In late December, the Office of Management and Budget (OMB) completed the herculean effort of streamlining a raft of government documents that guide how agencies provide grant money to non-profits, state and local governments, academia, and others.
The goal was to “ease administrative burden” while also finding ways to “reduce risks of waste, fraud, and abuse.” The reforms shifts the federal view of information technology from desktop computing and wires in the closet to shared services in the cloud and large-scale infrastructure projects. In short, the post-reform view fits modern IT business practices.
This has been a long effort for NASCIO and allies, which caught traction when Obama took office in 2009. NASCIO also commented on the proposed guidance back in May.
Perhaps the most striking is the stated preference for shared services in the guidance. Under the General Procurement Standards section (200.18), where it directly states: “To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal government, the non-Federal entity is encouraged to enter into state and local intergovernment agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services.”
Add this to a stated preference for utilizing federal excess and surplus property in lieu of purchasing new equipment immediately following (presumably utilizing excess from other grants, in the case of the state), and this is an invitation for states to “braid” federal funding by sharing common services among various grant programs in the name of efficiency. This may allow federal agencies, savvy governors, and state CIOs to urge reluctant agencies toward modern, shared IT business services.
There are a range of other other examples, but I'll quickly highlight those that should have the most impact for state IT professionals. Below I've highlighted some key changes and their section so those who are interested can play along at home:
Interest (200.449): The revised definitions allow for the financing of computer software being developed or purchased with federal grant funding. This will allow states to better utilize federal grants for large scale software development projects.
Idle Facilities and Capacity (200.446): A nagging issue for state CIOs is attempting to build out data centers for large projects, but only being reimbursed for what is being actually utilized in the early stages of the project. Changes to the guidance ensure data centers (and other information technology and communications projects and facilities) that are in partial use, but are built with expectation of future growth are reimbursable under federal grants. This should help states with large-scale IT projects such as data center consolidation.
The grant guidance tells federal agencies to limit reimbursement for idle space to a “reasonable period of time, ordinarily not to exceed one year.” This one year is a short time for a large scale project such as data center consolidation, OMB stresses that it should be somewhat flexible due to the nature of the language. If nothing else, it should provide some measure of assistance.
Supplies (200.94): The new grant guidance clarifies that personal property such as computing devices and their accessories will be counted as supplies rather than equipment when they fall under the $5,000 threshold. This means more flexibility, less administrative burden, and could ultimately open the door to more BYOD policies.
Internal Controls (200.313): In the “good to know” category, OMB moved guidance requiring non-Federal entities to safeguard sensitive information such as personally identifiable information (PII) from the audit stage to the administrative requirements. It requires the non-federal entity to take “reasonable measures” to secure the information. Perhaps more attention-grabbing is the language also requires the recipient to safeguard “any information that the Federal awarding agency or pass-through entity designates as sensitive.” This puts multiple cooks in the kitchen in making these determinations about what information can be shared and the level of safeguards utilized.
Contingency Provisions (200.433): New language makes it clear that budgeting for contingency funds associated with a federal award for the construction or upgrade of IT systems is “an acceptable and necessary practice.” With CIO’s chargeback rates typically fixed during a fiscal year, this change will allow state CIOs to better fund enterprise and shared IT services such as cloud-based solutions where usage—and thus costs—fluctuate, by accumulating cash reserves.
Time will ultimately decide whether OMB succeeded, but NASCIO believes the reform is a win for state IT, and could allow for significant innovation if federal and state agencies take advantage of the new language in the guidance. Accordingly, implementation of the new guidance is one of NASCIO’s Federal Advocacy Priorities for 2014.
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