The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Another Tool to Modernize Federal IT

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact

The federal government spends more than $80 billion annually on information technology (IT), with more than 75 percent of this spending used on operations and maintenance of existing legacy IT systems.  On May 17, 2017, the House of Representatives passed H.R. 2227, the Modernizing Government Technology Act of 2017 (MGT Act). 

Previous efforts by Congress to help federal agencies improve their information technology (IT) systems include the Federal Information Technology Acquisition Reform Act (FITARA), passed in the 2015 National Defense Authorization Act (P.L. 113-291), and the Making Electronic Government Accountable By Yielding Tangible Efficiencies Act of 2016 (MEGABYTE Act) (P.L. 114-210).  

FITARA put agency chief information officers (CIO) in the driver’s seat for all IT acquisition, planning and budgeting; codified the use of PortfolioStat for tracking IT initiatives within federal agencies; provided for data center consolidation; required the development of a strategic sourcing plan for government-wide acquisitions; and, increased use of cloud computing by federal agencies.  The MEGABYTE Act requires each federal agency to create a comprehensive inventory of 80 percent of software license spending, as well as enterprise licenses; track and maintain software licenses to improve the agency’s software life cycle management; analyze software use; provide training to employees on software license management; and, establish goals for agency software license management.  

According to a May 25, 2016 GAO report, 51 federal agencies have IT systems that are so old that in FY 2015, more than 90 percent of their IT expenditures supported operations and maintenance.  Ancient taxpayer-supported legacy systems include two 56-year-old Department of Treasury Master File systems; a 51-year-old Department of Veterans Affairs (VA) system used to track veterans’ benefits; and, a 53-year-old DOD system used to coordinate the operation function of the nuclear forces, which runs on an IBM Series/1 computer and uses 8-inch floppy disks for storage.  Some of the older systems are written in assembly language code, which is difficult to write and maintain, and still operate on an IBM mainframe. 

Antiquated systems at the Department of Justice and the Social Security Administration still use COBOL, a programming language developed in the 1950s and 60s, which is fast becoming obsolete in the business world.  Programmers for both assembly language code and COBOL are becoming increasingly scarce.  The CBO report further noted that spending on operations and maintenance has been on a steady increase over the past seven fiscal years, resulting in a $7.3 billion decline in development, modernization, and enhancement activities over the same period.  

The MGT Act establishes a centralized modernization fund at the Department of Treasury, which is funded through either discretionary appropriations, or by reimbursement by a borrowing agency.  The legislation also creates within 24 federal agencies an IT working capital fund (WCF), which would be funded by the agency either through reprogramming funds designated for legacy IT systems in subsequent appropriations; costs savings achieved through IT modernization projects; or, with discretionary appropriations.  Agencies can only use the WCF for the following purposes:  1) to facilitate the replacement of legacy IT systems, 2) transitioning systems to the cloud, 3) addressing cyberthreats, or, 4) repayment of the centralized fund.  The Congressional Budget Office (CBO) estimates that H.R. 2227 would cost $500 million from 2018 to 2022, if fully funded through appropriations, and does not expect the bill to affect direct spending revenues or add to the budget deficit. 

Modernizing existing IT systems is critical to the enhancement of national cybersecurity, improved constituent services, and enabling better infrastructure.  Potential savings achieved through implementation of FITARA and the MEGABYTE Act should be used to modernize and strengthen federal IT systems.  In addition, federal agencies should be mindful of avoiding duplication and mismanagement of IT services and infrastructure while implementing new and innovative methods of deploying IT across their departments.

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