Navy, Marines lower bar on IT spending reviews

Wednesday - 8/24/2011, 7:06am EDT

Jason Miller, executive editor, Federal News Radio

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By Jason Miller
Executive Editor
Federal News Radio

The Department of the Navy has established review boards in each of the services to approve any technology spending of more than $1 million.

The Navy and the Marine Corps aren't just following the policy.

Instead they are going even further.

The Navy decided to review all technology purchases worth at least $500,000. The Marine Corps " lowered that figure to $150,000 in a July 11 memo. Vice Admiral Kendall Card, the deputy CIO for the Navy, Brig. Gen. Kevin Nally, the Marines' CIO and the deputy Department of the Navy CIO, will lead their respective service's boards.

"There's a lot of IT, particularly in terms of little things, that when you add it all up, someone may buy 15 printers for $250,000, if you do a lot of that, it becomes a big sum of money," said Terry Halvorsen, the Department of the Navy chief information officer, during a briefing with reporters Tuesday at the Pentagon. "I know, in the Navy's case, and I believe the Marine Corps, which had this process in place earlier, the reason they went lower is to get control of, what I'll call, the size buys when everyone is buying things at $250,000 and when you aggregate what all those little buys add up to, it's a lot of money."

The memo, issued July 19, but not posted until Aug. 8, is another piece to how the Department of the Navy will cut technology spending by 25 percent over the next five years, and a good chunk of that savings will come from its business systems.

"If we can't take it out of business IT, then the money will come from somewhere else and I'll like that less," he said. "I don't think we will have to sacrifice anything, but I think we will have to live with different service levels. We may have to change some of the processes that we do things with."

The time is now

With budgets tightening across the government, Halvorsen said the time is right to not only gain better insight into IT spending, but bring it under centralized control.

"It's about transparency in what we are totally spending and making sure someone is approving that," he said. "It's about looking across the board and saying 'Do we really need something new to meet the requirement or could we use something existing to meet the requirement.' And it's to make sure that as we look at our priorities of IT dollars, maybe what you wanted to spend that money on while it's a requirement for that individual command or group, in the big scheme of things, that's a less priority than something else we might want to spend the money on."

The Navy and Marine Corps face some risks in slowing down procurements because of the review boards. But Halvorsen said the benefits outweigh the potential delays.

"We work closely with acquisition, in the department's case, the Assistant Secretary of the Navy for Research, Development and Acquisition, and there will be corresponding guidance out to the contracting and procurement officials that says unless you have a signed authority to buy from one of the two, you can't buy," he said. "They are pretty good at following those rules because they have to be. Now if you are into if you buy it and you didn't have the authority, there are all kinds of bad things that could happen."

Halvorsen said it's more of a culture change than an acquisition change.

The central oversight of IT spending is stronger than ever before. The Department of the Navy's IT budget for 2011 is $7.6 billion, according to the administration's IT Dashboard.

The Navy's push for centralized IT spending comes as the Office of Management and Budget gave all federal CIOs oversight of commodity technology purchases.

Halvorsen said he is looking at three main areas for business systems IT savings:

  • Data center consolidation
  • Buying smarter through enterprise software licenses
  • Application rationalization and modernization

In each of these three areas, Halvorsen is performing analysis to find where the most savings exist.

He said one area that jumps right out is software licensing. The Department of the Navy is negotiating with Microsoft for an enterprisewide software license.

"Buying that better, and leveraging the department's full value to Microsoft is a way we think we can lower costs," Halvorsen said. "There is a series of ones we will go after where we think buying in bulk will save us quite a bit of money."