remarks at the conference.
“We don’t know where we will plug in yet,” said Horne, who served as fed- eral transition coordinator in 2016. He added that GSA is keeping its business capabilities sharpened in anticipation.
— Mark Rockwell
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March 2017 FCW.COM