Projects suffer as budget fight enters Month 5

Agencies are facing the next slope of the budget roller coaster
head on, delaying and preparing to halt systems projects that are strapped for cash
without fiscal 1996 monies.

"If things don't change following the expiration of the current continuing
resolution, we're going to be far enough into the fiscal year that this is going to have
considerable impact," said Gary Gillespie, senior technology adviser to the Interior
Department's IRM director.

Nine Cabinet agencies and several smaller ones are operating under a continuing
resolution that expires March 15. In most cases they have less money than for fiscal 1995.

Interior has kept its information technology programs going while the department hangs
tight and waits, Gillespie said. "But you can only hang on so long before your arms
give out and you have to let go," he said.

Some clues to the future may be forthcoming. With 1996 spending still unsettled,
President Clinton is scheduled to unveil his 1997 budget outline today. But administration
officials said the framework will contain few specifics on IT programs. Office of
Management and Budget officials said the full budget will be issued in March.

Prospects for an IT spending increase in 1997 appear dim, industry analysts said,
predicting that spending will hold steady at around $25.6 billion or perhaps even drop.

"It's a situation where some agencies will win and some will lose. What you can
point to is whether the agency is in trouble," said Robert Deller, GCN columnist and
director of market research for Global Systems & Strategies, a research and consulting
firm in Potomac, Md. "I wouldn't be surprised by a 3 percent drop."

In the meantime, the ramifications of the month-long government shutdown and the
continued lack of full funding are forcing agencies without 1996 appropriations to
re-evaluate some systems projects.

At the Justice Department, "we've got a large number of projects that are delayed,
and it's not just a question of the one month," said Mark A. Boster, deputy assistant
attorney general for IRM. "It's going to be longer then that."

The Veterans Affairs Department is typical of many agencies maintaining
mission-critical operations while keeping a wary eye on the future.

"The budget situation has introduced a certain amount of uncertainty, making it
difficult to plan for future investment," said Nada Harris, deputy assistant
secretary for IRM.

Development of PayVA, the department's new integrated payroll and human resources
system, was delayed by the shutdowns but is back on schedule with funding from fiscal
1995, Harris said. But she said she is concerned about the Decision Support System, an
executive information system scheduled to expand from its current 28 medical centers to 60
in July.

"It is in a deployment stage where it needs increased funding," Harris said.
"Without some additional money, we would have a shortfall that would affect
deployment."

At the Commerce Department, "the one area of concern that remains for me is the
Advanced Weather Interactive Processing System," said chief information officer Alan
Balutis. "There are some additional needs there."

The AWIPS contract with PRC Inc. was renegotiated in August to integrate a new
generation of observation systems at a developmental cost of $127 million--$2 million more
than was delegated for the project. Even if Commerce were operating under its requested
1996 budget, additional money would have to have been found for the National Weather
Service project, Balutis said. He said the continuing resolution will magnify that need.

The Education Department already has put on the back burner a videoconferencing system
that was to be developed this year, and several more programs soon may come under
scrutiny, said Gloria Parker, director of the department's Information Resources Group.

Projects such as the EdCaps financial management system and an Internet access program
are being funded with 1995 dollars, Parker said. "Those that are at the point of
needing '96 dollars will have to be looked at," she added.

The State Department planned to update communications systems, databases and
information systems here and abroad, as well as departmental financial management and
personnel systems. All these upgrades have been put on hold while resources are focused on
maintenance of existing systems, a spokesman said.

"We cannot fund any of our modernization systems," he said. "It puts our
planning that much farther behind. We cannot afford to lose those days."

At the Health and Human Services Department, workers in the Administration for Children
and Families are working through a backlog of 250,000 search requests for the Federal
Parent Locator Service, which tracks down deadbeat parents. There have been no layoffs at
ACF, but the bureau is three to four weeks behind on a much-needed computer upgrade, a
spokesman said.

The National Institute of Standards and Technology has staved off layoffs and furloughs
at its IT Laboratory under the latest continuing resolution, which funds NIST labs at $259
million, up from $240 million in the previous stopgap budget measure.

"The $259 million gives us a bit of padding, and it sure beats another
shutdown," NIST spokesman Michael Newman said. "We're now able to move forward
at a near-normal pace. But we'll still keep close tabs on some things like travel, because
what happens in March is still unclear."

Budget shortages have delayed work on the government's new common security criteria,
slated for issue this year. The security guidelines, being drafted by NIST and the
National Security Agency, are supposed to replace NSA's trusted systems evaluation
handbook, known as the Orange Book.

Many IT offices are keeping systems operational because advances in technology have
reduced overhead and maintenance, said Ed Kernan, director of the Policy and Oversight
Division in the Federal Emergency Management Agency's IT Directorate.

"If it were not for that efficiency, the fiscal restraints we have experienced in
the last two or three years would have had a much greater impact," Kernan said. As it
is, he said, "the biggest victim of the continuing resolution is planning and future
design work that requires new contracts."

In many cases, the budget stalemate has had a more significant impact on government
contractors, who are not paid for the lost time.

"The instability in government budgeting and operations which began on Oct. 1,
1995, has inflicted needless damage on the thousands of service firms which support
literally all aspects of the federal government's multiple missions," said Harris
Miller, president of the Information Technology Association of America.

Boster said Justice lost two contract employees with key technical skills and
experience. "Now they've gone off [to other jobs] and we've lost them," he said.

Jerry Slaymaker Jr., acting director of the Environmental Protection Agency's
Enterprise Technology Services Division, said it is hard for contractors to hang onto
good, technically savvy employees. "These are individuals who are generally very
marketable," he said.

Industry officials warned that the continued budget rancor might have a significant
long-term impact if some companies decide the government market isn't worth the hassle.

"Are you going to get the best companies? You don't want this to be a boutique
business," said Bob Cohen, an ITAA vice president. Staff writers Christopher
Dorobek, William Jackson and Kevin Power contributed to this story.