Public Sector Innovation Roundup: Sequestration & IT Acquisition Reform

House Oversight and Government Reform Committee Pushes IT Acquisition Reform: The big news this week was the hearing held in the House Oversight and Government Reform Committee on Chairman Issa’s IT acquisition reform legislation, known as FITARA. The bill, which was released in draft form to the public last fall, seeks to empower CIOs, improve the overall speed and agility of the acquisition process, and reduce wasteful IT spending, is expected to be formally introduced before Congress goes home for its Spring Recess in about three weeks. Chairman Issa acknowledged that his committee has received comments from more than 20 organizations on the specifics of the bill and that his staff is working to amend the bill to address many of the concerns industry has raised. The hearing itself focused a good deal of attention on the need for a better trained and equipped acquisition workforce, another area addressed in the bill, as well as the need to shift attention away from IT as a capital expense and toward IT as an operating expense. We will continue to track the development of this bill closely and look forward to the next iteration. The hearing received a good deal of press attention, including this summary from FCW.

Sequestration’s Impact on Federal IT: With sequestration now just hours away, Jason Miller from Federal News Radio interviewed Federal CIO Steven VanRoekel on the potential impact of sequestration on federal IT. The long and short of it is that we know federal IT will be impacted, but unlike the programs themselves where they are expected to take an across the board cut, IT by its nature is woven into the fabric of these programs, not a program itself, so its impact is uncertain. This according to the interview is creating a confidence problem for IT. New investments will also be put on hold. Read the article and listen to the interview from Federal News Radio here.

Sequestration’s Impact Going Forward: In addition to the automatic cuts associated with the sequester that occur March 1st at 11:59pm, there is another looming funding crisis in the federal government – the expiring Continuing Resolution for FY 2013. The CR officially expires on March 27th so Congressional leaders will have to find a way to address this situation as well. Word from Capitol Hill this week is that the House Appropriations Committee is preparing a rest of the year Continuing Resolution at post-sequester levels, meaning much of the spending included in this bill would be rolled back to pre-2008 levels, the last year of the George W. Bush Administration. GovExec has more.


Michael Hettinger is VP for the Public Sector Innovation Group (PSIG) at SIIA. Follow his PSIG tweets at @SIIAPSIG. Sign up for the Public Sector Innovation Roundup email newsletter  for weekly updates.

Sequestration and Ed Tech

The looming federal sequestration threatens ever deeper cuts to local education budgets, and potentially to investments in technology and instructional materials.  A recent survey report put out by the American Association of School Administrators gives a glimpse into what various districts and administrators are planning to do if Sequestration cut backs happen. Sequestration is the term for the automatic, across-the-board cuts included in the 2011 Budget Control Act (BCA), which raised the federal debt ceiling and put in place annual budget caps. Sequestration was designed as a consequence, should the Super Committee created by the BCA fail to reach its goal of identifying other means to meet the caps. It did fail, and so the cuts will become a reality in January 2013 unless alternative legislation is enacted. If implemented in 2013, the first-year share of the sequestration ($1.2 trillion over ten years) would translate into roughly 8-9% cuts across the board, including approximately $4 billion in education alone.

According to the AASA report, 52% of all districts surveyed said that they would cut back on technology purchases if the sequestration goes into effect, while 38% would defer textbook purchases and 25% reduce course offerings. The highest cuts would be in personnel and pay for teachers, expectedly since they make up such a large segment of districts budgets.

When specifically looking at the option of deferring technology purchases, there was not much variation by district demographics such as socioeconomic status, community type (rural/urban/suburban), or student enrollment.  However, districts with a high number (70%+) of students in poverty (as measured by the free and reduced lunch program) responded more frequently that they would defer technology spending, with 64% in this category saying they would versus the 52% average across all districts. With 52% of all districts planning to defer technology purchases, the impact of Sequestration on education technology would be very noticeable. Especially since they come on top of previous zero funding of the NCLB II-D Enhancing Education Through Technology (EETT) grant program. Managing expectations and making a clear case for the cost savings potential of technology investments will be key for the sector if the Sequester continues. This provides both a challenge and opportunity in the upcoming budget climate.

Meanwhile, while a decision on sequestration could be made by Congress and the President in the coming weeks, more likely is that we will have to wait until after the election or even until the new Congress takes office in January around the time the cuts would go into effect.  One bright spot for education is that Deputy Secretary Miller announced that the sequestration cuts would not impact most education programs until the 2013-2014 school budget year beginning July 1, 2013.

 


Lindsay HarmanLindsay Harman is Market and Policy Analyst for the SIIA Education Division.