Obama Aides Review $30 Billion in Technology Contracts
The Obama administration plans to review 26 government information-technology projects worth $30 billion as part of an effort to trim back or cancel contracts that aren’t meeting goals.
Among contracts singled out for scrutiny today were a $1.5 billion project for Lockheed Martin Corp. to update air-traffic control equipment; $281 million to Computer Sciences Corp. to help process patent applications; and $350 million for AT&T Inc. to improve the Treasury Department’s telecommunications.
Before leaving office last month, former White House budget director Peter Orszag ordered a review of the $80 billion the government spends annually on technology to determine whether lax oversight has led to cost overruns, delays and the implementation of obsolete systems.
“We need to end a culture in Washington where we continue to throw good money after bad money,” Vivek Kundra, President Barack Obama’s chief information officer, said on a conference call today with reporters. “If these projects can’t be turned around, if they don’t add value, we will take the appropriate actions. They may be discontinued.”
The projects cited range from $64.5 million awarded by the Commerce Department for an information system to $7.6 billion for an Interior Department system.
IBM, Raytheon
International Business Machines Corp.’s portion of a $4.5 billion cargo-tracking system for the Homeland Security Department was identified for review, as was Raytheon Co.’s $251 million contract for the patent-processing project.
The White House worked with federal agencies to determine which projects should be included on the “high priority” list in an effort to make them more efficient, Kundra said.
He cited a Veterans Affairs Department project that got under way in 1998 at a cost of $250 million, was halted in 2004, restarted in 2005 and stopped again “after spending millions of dollars.”
Kundra wouldn’t say when a decision would be made on projects that may be canceled.
“We appreciate the government’s focus on IT program execution,” Lockheed Martin spokeswoman Emily Simone said in an e-mailed statement. AT&T spokesman Michael Balmoris declined to comment. Computer Sciences Corp. spokeswoman Marian Herbst Kelly, IBM spokesman Clint Roswell, and Raytheon spokesman Jon Kasle said they couldn’t immediately comment.
The initiative is part of a larger effort by Obama to pare the budget deficit, which the White House projects to be a record $1.5 trillion this year, or about 10 percent of the U.S. gross domestic product. Obama already has ordered a three-year freeze in non-defense and national security programs in his budget released Feb. 1 and ordered some agencies to reduce their 2012 budget requests by 5 percent.
To contact the reporters on this story: Kate Andersen Brower in Martha’s Vineyard at 1973 or Kandersen7@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net.